Sign in
Become a MarketWatch member today
Outside the Box
May 1, 2010, 12:01 a.m. EDT · Recommend (2) · Post:
View all Outside the Box "º
"¹ Previous Column
This time it's different for ratings agencies
First Take "º
Liability blowout rattles BP
By Howard Gold
NEW YORK (MarketWatch) -- Watching Goldman Sachs Group Inc. officials testify before a Senate subcommittee, I couldn't help thinking of George Orwell.
He, of course, was the great English writer of "Animal Farm" and "1984," which we all read in school.
Orwell understood better than anyone the pernicious language of euphemism. You might remember the phrases "doublethink," "war is peace; freedom is slavery," and "Big Brother is watching you," which chillingly captured the obfuscations of totalitarian regimes in the early days of the Cold War.
But a less-well-known essay of his, "Politics and the English Language," kept running through my mind as I watched witnesses go before the cameras Tuesday. It was striking how few of the present and former traders and executives grilled by senators for more than ten hours could give direct answers to simple questions.
Reuters Fabrice Tourre testifies
"The great enemy of clear language is insincerity," Orwell wrote in that essay. "When there is a gap between one's real and one's declared aims, one turns as it were instinctively to long words and exhausted idioms, like a cuttlefish spurting out ink."
And there were buckets and buckets of black ink spurted out in the hearing room Tuesday as the Senate Permanent Subcommittee on Investigations interviewed Goldman /quotes/comstock/13*!gs/quotes/nls/gs (GS 145.20, -15.04, -9.39%) Chief Executive Lloyd Blankfein; Chief Financial Officer David Viniar, and several present and former denizens of Goldman's mortgage desk, ground zero of the controversy that has shaken the firm to its roots.
At times it seemed like inquisitors and witnesses lived on two planets, speaking two different tongues.
The Goldman executives spoke the rarefied language of Wall Street as they tried unsuccessfully to explain their business model to an audience that must have been scratching their heads when they weren't reaching for their remotes. They clung to a thin reed of a defense, that they were above-it-all "market makers" whose only responsibility was to give clients the best price on any deal.
The self-righteous senators tried to cloak themselves in the language of Main Street, using down-to-earth idioms and even salty language -- quoted from internal Goldman emails -- that would have gotten Howard Stern thrown off the air a few years ago.
U.K. general elections, Greek rescue package and banks earnings ahead.
The whole exercise proved how removed Goldman and Wall Street are from the most basic standards by which the rest of us to do business, and how unaware they seemed to be of it. Except occasionally for Blankfein and Viniar, Goldman's witnesses couldn't say whether what they were doing was right or wrong, or whether they were obliged to tell the truth to clients about deals they were selling them.
That became very clear from early in the hearings, when four present or former mortgage traders and salesmen gave their testimony.
These were the people in the trenches who actually did the deals. They included Daniel Sparks, who headed up the mortgage desk for nearly two years before resigning in 2008; former trader Joshua Birnbaum; managing director Michael Swenson, and of course Fabrice "Fabulous Fab" Tourre, whom the Securities and Exchange Commission named as a defendant along with Goldman in the civil case it filed a couple of weeks ago.
Both Goldman and Tourre have repeatedly denied wrongdoing and have vowed to fight the SEC's charges in court.
All four young men were lawyered up to their ears and rarely departed from their scripts. At times some appeared to have utter contempt for the proceeding and the elected officials who ran it. In this hearing room, at least, they seemed possessed of an icy brilliance, lacking the testosterone-fueled animal spirits that prompted Tom Wolfe's Masters of the Universe to go "braying for money" in the bond pits. But that was 20 years ago.
Speculation abounds on who will get stuck with oil-spill bill
3:25 p.m. April 30, 2010 | Comments: 32
- decsatsv | 11:12 p.m. April 30, 2010
"With Palm on deck, is H-P killing its Windows-based tablet? http://bit.ly/d3y831" 5:01 p.m. EDT, April 30, 2010 from MarketWatch
"FDIC shuts down three Puerto Rico banks, holding almost $15 billion in total deposits http://on.mktw.net/dA25Ot" 4:10 p.m. EDT, April 30, 2010 from MarketWatch
"U.S. stock benchmarks end April in black; 2.6% Nasdaq rise leads pack http://on.mktw.net/dvFSgV" 3:30 p.m. EDT, April 30, 2010 from MarketWatch
"United-Continental deal is smooth flying for analysts http://bit.ly/c3TOBu" 3:29 p.m. EDT, April 30, 2010 from MarketWatch
"Friday sell-off caps worst week since January for U.S. stocks http://on.mktw.net/9S6gau" 3:08 p.m. EDT, April 30, 2010 from MarketWatch
Digital Dvorak
The back story of the great Apple-Adobe rift
On the Markets
Sentiment nears dangerous levels
Political Capital
Employment matters more than deficits
Tech Tales
H-P buying Palm made most sense all along
Wall Street Irregulars
Paranoid bear has met enemy, still bearish
Read Full Article »