Go to PDF Version | Go to Recent Issues
To save time in the future, you may select one of the preferences below. You may update your eIBD preferences at any time by going into My IBD and selecting Update Your eIBD Preferences.
Set Web-Based Version as Default Set PDF Version as Default Set Recent Issues as Default
Get QuoteSearch Site
Daily Graphs Online
Public anger at Goldman Sachs is the vehicle being used to force through sweeping financial reform legislation.
In the public's mind, Goldman has come to symbolize the self-interested corruption at the heart of modern finance. The legal discussion about Goldman seems to center on whether Goldman had a conflict of interest. Goldman doesn't have a conflict of interest; Goldman is a conflict of interest.
The company is not unique among major financial institutions. It is in the spotlight because it is widely respected as the most intelligent and influential financial market player. Goldman creates markets, moves markets, shorts markets and participates heavily in the regulation of these markets through an influential network of past, future and wannabe employees.
The basic facts of Hank Paulson's transition from chairman and CEO of Goldman Sachs to U.S. secretary of the Treasury are mind-boggling.
He ran Goldman during the build-up of the bubble, earning $38.5 million in 2005. In 2006, he went to Treasury as the bubble was peaking. He was "forced" to redeem his ownership in Goldman before becoming Treasury secretary. He therefore sold his stock for $485 million on a tax-free basis saving more than $100 million in taxes because he was entering "public service."
We will be assessing Paulson's actions for many years, but it is very clear that he was presiding over the resolution of the financial crisis his firm played a pivotal role in creating. There is nothing illegal about any of this, but there is a lot wrong with it.
The regulatory reform bill passed by Congress is almost 2,000 pages. I have not read it. Neither have most — if not all — of the congressman who voted for it. I don't have to read it to know the foundational premise is fatally flawed. I also haven't read the bill because legislation that long isn't written to illuminate, simplify and solve problems.
In this environment, what passes for a public debate is a bunch of talking points spouted by people who don't know finance and haven't read the bill. The public fury over Goldman was the vehicle used to ram through this financial reform bill of flawed intent.
The premise of the bill was that systemic risk must be managed by more and tougher regulators. The systemic risk of the "Too Big to Fail" institutions is not a naturally-occurring market phenomenon. It is the unintended consequence of the conflicting goals of federal financial policy.
We've had the Summer of Love and the Summer of the Shark. Now are you ready for the Summer of Corruption? On Thursday, jury selection begins in the federal trial of disgraced former Democratic Gov. Rod Blagojevich of Illinois. The timing couldn't be worse for Blago's old Chicago pals in the White ...
One of the chief characteristics of Barack Obama's speechifying is its contempt for words as anything other than props of self-puffery. Consider, for example, his recent remarks to the graduating class of the United States Military Academy: "America has not succeeded by stepping out of the currents ...
In the midst of massive spending and the largest expansion of the federal government in decades, President Obama has created a Debt Commission to get our nation's fiscal house back in order. The irony of the president's action is noteworthy, but he does have good reason for concern. The fiscal year ...
Has Sarah Palin learned anything since she was plucked from obscurity almost two years ago? Not that I can tell. It was not Palin's fault that she was woefully unprepared to be the Republican vice presidential nominee. For that one, blame the petulant, impetuous John McCain. But Palin has had ...
Mexico's President Felipe Calderon's false claims about "racial profiling" in Arizona's new immigration law received much attention last week, but unfortunately that wasn't the only thing he got wrong. More than four minutes of his address to Congress on Thursday was spent lecturing Americans to ...
To participate in Community areas, please Sign In or Register
Register
Learn to spot faulty bases.
Get QuoteSearch Site
Read Full Article »
