Goldman has been in the hot seat and “vilified” for a while now, so they’re stepping up in the latest Bloomberg cover story and saying, “Don’t Blame Us.”Their argument is basically, “Sorry for being perfect.”
Case in point: this statement coming from Goldman (via BusinessWeek reporter Roben Farzad):
In the end, Goldman asserts, the secret to its success was not that it was smarter than AIG… Goldman’s advantage, it says, was that it did the dull, unglamorous work of repricing its securities at true market value, a Goldman hallmark since its days as a tight-knit partnership, when screwups came right out of partners’ capital.
This huge article might be the best PR move ever because listening to Goldman continually not defend itself is now officially annoying.
They never say anything new yet they keep talking.
It makes us wish people would stop giving them a platform to tell us how amazing they are.
Here are some other things we want to stop hearing:
- “You can’t be so arrogant as to accept one view over another, or to abandon your market-making role when clients expect you to make markets every day.” – Viniar
- “If the firm had acted more like some James Bond villain conspiring to plunder Main Street…it could surely have made a ton of money shorting the doomed mortgage market” – Goldman executives
- Goldman’s sophisticated CDO customers had access to expert advice and research. – upcoming (April 7th) Goldman letter explaining everything again
There are still issues we wish Goldman would address head on.
Instead, we get more of the same. Like this weak justification for Goldman’s “black box” trading, trading both clients’ money and their own money on the same platform:
Market makers often have to step in with their own capital to execute a trade for a client who demands one. Market-making has its attendant risks, but these are cushioned by fees on the trade flows in both directions. Although market-makers don’t necessarily make a directional bet on the market, they do often lean one way or the other.
[Taking a short position on securities it sold to clients] wasn’t standard practice, that Goldman didn’t tell clients to do one thing while it did the opposite.
Pretty much every big bank is now involved in “black box,” proprietary trading – trading client money and their own money from the same platform. It’s legal as long as there is a “Chinese wall” in place. Barclays’ Chinese wall is physical distance. The bank keeps its prop traders in Philly and its client traders in New York. Goldman’s seems nonexistent.
Their CDO prop trading desks and their CDO client trading desks are right next to each other on the trading floor.
They also share the same Managing Director, Jerry Ouderkirk.
Right now Goldman has the public awaiting eagerly explanations for their black box trading, shorting Greece, killing AIG, etc and instead of giving us one, they keep us waiting. They’re using their notoriety and our attention to hammer home their message: sorry haters, we’re the best.
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