Hedgeye founder Keith McCullough goes off on Goldman Sachs and the next move for its embattled CEO.
Blankfein must appease both sides of the jury if he has any hope of surviving in the age of Wall Street reform and the Obama administration. Keith writes:
Today, Lloyd Blankfein is going to get run-over by the populist madness of crowds. He’s already released his proactively predictable defence. He’s once again proclaimed his mystery of faith that he is smarter than you and Goldman “managed our risk as shareholders and regulators would expect.”
That’s actually a very appropriate summary of what Goldman did. They did exactly what the likes of Grantham and I would expect. They bought the 2006-2007 leverage top, saw in-house funds like “Goldman Alpha” get annihilated by “6 standard deviation events”, then asked their friends to bail them out as they “hedged” the final stage of the selloff, ultimately perpetuating a bottom.
The point here is to hold certain actors of the new era of Goldman leadership accountable. Blankfein was a corporate tax lawyer and then a precious metals salesman, not God. He’s made his way to the top the good old fashioned American way. Now he’s looking over the precipice of history’s lessons. Real leaders take the fall.
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