A bold statement from Lloyd Bankfein:
This is Lloyd on Sunday in New York. Following my message to you on Friday, I wanted to update all of you and let you know that we have been taking all appropriate steps to defend the firm and its reputation. As we prepare for the opening of markets around the world, I want to remind all of you of the fundamental values that have served Goldman Sachs throughout our history: teamwork, excellence, and service to our clients. The extensive media coverage on the SEC’s complaint is certainly uncomfortable, but given the anger directed at financial services, not completely surprising. Still, it is important to put the SEC’s action in context. The core of the SEC’s case is the allegation that one employee misled two professional investors by failing to disclose the role of another market participant in a transaction. Importantly, we had assumed risk in the deal and we lost money, just like the other two long investors. I will repeat what you have heard me say many times in the past: Goldman Sachs has never condoned and would never condone inappropriate activity by any of our people.
So the three-pronged defense from Goldman is:
1.) We didn’t do anything wrong
2.) If we did do anything wrong, it was just a few bad apples
3.) We’re against wrong, as I’ve said lots of times!
Good luck with that, Lloyd!
mr. whipple
Banksters!
El Cid
We deeply apologize if any inconvenience our actions were interpreted as having caused you in any way reflected badly upon our image or otherwise made our activities more difficult to pursue.
mr. whipple
This is what they should have said Friday.
kommrade reproductive vigor
At least they’re not blaming ACORN.
Yet.
Mr. Poppinfresh
John, you forgot:
4) Even if we did rob this bank and steal millions, we totally had $57.60 in an e-savings account at that branch, and so we were a victim too!
Face
Pretty sure the key hedge here is “people”. These fucking monsters aren’t people, by any common definition.
licensed to kill time
I like the bit about “since we lost money, too” , it’s all good. See, we even duped ourselves! D’oh!
geg6
As happy as I am to see GS taking some heat, the real criminals are still seen as oracles:
thenation.com/doc/20100503/hayes
I am rapidly coming to the conclusion that Chris Hayes is a national treasure and should be cloned so that he can take his reportorial skills to every medium he can.
EconWatcher
Actually, I think this message shows an interesting shift from the original Friday response: The firm is noticeably distancing itself from the “one employee,” whereas Friday was a full-throated denial.
Balconesfault
If they really lost money on the deal, I’m expecting that those involved got shit-canned … or at least had their bonuses cut that year.
Call me jaded … I’m betting that when the dust clears, including all related transactions and fees, there was not a net Goldman loss.
Midnight Marauder
I like this.
Eric U.
I think they read the article by Sam Antar about how they were screwing themselves. I found it amusing that he thinks the SEC does this on purpose for what amount to personal reasons. It’s probably more complex than that, but I’m guessing the thought of people at Goldman stewing all weekend didn’t hurt anyone’s feelings at the SEC
MattF
Well, of all things… the magic of the marketplace is apparently having some effect. However, it’s still unclear to me how anyone in their right mind could ever trust Goldman Sachs in a deal. But we shall see… I suspect, in any event, that the Fabulous Frenchman, M. Fabrice Tourre, is feeling a little pressure at this very moment.
Fleas correct the era
Oh, yes indeed. By at least five dollars. And you know that’s gonna leave a mark! How they must have suffered…
Rommie
I am shocked, shocked, that you think we condone gambling on the premises!
Violet
This is like saying, “We’re against bad things.” In the real world where the rest of us live, this means nothing.
“Inappropriate activity?” Is this what we’re calling lying, cheating, and stealing these days?
Osprey
They should lather up Mr. Blankfein in the spiciest buffalo wing sauce they can find, then submerge him in a tank full of bullet ants.
Yes, ants en.wikipedia.org/wiki/Paraponera
Fleas correct the era
“Inappropriate activity?” Is this what we’re calling lying, cheating, and stealing these days?
Getting caught.
DanF
4) We want all Americans to know that we are also against the violent rape and murder of puppies.
Calouste
Just reading between the lines of Mr. Bankfine:
Honesty and integrity are apparently not fundamental values at GS.
I guess that depends on what Mr. Bankfine means with “inappropriate”. Giving a sucker an even brake would pretty much be frowned upon at GS.
rootless-e
I finally figured out why I can’t share the Goldman indignation. I feel like I’m being asked to get angry at Omar Little for stealing from crack dealers. Of course, Omar had a moral code, so that’s different, but …
flukebucket
Okay. It is driving me crazy. There was a woman who tried to warn everybody back during the Clinton administration that there needed to be more government regulation in the trading of derivatives.
Seems like her name was Britlee Bourne or something like that.
Anybody remember?
We will soon hear more than we ever cared to hear about the Lynndie England of Goldman Sachs.
geg6
OT, but John, if you’re still in a bad mood and need a giggle, read this about how Miley Cyrus is a Saul Alinsky mole, conspiring against the good conservatives who created and still run country music:
yglesias.thinkprogress.org/archives/2010/04/is-miley-cyrus-an-alinskyite-mole-sent-to-brainwash-coun…
Best laugh in weeks.
kay
@EconWatcher:
I agree. I think it’s a good sign, if you’re the SEC.
DanF
And no skull-fucking. I know that’s going to make some of our investors wince, but morally, Goldman Sachs will not tolerate skull-fucking in the office. Our board has thought long and hard about skull-fucking, and through much soul searching, we believe this is correct position for our company in these troubled times.
Cat Lady
@EconWatcher:
It’s good news for the SEC. The Fabulous Fab is a young guy who doesn’t want to spend the rest of his life poor and/or in jail. He’s not going down alone. Popcorn!
EdTheRed
Jesus H…are these guys just completely incapable of releasing a public statement that doesn’t open them up to even more civil liability?
Cat Lady
@flukebucket:
Brooksley Born. It’s always the women who try to save us from ourselves.
JGabriel
Lloyd Blankfein:
Interesting. How much did they make in fees off of the clients? Including Paulson?
.
R. Porrofatto
I don’t work on Wall St but I’ve worked with many WS businesses and mid-level guys. As people they are no different than anyone else – some decent, some complete assholes. What differentiates them from the rest of us, though, are the torrents of money they swim in, and the arrogant self-worth imbued in them by so much easy money to be had. Ordinary Americans have very little idea of just how much of their own work they’ve had to sacrifice to give these parasites incomes and net worth that is hundreds of times larger than the the average worker* – if we can even use “work” in this context. They are literally laughing all the way to the bank and it’s a very short ride.
Considering the billions these people accumulated legally (after getting Congress to declare it legal of course) makes it all the more stunning just how unnecessary committing fraud was. Like their organized crime counterparts, it was so easy they simply couldn’t help themselves
*Think a half million dollars per year would be a handsome income which would take care of every need and want of your family, with a nice estate for your granchildren and then some? Well, if you made $500,000 every single year since the birth of Christ – 2000 years – you’d have made one billion dollars. John Paulson, at the core of the fraud du jour, made four billion in one year, 2007. And so did David Tepper in 2009, one of the worst years since the Great Depression for the rest of us.
JGabriel
@Calouste:
Goddamnit! Not only are they scamming our banks, now they’re sabotaging our automotive vehicles! Those bastards!
.
flukebucket
@Cat Lady:
Thank you so much. That was driving me nuts. I was googling it every way I knew possible and I couldn’t come up with it.
I watched an NPR special on Brooklsey Born once with my wife and from time to time my wife would give me that “men are such dumb asses” look.
At the time I had to agree with her.
jl
Is having the company’s CEO in private meetings to get special gummint treatment in the middle of a financial panic ‘inappropriate’?
Or just recognition of the company’s special status and role in gaining control of fianncial assets by any means necessary, er, sorry, I mean just recognition the companies vital public service role in the financial markets of the nation?
Tsulagi
Think I’ve heard that before.
Why not? Not long ago worked well for some other guys.
But Goldman needs to update with the times. After the three three-step program above, they need to follow with…
1. Must look forward, not backward.
2. Full plate.
3. Pick your serial battles, but not this one as you wouldn’t be able to get anything else done.
4. Plus also too.
Violet
@Cat Lady:
Oh, wow, that’s a great article. Can someone just put Brooksley Born and Elizabeth Warren in charge of our economy. Everyone will benefit.
Professor
Fellows, what has happened to Phil Gramm and his wife? We used to say ‘where are they now’? Did they have any part to play in this debacle?
Mike Kay
This sounds like Otter’s “Don’t Bad Mouth the USA” Defense from “Animal House”
youtube.com/watch?v=KLHFdduVDVg&feature=related
SomeoneWhoOncePostedUnderaDifferentName
Don’t fight it. Just buy Goldman stock everytime it drops over the next few months.
When it goes up (probably after the case is dismissed, settled for pennies, or is overturned by the COA or SC), take your winnings and blow it on a two week binge in the Carribean. It’s the only way you can pull a sliver of joy out of what has happened to this country.
ajr22
@rootless-e: This analogy only works if Goldman was only stealing from other banks and hedge funds that were also crooks. When they are screwing over pension funds and the U.S taxpayer they stray out of Omar territory. He said ” I aint never pull my gun on no taxpayer” that’s part of the game ” You just get up close and hit the right *Bleep*” Goldman hit a few million taxpayers.
Cat Lady
@Violet:
Include Sheila Bair, Meredith Whitney and Sharron Watkins, give them a budget and subpeona power, and stand back. Shock and awe baby, shock and awe.
SomeoneWhoOncePostedUnderaDifferentName
@kay:
No way. It’s not like GS just found out about the lawsuit on Friday. They’ve had weeks (if not months) to prepare for this. They’re not changing strategies because they gave it some thought over the weekend.
rootless-e
@ajr22: in this case, Goldman was stealing from ACA/RoyalBankofScotland, ABN/AMRO and IKB.
i just can’t get worked up about it.
It’s a weak analogy, I admit. But I can’t find it in my heart to be mad that ABN/AMRO made a naive and costly trade on the advice of GS.
Legalize
I think analyzing what makes the various “conservative” groups different misses the point. The point is, what makes them all the same: They’re lying sacks of shit who care only about themselves and people just like them, and who would gladly push every one of us in front of a moving bus if it mean the remote possibility of saving their Blackberry.
kommrade reproductive vigor
And it’s AIDS, not Aids. Also. Too.
kay
@SomeoneWhoOncePostedUnderaDifferentName:
I don’t know. I see your point, but I disagree. What does “condone” mean, ordinarily?
“It happened, but I had nothing to do with it”. It doesn’t even mean he wasn’t aware of it. It just means he’s not a big fan.
Look, I don’t know what’s going to happen, but it occurs to me that this notion that GS are “untouchable” comes from the same place that says GS are “brilliant”.
I just don’t know about either of those assumptions.
Everyone said all the same shit about ENRON, as I recall.
We’ll see.
Upper West
Sorry, Lloyd — GS is out of luck:
kay
@SomeoneWhoOncePostedUnderaDifferentName:
Too, they now have to pretend they didn’t know, because they didn’t warn investors. So they release a statement Friday that is a bald denial, and then they release a statement Monday that seems to indicate new information. “We didn’t know Friday: just look at our statement”.
He begins with announcing he’s writing Sunday. That’s sort of interesting.
gex
@ajr22: Agreed. The Omar Littles in this story were the guys who shorted the big 5. And they even differ from Omar in that many of them tried to get the SEC to take action.
I guess the immorality of these sociopaths does not rankle some.
gex
@rootless-e: A lot of those banks got their money from innocent people too. And a lot of them got bailouts from their country, the EU, the US or some combination of the three. That’s not even counting the untold billions flowing to them all because of the AIG bailout.
What, do you think they just pony up their own money and swap it around? They basically are defrauding everyone who participates in the global economy. And you say “meh.” Interesting.
rootless-e
@gex:
I just don’t want to excuse the bankers. Look at IBK. Their charter was to make loans for industrial development in Germany. So dipshit Basel 2 regulators declared that roulette bets that the ratings agencies declared to be AAA could be treated as regulatory capital. And the high paid management at IBK took a pile of money and instead of lending it to people who want to make refrigerators or windmills, they signed onto a scam that would have embarrassed the folks who call old people and try to trick them into revealing their credit card numbers. And then, people who sweep streets and empty bedbans in Germany had their taxes used to bail out these morons.
Alex S.
The SEC vote on the Goldman Sachs fraud charge was split along partisan lines. The Republicans voted against it:
huffingtonpost.com/2010/04/19/goldman-sachs-vs-sec-all_n_542736.html
Of course, this won’t stop them from accusing the Obama administration of being in the pockets of Goldman Sachs, and it won’t stop them from acting like populists.
rootless-e
@gex: Omar was not helping build a richer and more community oriented Baltimore either. The entire industry is based on fraud. I am suspicious of what I see as an effort to claim it’s just a few bad apples.
flukebucket
@Professor:
Good ‘ol Phil was referenced just this morning in a Harpers Magazine blurb I read.
He is probably somewhere enjoying a fundamentally sound economy.
jl
Forget this Goldman Sachs trivia.
This here is really important.
Breitbart’s operation says Miley Cyrus is a liberal mole.
Is Miley Cyrus an Alinskyite Mole Sent to Brainwash Country Music Fans
yglesias.thinkprogress.org/archives/2010/04/is-miley-cyrus-an-alinskyite-mole-sent-to-brainwash-coun…
And what about Taylor Swift? Was in movie with Miley Cyrus, guest hosted SNL, and now in a movie with known liberal starlet eggheads Julia Roberts and Jessica Alba.
The true real Americans are under seige and infiltrated by sinister fifth columns of talented hotties. Bwa-ha-ha-ha!
The evil plot continues.
rootless-e
@gex:
I just don’t want to excuse the bankers. Look at IBK. Their charter was to make loans for industrial development in Germany. So Basel 2 regulators declared that roulette bets that the ratings agencies declared to be AAA could be treated as regulatory capital. And the high paid management at IBK took a pile of money and instead of lending it to people who want to make refrigerators or windmills, they signed onto a scam that would have embarrassed the folks who call old people and try to trick them into revealing their credit card numbers. And then, people who sweep streets and empty bedbans in Germany had their taxes used to bail IBK out.
Linda Featheringill
That guy – Blankfein – he just can’t shut up, can he?
If he really has to make a public announcement every 48 hours or so, and continues to do so, he might wind up talking himself into jail.
This whole drama might be more action-packed than I anticipated.
rootless-e
my comment is awaiting moderation.
jl
@rootless-e: check for boner pill names embedded in the words.
S o s h u l i s t, for example.
Or maybe it pissed off Tunch, in which case there is no hope.
rootless-e
I just don’t want to excuse the bankers. Look at IBK. Their charter was to make loans for industrial development in Germany. So Basel 2 regulators declared that any tricks that the ratings agencies declared to be AAA could be treated as regulatory capital. And the high paid management at IBK took a pile of money and instead of lending it to people who want to make refrigerators or windmills, they signed onto a scam that would have embarrassed the folks who call old people and try to steal their savings. And then, people who sweep streets and empty bedbans in Germany had their taxes used to bail IBK out.
took out the reference to a kind of ga mb oling
Jon H
John,
May I humbly request that any mention of Blankfein in a post be accompanied by a picture of Verne Troyer (Mini-Me). The resemblance is remarkable.
I would particularly suggest a picture of Troyer, drunk and naked, from Surreal Life.
Mike Kay
@jl:
Breitbart is seriously sick.
I was flipping channels the night before the inauguration, and o’reilly had breitbart on and he was calling Tom Hanks a commie for appearing at Inauguration concert held the day before.
kay
The big banks and investment houses should have asked a the peons what people were doing with debt, before they decided no one would ever default on a mortgage.
They weren’t making the mortgage first, because they needed to make the car payment to get to work, and the foreclosure process is lengthy, and the repo process is not.
Just common sense, if you’re drowning.
ksmiami
Hoocoodanode??? Obligatory reference to Calculated Risk… Basically, Goldman adds little or no value to society – it literally makes money by allocating risk pools and then heaping fees on top. No actual product, or wealth, or societal good ever gets produced.
kay
@ksmiami:
Well, I think it’s safe to say they buy a lot of things, so there’s that.
One of the gentleman menioned in the complaint purchased a home for 41 million dollars in 2008, for example.
Bnut
@jl:
We have sent our most vapid and commercial of products (the jail bait singer) undercover to make conservatives that much stupider. I give it a year before they all die of brain softening from listening to her “country”.
J. Michael Neal
Count me in with rootless. As I’ve expressed here several times over the last few days, the idea that the parties on the other sides of these trades were innocent dupes is laughable. That includes the ones at the pension funds. The people who had money in those funds, they are legitimate victims. I have ZERO sympathy for the people who ran them into the ground, and the anger of pension holders should be directed first at the clowns who ran them.
All that said, my lack of sympathy for the counterparties should not be read as thinking that the case is inappropriate. I’m all for gunning down Goldman execs in the streets and making the rest of the employees clean up the mess with toothbrushes. However, that’s on general principles, and the fraud case is merely a tool to accomplish a good end.
rootless-e
@J. Michael Neal: Felix Salmon is trying to make the case that investments in synthetic CDOs was not speculation because historical data showed that a diversified portfolio of rmbs would be safe.
Jesus.
Past performance is not a guarantee of future returns.
Mnemosyne
@kay:
It’s even better than that. Remember that credit card bankruptcy bill that the banksters pushed through that made it much more difficult for people to default on their credit cards? Once it became easier to default on a mortgage than on your credit card, people kept up their credit card payments and stopped paying the mortgage.
So now, instead of losing $30,000 in credit card debt, banks are losing $300,000 (and more) from those very same people when they put their keys in the mail and walk away from their house. That’s what you get for only looking at the next quarter’s profits and not the long-term effects of a policy that you basically wrote yourself.
J. Michael Neal
Also, I’m not sure people here really appreciate Goldman’s place on the Street. People don’t deal with them because they want to. They deal with them because all roads lead to
RomeGoldman Sachs. No one in their right mind actually trusts them, though that leaves plenty of people who might. For certain kinds of deals, though, you really don’t have any choice but to go with them.I do disagree with R. Porrofatto’s assertion that the people there don’t really work. Actually, they work like dogs. Insane hours. Ridiculous schedules. Vacations canceled on a moment’s notice. Ignoring an illness until it becomes impossible to work and then needing major surgery is frighteningly common.
Really, the amount that they work is a large part of the problem. It completely shapes their worldview. For most of them, the money is the *only* reward for their job. Most of them don’t like it, and they realize that their in a never ending rat race. They don’t have a life outside the job. Because they’re so harassed for time, they become completely dependent upon the perks money can buy to make things a little easier.
Perhaps the single most effective regulation we could put on the financial industry is to mandate 40 hour weeks, and no more.
Mnemosyne
@J. Michael Neal:
Big city police departments call some homicide cases “NHI” — No Humans Involved. It’s generally drug dealers killing one another.
This is the financial version of that.
SomeoneWhoOncePostedUnderaDifferentName
@kay:
I’m not a fan of GS by any means.
But GS is the Death Star and while there may be a lot of Luke Skywalkers out there, they bought up and destroyed all the X-Wings. All we can do it stand around and kick dust at the two moons orbiting our crappy planet.
debbie
Blankfein has clearly been coached by the Catholic Church.
jl
Given the backpedal linked to above, I propose
Days of whine and poses
for the winemaker’s little tantrum.
Jinx
@Mike Kay:
What! I thought that Garth Brooks inaugueration concert performance definitively proved that Nashville had been assimilated by ACORN. Hell, he tipped his hat to the President! Game over in the battle for the soul of country music.
Miley Cyrus? She may be a foot soldier in Obama’s war to subvert all that America holds dear, but the battle of Music City ended long ago.
I feel so bad for Andrew, his regiment must be cut off, forced to rely on old intel.
Salt and freshly ground black people
@flukebucket: LOL. Too bad the rest of us are in a mental recession and can’t join him.
Porlock Junior
@Cat Lady:
I’ll vote for that. In fact, I was going to respond to Violet in re: Bair. It was particularly striking at the height of The Crisis, when there was this triumvirate in charge of everything, except one of them wasn’t a vir. The two viri were the secty of Treasury and the Fed chairman; the unvir, Bair, was the one who was concerned with the effect of it all on actual people. Can she ever find a respectable job again?
bob h
More shoes are going to drop pretty soon. Germany and U.K. are considering action against Goldman; the E.U. may take action based on Greek securities, and bank-on-bank lawsuits will probably break out. Big clients with fiduciary responsibilities may flee. Good luck, Lloyd.
Will Goldman become the first test of the new bailout regime?