Paramedics find 1,100-pound Goldman Sachs buried in cupcakes and pizza


There's nothing wrong with America that Dick Gregory can't cure.

With Memorial Day right around the corner, you're no doubt ready to settle into a beach chair with a copy of the Senate Subcommittee on Investigations' 639-page Wall Street and the Financial Crisis: Anatomy of a Financial Collapse

Well maybe you're not actually going to read the report [pdf], which was co-authored by Sens. Carl Levin (D-Michigan) and Tom Coburn (R-Oklahoma). But you still might enjoy Matt Taibbi's gloss on it in Rolling Stone

Goldman, as the Levin report makes clear, remains an ascendant company precisely because it used its canny perception of an upcoming disaster (one which it helped create, incidentally) as an opportunity to enrich itself, not only at the expense of clients but ultimately, through the bailouts and the collateral damage of the wrecked economy, at the expense of society. The bank seemed to count on the unwillingness or inability of federal regulators to stop them — and when called to Washington last year to explain their behavior, Goldman executives brazenly misled Congress, apparently confident that their perjury would carry no serious consequences…

Defenders of Goldman have been quick to insist that while the bank may have had a few ethical slips here and there, its only real offense was being too good at making money. We now know, unequivocally, that this is bullshit. Goldman isn't a pudgy housewife who broke her diet with a few Nilla Wafers between meals — it's an advanced-stage, 1,100-pound medical emergency who hasn't left his apartment in six years, and is found by paramedics buried up to his eyes in cupcake wrappers and pizza boxes. If the evidence in the Levin report is ignored, then Goldman will have achieved a kind of corrupt-enterprise nirvana. Caught, but still free: above the law.

I thought the claim that Goldman was too good at making money died three years ago, when American taxpayers were, against their will, committed to paying $700 billion so the investment bank and its direct counterparties would not lose money on their bad bets. Had that not happened, we would now be looking at a poorer, wiser Goldman Sachs, several fewer financial behemoths of both U.S. and European vintage, and a true price for properties in the American real estate market. 

Instead we get Taibbi fulminating in his wooly way about Goldman's escape – "as its clients roasted to death in a raging conflagration of losses," and so on. He rightly reviles the bank for dumping "a huge lot of deadly mortgages on its clients." He stands up for corner-store Arabs: 

Yes, they will say, it may very well be a prosecutable crime for a corner-store Arab to take $2 from a customer selling tap water as Perrier. But that does not mean it's a crime for Goldman Sachs to take $100 million from a foreign hedge fund doing the same thing!

What kind of crazy magazine would have claimed the states were broke in 2003?

While Taibbi's foot-stomping Rumpelstiltskin rants are always enjoyable, this is just woolgathering. The Great Disappointment occurred in 2008, when a banking system that needed to die was allegedly saved. It's fine for Taibbi to get his Irish up about the bailouts that all, in one way or another, ended up keeping Goldman from losing money. It's fine for him to call for fraud indictments – though I'm less confident than he is about the prospect for justice in a world where famous-enough people can be imprisoned for acting on a good stock tip, and the full RICO-invoking, wiretapping power of the state can be initiated (against a big Democratic donor by a Republican Justice Department – just sayin') over the made-up crime of "insider trading." (Like all made-up crimes, insider trading is advertised as a subdivision of an actual crime – fraud – but is in practice used to criminalize behavior that falls short of the actual crime.) 

But there's no way to prosecute $700 billion back into our pockets. Which is why Taibbi's fulsome praise of Levin (a "Harvard-educated lawyer," don'tcha know) is not to be taken seriously. Levin showed where he stood in October 2008, when he joined 73 other senators in approving the TARP. 

Prior to that vote, Levin in June supported the $300 billion Housing and Economic Recovery Act of 2008. This first effort to rescue the GSEs Fannie Mae and Freddie Mac put taxpayers on the hook for a much broader range of bad mortgages, while also encouraging home buyers to take on larger piles of taxpayer-guaranteed debt. It also failed to make Fannie and Freddie solvent; they were put under a Treasury Department conservatorship in September of that year and have gone on to suck hundreds of billions of dollars more out of the taxpayers. Arguing for an auto industry bailout later in the year, Levin used the logic that it was only fair given the above bailouts for the financial industry.

In 2008, Levin was one of the most powerful people in a broad-daylight conspiracy to prevent nature from taking its course and punishing malefactors. Now we're supposed to be grateful because his subsequent grandstanding resulted in the word "shitty" being uttered in the U.S. Senate? Even knowing his taste for potty language, I'd expect Taibbi to have a higher standard for what he lets past his bullshit detector. 

NEXT: IMF's Dominique Strauss-Kahn Arrested on NYC [Attempted] Rape Charge

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  1. Context might be helpful
    is the new
    It depends on what the meaning of the word ‘is’ is

  2. Seone is going to jump in and start blathering about how the TARP loans were paid back, so let me just jump in and say that it’s not tha $700 billion TARP package we should be angry about now.

    It’s the $1.25 Trillion Federal Reserve Mortgage Backed Securities Purchase Program…..rm_mbs.htm

    Those purchases, which amount to freshly printed dollars in exchange for toilet paper, do not have to be paid back. And it is now the central bank of the US whhich is saddled with the losses that should have belongs to Banks such as Goldman Sachs, not to mention Deutsche Bank, Credit Suisse, BNP Paribas, UBS Securities, and RBS (Royal Bank of Scotland) Securities.

    1. There’s also the huge value of the free put option the U.S. government implicitly wrote — for free — on the equity of every major U.S. bank. And the money being ripped off from savers being paid 0% on their cash in the Fed’s bid to stealthily recapitalize the banks.

    2. It’s the $1.25 Trillion Federal Reserve Mortgage Backed Securities Purchase Program…..rm_mbs.htm

      We should be mad about TARP AND the American Structured Securities Rescue Act for a Prudent Economy.

      And the Stimulus. And everything else.

      1. Well, yeah.

      2. Where the acronym would be ASSRAPE…

    3. Remember how the government pissing away $10 million used to be worth getting outraged about? That “m” switched to a “b” real fast in 2008.

  3. I’d be surprised if the federal government decides to prosecute its own accomplices.

  4. at the expense of society.

    But I thought society was to blame.

  5. blathering about how the TARP loans were paid back

    If, by “paid back” they mean “a gigantic transfer of wealth”.

  6. “But there’s no way to prosecute $700 billion back into our pockets.”

    Maybe not, but what it may come to is a bunch of Blankfein, Cavuto and Dodd types being Mussolinied in Central Park. Yea, that’s the ticket.

    1. I’ll settle for Geithner getting that treatment.

      1. Only if Bernanke is Clara Petaccied with him.

        1. Isn’t Bernanke the older one?

          1. “Mussolinied” was already taken.

      2. Hang Paulson first.

    2. 1100 pounds of flesh, as it were.

  7. When the underclass gets out of control, the rabble break windows and loot Korean grocery stores. When the political class gets out of control, the elite break constitutions and loot the treasury.

    (Foster’s rule 4 of social disruptions.)

    1. So, has the political class ever been truly in control? Not just fairly well behaved, but really under control.

      1. in control should read under control.

  8. Who are the paramedics and who are the cupcake and pizza delivery persons?

    1. Paramedics = shareholders

      Delivery Persons = Federal Government

  9. systemicfailuretoobigtofailtheconsequensesofnotactingIsavedtheworldwithTARPthedominoeffectbilliondollarcampaignfundrepublicanobstructionistsallgeorgebushsfaultmorehopemorechangeprosperityrecoverymorejobs.

  10. Instead we get Taibbi fulminating in his wooly way about Goldman’s escape ? “as its clients roasted to death in a raging conflagration of losses,”

    Any mention of pyromaniac Fire Chief Timmay?

  11. We’re SAVED!

    Motivated by a single complaint, Mayor Will Flanagan is seeking to remove from store shelves a brand of brownie that contains a chemical potentially dangerous to children.

    Flanagan announced Wednesday that he will submit an ordinance to the City Council banning the sale of Lazy Cakes in city stores. He wants the brownies pulled because they contain melatonin, a legal substance used to regulate or induce sleep. Flanagan said he was concerned the product packaging would makes the brownies appealing to children, who could be harmed by the high concentration of melatonin.


    “The product says it’s not for children’s use, but the psychedelic packaging and the cartoon character Larry Lazycakes on the package say otherwise,” Flanagan said. He added that the product’s website promotes drug culture, with puffs of smoke clouds in the design.

    The brownies carry a printed warning that they are for adults only, but Flanagan said the packaging appeals to children. He said the consumption of Lazy Cakes could serve as a gateway to illicit drug use.
    He called it “shameful” that a corporation would market such a product in a way that could entice children.

    1. Here’s to hoping that there’s a special place in hell for nanny statist fucks.

      1. But first, you must hope that there is a hell.

  12. There is nothing worse than a hack ideologue trying to be cute.

    1. Which is why you never are, right, Edward?

  13. “If kids start eating these brownies we could have a tragedy on our hands, and I don’t want to see it in my city,” Flanagan wrote in the letter to HBB, LLC.

    Flanagan’s effort to ban Lazy Cakes follows on the heels on a recent city ordinance banning the sale of tobacco products at pharmacies. But the mayor said the ordinances are not intended to tell people what legal products they can purchase.

    “The health and safety of our children is always a priority in my administration,” Flanagan said. “I’m going to take proactive steps to remove those dangers from our children.”

    the ordinances are not intended to tell people what legal products they can purchase.

    Oh, okay.

    1. Well, of course they’re not. The ordinances are intended to tell people that everything they shouldn’t have is illegal, so they can’t purchase them. What’s left, by definition, is legal, and they can choose whatever they want from that.

  14. This is comical. It lends itself to conspiracy theorizing easily. Rail against rich people looting the public. Then vote for the loot to be given to the rich people. Then write a report railing against rich people accepting the loot you have given. Lolz.

    Come on Taibbi, can’t you see thru that? How much ever the lefties slander the tea partiers and Republicans in general of being corporatist tools (and many are for sure), remember it was the Republicans in the House who defeated TARP at the first vote, and then were threatened and beaten into oblivion by the media, democrats and senate leadership to vote for it the next time around.

    1. Then let the rich people pretend to pay the money back. While quietly paying them billions of dollars to pick through their garbage.

  15. God, the idiocy and populism of Tiabbi, Yves Smith, and Simon Johnson tire me to no end.

    Tim, have you read Roger Lowenstein’s piece in BusinessWeek yet? ( I’m probably biased in that I agree with it entirely, but I think it needs to be broadcast more. When the vast majority of Enron convictions have been overturned. The public needs to learn that unethical business is not criminal. The latest insider trading big conviction was done in part because one of the jurors though the name of his fund (Galleon) was an allusion to pirates.

    I, meanwhile, am happy to stay in capitalist-friendly countries in Asia.

    1. I loved Yves for a while but about a year or two ago the Naked Cap site turned, man, it turned.

      Also, an ex-Government Sachs thief is about to replace Trichet as head of the Euro Central Bank. To be announced tomorrow. Pretty sweet shitstorm.

    2. Uh, Rajaratnam was convicted on 14 of 14 counts, which required the agreement of 12 jurors. He’s absolutely guilty of insider trading, which is unambiguously illegal. His appeal will not revisit the facts, just whether the government had sufficient authority to use wiretapping when he wasn’t ultimately convicted of mail or wire fraud. He’ll probably lose.

      Anyone in finance worth his salt knows what material non-public information is, and that a good example would be private advice direct from a board meeting. And a good example of illegally trading on that information would be turning around and making a trade in 5 minutes. Finance is an ethical swamp, but issues like this are extremely clear-cut.

      1. And for what it’s worth, I agree with the article. It’s right that no executives are in prison for managing their banks incompetently. It would be nice and comforting if all economic downturns were caused by easily prosecuted fraud, but such is life.

      2. Well yes, bad example. My point was really more pointing out that the Rajaratnam didn’t have much of a chance with the attitude of the juror.

        The interview with the juror at DealBook ( shows that she certainly didn’t need the gov’t to spend a lot of effort proving its case. She thought Blankfein could be scummy until he testified against Rajaratnam. The interview with the juror didn’t exactly give a lot of insight into whether the actual legal issues were considered.

        1. That should turn into a link if you leave spaces on each side.

          Here goes:

          (…..uror-says/ )

        2. Maybe, but consider the trial of Cioffi and Tannin, where the government’s case was so poor — and here, against a hedge fund manager whose fund lost everything — that one juror even said she was convinced enough by their sincerity that she would have invested with them.

          Thus far, honestly, I think that aside from Goldman throwing Fabrice Tourre under the bus, the outcome of these issues has been generally correct.

          I say this as someone who worked closely with the CFO of a large financial institution that struggled mightily (and didn’t benefit from TARP money, FWIW). He was a model employee, an encyclopedia of finance who worked extreme hours, yet his decisions were wrong and absolutely hurt the company. There were stupid bankers, but there were also smart, upstanding ones who made huge, non-criminal mistakes. That explanation never satisfies folks seeking cosmic balance, but it’s the correct one legally.

    3. I, meanwhile, am happy to stay in capitalist-friendly countries in Asia.

      What is this mythic ghost you speak of?


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    1. Five-finger discount?

  17. Awesome. The two most boring people are in the finals on CA.

  18. Maybe we’ll get lucky and the CEO of GS will rape someone.

  19. Unrelated story for Balko.…

    1. The campus police on OSU are absolutely horrible. I remember seeing them use about 4 cars to stop one black kid on a bicycle in the middle of the Oval. What could he have possible done to warrant that, bike theft? He didn’t even get arrested.

  20. Taibbi is a useful idiot.He has no bullshit detector that could stand in the way.

    1. His style is amusing, but he’s too busy serving up red meat to the aging Democrats who read Rolling Stone.

  21. Yes, they will say, it may very well be a prosecutable crime for a corner-store Arab to take $2 from a customer selling tap water as Perrier. But that does not mean it’s a crime for Goldman Sachs to take $100 million from a foreign hedge fund doing the same thing!

    Anyway, if he’s mad that the securities were rated AAA, then it’s the ratings agencies who performed the fraud, not Goldman.

    Taibbi’s problem is that if he took the blame to the ratings agencies, he’d have to investigate the role of the ratings agencies a little deeper and discover a little too much government involvement behind the curtain. It’s politically easier to stop at Goldman than to go one step further to discover a government backed oligopolgy behind the curtain.

    1. Unless Goldman Sachs was in some sort of collusion with the ratings agencies. Not that I know anything about this.

    2. “Anyway, if he’s mad that the securities were rated AAA, then it’s the ratings agencies who performed the fraud, not Goldman.”

      No intended defense of G/S or the rating agencies, but the mortgage market in general was hugely distorted by Frannie and Freddie acting as the drain in the sink.
      No one was looking closely since no one had to. No lipstick required; pass them suckers off! We got a buyer!

      1. The ratings agencies are damned if they do and damned if they don’t. Look at how they’re getting hounded for lowering the ratings on government bonds.

  22. Yeah, the Bulls are never going to be able to contain LeBron and DWade. Tell me again, ESPN pundits!

    1. Tulpa, you watch the NBA? Dude, that’s just a little less rigged than the WWE.

      Though I do hope this is going to be the Maverick’s year.

      1. Sorry, I decided on the Heat back in November. Better luck next year!

  23. Matt Taibbi why not tell us again about how all the subprime lenders were great investments and anyone who says otherwise is a criminal?

  24. Who said you could use my photo!!!

    1. Now I’m confused…

      [See time of this comment, versus that below]

    1. Larry David looked like Spock

  25. OK you have to admit that is pretty funny dude.

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