You're not getting it. There is no "government", and no "Goldman Sachs". They are two halves of the SAME entity. Goldman Sachs and other firms like them ARE the government. It just looks otherwise because we have a sham of an election every few years. If our elected officials actually represented "we the people" instead of their true corporate masters (the bankers), then they would be looking out for our interests. They do not, because we are not really their true constituency. No, the average American has no fault in bringing a highly leveraged system to the brink of collapse. If GS and others hadn't amplified the stupidity of the average American tenfold, we would never have had a crisis like we did last year where the entire financial system almost collapsed. THAT is entirely their fault, and has nothing to do with the people. None of this is actually GS's "problem". In fact, the people who put this together were fully aware that it was going to lead to a bubble and a collapse. Some of you guys are very naive, it's pretty scary. The whole point of a bubble is to create a set of conditions where the natural stupidity of the average human being will take a phenomenon like housing prices or internet stocks, and drive it to unsustainably high levels. While this is going on, you and your little investment banker friends get to personally make incredible cash. And when it collapses, who cares? Even if the firm goes under, it doesn't matter because you've already personally extracted billions from the firm in ridiculous and completely undeserved bonuses. But in any case the firm doesn't even end up going under... your buddies in government just bail you out with taxpayer money. Then they make some noises about reform which never really happens, and you get to do the whole thing over again. The entire system is designed to function this way. You guys who think that we live in a society with a truly free market and that somehow GS is where they are because they "earned" their way to the top are truly deluded.
The question is not "are markets free and un-manipulated". The question is "how does one profit from it". Every single second spent thinking about Blankfein, Geithner or Bernanke is a second one did not spend productively. Just my 2c.
The only way you can - by reading the chart. Well, most seconds anyways. It is useful to know that the game is rigged and to be able to anticipate what the manipulators have in mind, so you can profit from it. Other than that, it's pretty useless to dwell on this stuff or get angry that it happens.
In a follow up to questions raised by Simon Johnson as to how Goldman Sachs, as a bank holding company, is able to conduct private equity transactions in non-financial industries, I have learned that Goldman is no longer a bank holding company. Yup, they are now a financial holding company. Simon Johnson got caught looking under the wrong shell. Goldman converted to a bank holding company when they recieved TARP money, but they unconverted from that real fast and are now, as of August 14, a financial holding company, according to a conversation I had with Goldman spokesman Lucas Van Praag. Van Praag tells me that, even as a bank holding company, Goldman had various exemptions from 2 to 5 years to conduct various non-financial transactions. But, now, it is apparently full speed ahead for Goldman to do whatever the hell it wants. They will, of course, still be under the supervision of the New York Fed, but Van Praag told me, "We are happy with that." That's what pisses me off. Special treatment while others have to keep the rules !
To all those that are sticking up for their corporate banking masters with the "just trade, it's irrelevant" mantra: You do realize that if Goldman and others didn't get and continue to get such special treatment - we would all have more money? And that means today and tomorrow. There's only so much money in this world. The more someone else has, the less for you to earn. Think how you make your money - think how they make theirs. Losers beget winners. Who sticks up for you, who sticks up for them. And in the grand scheme of things how does that affect you. Now think it thru. I'm talking trading, future taxes, inflation, etc... Think Macro - we are all impacted by the actions of others 24/7 - not just when we trade. No need for me to elaborate any more. If you don't "get it" you don't "get it," and you're just a brainwashed tool.
I don't think that the "just trade" mantra means that you necessarily support GS or what they are doing. It's just that it is completely impossible to do anything about it, so worrying about it is a waste of time. The most rational thing to do is to just understand what is going on, accept that it is inevitable, and align your interests so that they match with the powers-that-be as much as possible. Case in point: the rally from March. It was obvious that major people in power wanted the market to go up as far as possible for the last 6 months, so it went up as far as possible. The only people who suffered during this rise were the naive fools who actually believed that we have a free and fair market, and that it should fall because "fundamentals say so". There really isn't much point in stressing about this type of stuff, because it cannot be changed. I will agree that those defending GS as some kind of good corporate citizen are pretty stupid, though.
The only thing you're missing from your post is correlation between space aliens and free masons. Yes, the system is corrupt - that's not up for debate. It's not insightful to bitch and moan about how "unfair" things are. If people are just realizing how things can be manipulated you are already so far behind the experience curve you may never catch up. People need to stop bitching and make something of themselves. The govt. isn't going to stop you from starting a business and making it successful. Along the way you will need to do things that are ethically questionable; so the fuck what. If you have a problem with it move to another country. The govt. bailed out AIG because AIG was literally too big to fail; the lender of last resort stepped up and did its job. Saying uneducated statements like "if AIG went down so would Goldman" is just plain ignorant. If everyone were to go down then no one did it right and everything would collapse - there are people /firms out there that do it more fairly/ethically/morally than others which didn't deserve an Enron-like fate. Don't confuse the issue: greed is good and AIG was the real systemic problem.
I never said that Goldman would have gone down if AIG went down, I said if the government hadn't stepped in and shored up the whole system after Lehman failed then Goldman probably would have gone down too. In any case if you actually believe that load of crap about unbridled greed being good for all of us, then you really are a complete moron. Maybe there are firms out there that are ethically and morally sound, but GS sure as hell isn't one of them. In any case, you keep on living in dream-land. If you are too dumb to see that the whole system was set up this way from Day 1 for the benefit of the rich and powerful and that the whole game is rigged, then there is nothing I can do for you. It doesn't really doesn't matter very much anyways, since none of us are going to change it... I've probably already wasted too much time on this useless topic as it is.
Blankfein: You're right, we cannot live without a healthy system. In the days after the collapse of Lehman Brothers, when everyone was panicking, we received $5 billion from Warren Buffett and then raised $5 billion from public equity investors. But, we couldn't make ourselves healthier than the system. Those who fail to recognize that the aid given by governments to the financial system benefited everyone are deluding themselves. http://www.spiegel.de/international/business/0,1518,650289,00.html