I don't doubt taibi uses a bit of dramatic license and hyperbole to make his point but most of what he's saying i believe to be the truth. Goldman would first of all definitely be bust without taxpayer support, and then have clearly piggybacked the gov't further for cheap loans and inside information to make mega bucks. oh, and have also indebted and busted major governments and municipalities in the process on their way to record profits. How the hell do you think goldman is making money now without any real m&a and large underwriting that existed in 2007? Probably gaming the fed in terms of free loans and frontrunning them on their mbs purchases (and soon to be sales), frontrunning their clients large orders explicitly and through HF and flash orders, and finally by facilitating more of the same swap transactions that will bring down greece or some county in alabama, much in the same way it helped bring down AIG. Long live goldman. They're doing god's work.
Karl, don't tell me you're drinking the CNBC koolaid? It shows you the state of America when a smart guy with a view about all things economic has to write for Rolling Stone because the mainstream press has whored themselves out so long for the brokerages, and for the sake of leading sheep to the slaughter.
I really try to keep away from the kool-aid. Taibi is a former pro athlete that used to write editorials on why the death of the Pope is funny and various items for Playboy. Perhaps you're the one that needs to see what's in their cup. It seems to me you've made egregious assumptions about editorials that were billed as factual. I'm not sure where you got this idea he has some economics background and RS was the only place that would take him. He wrote an article on goldman because Hanna Montana double-booked her interview with him one week.
OK. And you actually believe they're not using this order flow to help their own prop book? (essentially violating the chinese wall.) How about their role as a market maker when fed was forcing aig unwind and GS was reaming them on spreads bc they knew they were being forced to unwind. These aren't MM functions in the way one would normally think. if you or I were doing the same thing we'd be thrown in the can for insider trading.
Their prop trading is super small compared to the company's total revenue, so who the hell cares even if they do? As for AIG - that's their job. I'm not even sure they were the MM on AIG - were they?(link please) You and I can't do the same thing - we're not billion dollar companies that can afford to underwrite things like this. You cannot compare the functions of a large corporation to that of an individual, though some things are similar they are NOT the same.
Taibi reads too much Zerohedge. All this conspiracy nonsense makes a great read and generates clicks and magazine sales, but has very little real world relevance for a trader. Markets and politicians have been corrupt and manipulated from day 0. What does this matter? Does it make anyone a better trader whining on how some secret society is bending the rules and making money at the expense of others? Welcome to capitalism. Not the textbook type, but the real-world incarnation. Taibi and his fanboys should stop acting so naive as if these schemes haven't been happening all over the world for at least the last 100 years. This is nothing new. Taibi acts excited as kid as if he just unraveled some type of huge Wall St. type Watergate and as if he deserves the Pulitzer prize for his allegedly groundbreaking journalism. Give me a break. All this is old news to anybody following market history. Copy and paste.
Pretty cool, i respect the fact that since it's been going on forever you are totally nonchalant about it. Normally I try not to get too worked up about this stuff either except for the fact that our current situation seems to just be such an extreme example of wealth transfer. It doesn't bother me much if they make a few extra cents more than they should on their MM spreads for providing liquidity and having a few extra bottles of dom at the taxpayers expense, or their normal ripping off of average retail shmo's buying into their marked-up offerings and IPOs, but the last few years have pushed that boundary to an absurd level don't you think? the taxpayer has bailed them out and they could have just made out relatively well by playing the steep yield curve but that wasnt enough for them. after cleaning up on cdo underwriting and then shorting them, then collecting a further 100 cents on the dollar for their aig swaps, they then go and REAM the govt (i.e., taxpayer) again by qouting outlandish markets to undo aig's positions when they were forced to unwind - which was again partially due to their own gluttony. Goldman probably made $5-10bln between their subprime shorts, aig swaps, and MM on aig unwinding; thats not to mention all they made underwriting the cdo's that basically broke many pension funds and americans. now after all this - while im not 100% in fair disclosure - i'm quite confident that goldman received advanced knowledge of what the fed is buying on their mbs program and they were frontrunning them, increasing the price that they (we) would have to pay. Now that the mbs buying is done, theyre going to probably get out and short these instruments ahead of the fed, costing them (us) more to get out of it. if they have the balls/greed to do all that, and we already know they screwed their own clients on cdo's during the subprime years, what makes you believe that they don't frontrun the average pension fund or hedge fund that deals with them? all this plays a large role in what has created the massive transfer of wealth in this country the last couple years. millions are homeless and unemployed and these guys keep going and going. they may eventually cause the entire european union to break up (probably tiny probability but still shocking at their power and outright avarice.) I'm not a naive idiot. I realize that bankers are greedy and the little guy usually gets taken, but this is an outright robbery. Should we add the fact that with all the ill-gotten gains these bastards have made they won't even help out the damn public they screwed over by resuming lending at a moderate pace?? nah, why would you - just keep screwing them over. I guess it's guys like you who are so apathetic that allows it to continue to happen. Finally, I recognize this has nothing to do with how we should be trading markets day to day, but just some thoughts. Maybe wrong forum...