(2011-05-15) Taibbi Goldman Levin

Matt Taibbi notes that it smells like a number of Goldman Sachs people lied to US Congress in Apr'2010 about their shorting behavior leading up to Credit Crisis 2008.

*Lloyd Blankfein went to Washington and testified under oath that Goldman Sachs didn't make a massive short bet and didn't bet against its clients. The Levin report proves that Goldman spent the whole summer of 2007 riding a "big short" and took a multibillion-dollar bet against its clients, a bet that incidentally made them enormous profits. Are we all missing something? Is there some different and higher standard of triple- and quadruple-lying that applies to bank CEOs but not to baseball players?

This issue is bigger than what Goldman executives did or did not say under oath. The Levin report catalogs dozens of instances of business practices that are objectively shocking, no matter how any high-priced lawyer chooses to interpret them: gambling billions on the misfortune of your own clients, gouging customers on prices millions of dollars at a time, keeping customers trapped in bad investments even as they begged the bank to sell, plus myriad deceptions of the "failure to disclose" variety, in which customers were pitched investment deals without ever being told they were designed to help Goldman "clean" its bad inventory. For years, the soundness of America's financial system has been based on the proposition that it's a crime to lie in a prospectus or a sales brochure. But the Levin report reveals a bank gone way beyond such pathetic little boundaries; the collective picture resembles a financial version of The Jungle, a portrait of corporate sociopathy that makes you never want to go near a sausage again.*

From Wikipedia:*

• On April 14, 2011, the United States Senate’s Permanent Subcommittee on Investigations released a 635-page report entitled, "WALL STREET AND THE FINANCIAL CRISIS: Anatomy of a Financial Collapse" which described some of the causes of the financial crisis. The report alleged that Goldman Sachs may have misled investors and profited from the collapse of the mortgage market at the expense of its clients. [138] Senator Carl Levin (D-Michigan), Chairman of the Subcommittee, said he would refer the report to the Department of Justice for further investigation.[139]
• On June 2, 2011, following an "exploratory" meeting with the Manhattan district attorney, Goldman was subpoenaed for relevant information.[140] Goldman is expected to accept a deferred-prosecution agreement if charges are filed.[141]*