Get Thee Behind Me Satanic S.E.C, We Do God's Work Here!

LLoyd Blankfein Stands Up

The New York Times reports that Goldman employees are rallying around Goldman chief Lloyd Blankfein, and we honestly don't blame them. The S.E.C is being highly selective and arbitrary in its attempt to manufacture some justice. We understand the Administration's desire to get financial reform done, or give the people some sense of justice.

But if you are gonna take action, and bold action at that, you had better have precedent and the facts on your side, and it remains to be seen whether the government can prove Goldman violated the standard Wall Street way of placing CDO offerings. If Goldman was not unique, then we should expect a ton of further actions against other firms, for consistency's sake. But if you are bringing similar charges against everyone, you are either saying everyone was corrupt, or nobody was. We doubt either option is a preferred option, but that is the corner wall the S.E.C. is about to bang its head against.

In the days since, Goldman’s board and employees have rallied around senior management, including Mr. Blankfein, the chairman and chief executive. Goldman employees are shocked, even angry, that the Securities and Exchange Commission has filed a civil fraud suit against their bank. Goldman is ready for a fight, and Mr. Blankfein, his defenders insist, will prevail.

(N.Y.Times)

What we like here is Blankfein's refusal to back down under the pressure from people who really have no ability to comprehend the details of the transaction. Very few people even realize how much Wall Street facilitates business and capitalism. People are outraged over someone making money, and of Goldman coming out on top and being unrepentant, but at the end of the day a crime has to be proven. It's not enough to talk of "moral bankruptcy" with retroactive fervor. Goldman was one of the few firms that diligently managed its own risk and responsibilities, and for that they should be admired.

Hopefully Lloyd won't cave. Nor should we expect a return to a firm dominated by investment banking, when the trading culture proves more suitable to profit making in any economic environment.