Interesting timing on a couple of Internet items the other day.
Numero uno is Goldman Sachs’ quarterly financial reporting. Apparently the second quarter of calendar 2009 was a veritable bonanza for the button-down types at Goldman. The largest remaining investment bank on Wall St reported revenue of $13.8 billion and profit of $2.7 billion. This represents a staggering 65% jump in profit over the same quarter in 2008.
The MSNBC article linked above cites all sorts of nice, up-and-up reasons why Goldman continues to rack up the bucks despite the current environment of gloom and doom. Gutsy trading strategies and sharp employees are cited, along with billions in taxpayer money (all now repaid) and the death of most of the competition all contribute, according to the article.
Maybe so. But maybe there’s more to it.
Twenty-first century gadfly, and walking advertisement for the benefits of routine dental checkups, Matt Taibbi is back in the pages of Rolling Stone, administering a smack-down on Goldman specifically, and investment banks in general. He levies the charge that Goldman has been behind, or at least right in the middle of, every major market manipulation since the 1930s. More recently, Taibbi tells us, Goldman has engineered the DotCom bubble, the housing bubble, and last summer’s commodities (read: gasoline) bubble.
In the past, I have rejected Taibbi’s rants as paranoid, conspiracy-theory baloney. In retrospect, I’m not so sure I wasn’t wrong about that, at least in part. The guy does his research. Yeah, he makes some leaps that I have trouble following, but he makes it sound plausible.
I had, in fact, only been somewhat taken by The Great American Bubble Machine (the Goldman piece), right up until Goldman reported results the other day.
Co-inky-dink? I dunno. Read Taibbi’s article and you decide.
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