Who is greedier: The pension fund duped by Goldman into a bad investment because it is chasing returns, or Goldman for taking advantage of that greed to achieve its higher level of greed?
As Buffett argued in his nauseating defense of Goldman, any investor should have been able to make sense of the Abacus deal sheet if they were investing in it, and that's true to some degree, though it's a simple-minded defense of a raw deal by a man a lot smarter than that.
Positions staked out on Goldman have always been extreme. Support of Goldman, as in the case of Buffett, or hatred of the firm and all it represents -- the Vampire Squid cottage industry -- is still the dividing line. Is adding one more voice breaking out from inside the machine the tipping point in our understanding of Goldman and why its own form of capitalist greed is different from the rest of Wall Street's?
Capitalism will always be more complicated than any extreme opinion would have you believe it is, and trotting out Goldman is a convenient way of saying one member of the flock has strayed as opposed to dealing with a flock that is collectively wayward and hemmed in by contradictions.After all, I can argue sarcastically that Smith is categorically wrong in saying Goldman is more interested in its own profits than those of its biggest institutional clients by pointing out that a former Goldman board member was passing inside information to one of the largest hedge funds in the world, Raj Ratnaram's Galleon Group. That's going the extra -- in this case criminal -- mile for your most important clients. Goldman didn't want to take credit for that bit of "premium" client relations, but I would say it tells us as much about Wall Street's relationship with the biggest institutional investors as does Smith's attack on Goldman as a profit hoarder that has stopped representing the interests of the Middle East sovereign wealth funds, hedge funds and pension giants. Goldman shares are down more than 3% Wednesday and instead of no-selling the Smith op-ed, the firm came out with a strong public relations offensive -- dismissing Smith as a low-level VP, and also running well-timed ads on CNBC, and having CEO Blankfein take a break from "God's work" to respond directly.
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