Goldman Sachs Trial Indefensible
"Outrage" would describe many readers' reaction to the Senate hearing last week that essentially put Goldman Sachs on trial for taking both sides of a bet on the housing market.
"This was a show trial that would have made Senator Levin's predecessor as chairman of this committee, Joseph McCarthy, green with envy," one reader commented.
Carole Berger, a financial services analyst at Soleil Securities, called the hearing "politics at its worst," politicians pandering to public anger about economic conditions and their ignorance of financial markets. "I am not saying that Goldman Sachs has never done a bad thing," Berger wrote. "However, I think the worst thing that they ever did was agree to testify before Senator Levin's committee and be so poorly coached.
In an online poll, 41% of respondents said Goldman's involvement in bearish bets against the housing market is "part and parcel of what an investment bank does — match bullish and bearish investors, hedge positions." Twenty-five percent said it is "a good reminder of the adage 'buyer beware'," while 18% said it is "the best argument yet for the Volcker Rule" and 15% said it is "more evidence we should reform the rating agencies."