I thought about entitling this post, “Goldman Gets Blasted For Selling a ‘Sh-tty’ Deal,” a phrase borrowed from an internal Goldman Sachs email that Senator Carl Levin chose to cite in his questioning of current and former Goldman Sachs executives during Tuesday morning’s investigative hearings into the financial crisis. But then I thought about all the kids who might see that and giggle, instead of thinking more deeply about the grown-up world they are soon to enter, one characterized by Wall Street firms that can borrow from the Fed, take federally insured deposits, and also act really, really nasty in the marketplace.
In his opening statement, Senator Levin characterized Wall Street’s ethics as “unbridled greed.” He then cited the “sh-tty deal” several times and I even think he enjoyed saying it on national television, knowing full well that despite all of the fine sentence parsing by Goldman’s executives, everyone watching the hearings would know exactly what was meant by that colorful phrase—the citation comes from an internal Goldman email noting, “Boy, that Timberwolf deal was really sh-tty.” Levin then said that evidence showed that Goldman sold that deal to its clients even after noting its poor quality. The respondent, former Goldman partner Daniel Sparks, said he did not know that to be true.
As the hearing progresses it’s becoming apparent that almost nothing is acknowledged to be true, and that nothing can be agreed upon as to Wall Street’s role in the economy and its responsibility to its clients. What’s also becoming apparent is this: Don’t call executives to publicly testify while their firm is being sued by the SEC for fraud. The most you’ll get from it is a colorful phrase or two.