Serious Money: Goldman Sachs Shares Dirt Cheap

Sheldon, you and I will never agree on this. However, when the economy began tanking due to among other things the swaps and market manipulations of various houses, including Merrill and Lehman, as well as Goldman, I predicted that criminal charges would be levied against both Goldman and Blankfein, the latter being ultimately responsible for Goldman's actions. Those actions include fraudulent failure to disclose information known to Goldman when it bought insurance on the swaps from AIG, payment for which caused AIG's demise. Blankfein's salvation (unlike Merrill and Lehman) was that his crony was Hank Paulson, who used tax dollars to rescue Goldman instead of allowing it to fail, which it definitely would. The failure of Goldman would have been no worse than the failure of any other large business over the history of this country and is one of the risks shareholders must assume. (Remember the "dot-com" play money boom and bust?) My analysis would indicate that Lloyd Blankfein is a greater criminal than Bernie Madoff - the harm he caused has had, and will continue to have, a far greater impact on our country. I continue to advocate the forced liquidation of Goldman, which can be accomplished by the permanent revocation of its bank charter and brokerage licenses and those of its employees.

Allen,

Thanks for sharing your thoughts. There always remains room for reasonable people to disagree.

For starters the SEC charges regarding the dubious and questionable practices of GS and others seem to have at least some merit. However the $1 billion loss of a multi-billion dollar fund that should form its own opinion, as you or I would, is far from the outright lying, cheating and stealing of Bernie Maddof's $20 to $30 billion heist. And shame on the SEC for missing that heist after a dozen reviews of Maddof. GS is paying the price for the historic ineptitude of the SEC.

AIG was just as greedy as the next swindler and relied on AAA ratings by negligent ratings agencies that are escaping the net after a major contribution to the melt-down and this too is not the fault of GS either.

As for Paulson saving GS, I might agree that this is highly suspect and a clear conflict between Washington and Wall Street -- there we are in complete agreement.

Forcing them into bankruptcy? That I would leave to further discussion about the value of having the largest investment bank be our scoundrels or that power be handed over to the Swiss (UBS) or German (Deutsche Bank) scoundrels. I vote for our scoundrels.

I blame Washington more than Wall Street for our problems. They allowed Thrifts and Banks to be one and the same. Then they allowed investment banks and commercial banks to be under the same roof. Then they allowed them to take on the insurance business (and risk). It's endless...

They also allowed and actually pushed Fannie and Freddie to buy up mortgages with almost no scrutiny of the customers ability to pay, allowed no or too low down payments, kept interest rates too low too long and pawned off some of their massive holdings into the CDO's that Wall Street was peddling.

The Congress, SEC, President, FED, DOJ, and the entire establishment failed the people they were put in place to serve -- and today's day late and dollar short persecutions can be remedied by strict regulatory reform and less chest beating.

Regardless of our views of the mess we are in and how we got here GS is cheap unless the government wants to shamefully put them out of business.