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I would add this:

I research every bond that I buy. Doesn’t matter what the agencies are hanging on it for a rating - I treat the big three ratings agencies are all liars and frauds. I look at balance sheets and cash flows for corporate paper, pension liabilities, etc, and in muni paper I look at their budgets very carefully. This year, I’ve been buying muni paper in only six states - Wyoming, the Dakotas, Montana, Oklahoma and Alaska. Again, based on what I can read of their budgets. That’s due diligence, as I’m sure you’d say that investors must do for themselves.

Did I take some losses on some paper last year? Yep. Smart like hell, but I didn’t go whining to my government to make me whole. I have to say that the RBS situation caught me somewhat by surprise - or I should say, the savage way that RBS’ preferreds were hacked to bits in a few days caught me off guard. Didn’t change the situation. Sold what I could and took my lumps.

So.... why should we taxpayers be backstopping Goldman’s blow-ups? Did Goldman not do their own diligence in research when they leaped into the sub-prime paper market in 2001 with both feet? Why would a firm with Goldman’s supposed competence be caught so off-guard at events in the credit markets in 2008? They claim to be the best and brightest. Why didn’t they get clear of their exposure to Lehman and AIG sooner? Why did they need to be bailed out of their AIG position at a buck on the dollar? I saw AIG’s meltdown coming way back in March of 2008 - and I was clear of their nonsense by the end of March. No Ivy League degree or government connections here. Just looked at how the company was acting and what they were (and were not) addressing in investor information.

If champions of capitalism are saying that customers of Goldman “...should have done due diligence...” then apply that dictum to Goldman themselves. Because it is very clear that Goldman is just as ignorant of risks as the people they’re peddling to. Goldman is merely better connected to the Fed and Treasury than their victims, and has gained restitution for many of their losses, while their victims are left holding chump change.

Moreover, let us ask why does Goldman need to have multiple conversations nearly every day when there is market turmoil with the US Secretary of the Treasury, the Fed Bank of NY and possibly the Fed Chair? If they were really as competent as they claim they are... they wouldn’t need to be so chatty with the regulators and government.

If one is to be a capitalist, then one has to walk the walk - which is supposed to be done with one’s own capital and the courage of one’s own convictions, without a hand in the taxpayers’ pockets.

As such, and for a host of other reasons, I’m all in favor of big investigations into Goldman’s actions throughout the last 10 years.

The action that capped it for me was the following:

http://online.wsj.com/article/SB124139546243981801.html

That settled it for me. That he’s on Goldman’s board and was invited to be on the NY Fed and the stock PURCHASE he made wasn’t enough to get him removed from the Fed... that just blew my fuse. I might have bought the idea that he needed a waiver for stock he owned prior to GS being made into a bank holding company; that was an extraordinary action that he probably had little control over at the time. But purchase of NEW stock, that clearly went outside the rules of the Fed? No way.

That, BTW, came after the CFO of Goldman lied to investors on the September 16th, 2008 investor conference call in which the CFO said that Goldman’s exposure to AIG would be “immaterial to earnings.”

Goldman is clearly using and abusing their network of former execs in government to help smooth their path for their benefit. This has to stop if people are going to believe in our financial system as being fair and equal for all investors. If we continue down this road, we’ll have a market that is seen by the populace as being rigged for the connected insiders and anyone who is a small retail investor is seen as a dupe and a mark.

I certainly have nothing against “the rich.”

I do, however, have a major beef with “the rich” who use connections to make their profit, rather than sound business sense and hard work.

Just as you do, I am appalled by the lobbying activities of GS (which are more visible, incidentally, but not worse than that of others; Detroit lobbied a lot harder than Wall Street, for instance) as well as by the leftist leanings of its management.

But, in a Judeo-Christian country like ours, people are accused of what they do and not for who they are. The article describes, largely falsely, a simply act: one unit of GS (which by law is PROHIBITED from interacting with research units) has made a bet and won. That's all that happened. There is nothing nefrious here, but most people have not a clue of how these things are done and, on top of that, view GS as a monolith --- just as the NYTimes and other commies write about them. And they criticize GS falsely, showing nothing but hate.

However inadvertently, perhaps, you have done the same. You grievances, which I share, have nothing to do with the issue at hand.

And, as before, you are all to free to accuse people without evidence:

"I treat the big three ratings agencies are all liars and frauds."

As I pointed out on antother thread, bad outcomes need not result from fraud. They can result from poor state of the art, mistakes, and negligence, for instnance. A person that throws words like fraud so freely is a bad Jew and a bad Christian (depending on faith). And a bad American, because restraint from doing so is one of the things that differentiated us from Europeans for centuries.

"I certainly have nothing against “the rich.”

That well may be, and I take your word for it. Not knowing what's in your head and heart, I take your word for it (there is nothing more prone to error than imputing motives to people --- and you do that with an amazing ease). I can reply only to behavior. And when it comes to what you say, your words are indistinguishable from those that do hate the rich and attempt to bring about socialism in this country. Lening called them "useful idiots" --- well-meaning folk that nonetheless, however inadvertently, play in the hands of the commies.

As I wrote to you befre, your and mine motivations are not enough; it out duty to establish the facts and focus on wrong-DOING rather than personalities of those involved. Your analysis tends to be too cavalier and aimed at "easy truths," low-hanging fruit that is all to easy to pick. Having heard all this, you chose to continue, which is your right. But I shall not be writing such extensive posts in the future: were you simply to raise the standards of your analysis, you'd easily refute your own hypotheses yourself. And if you chose not to do that, then so be it.

Have a good day.