The Goldman Sachs Hearings: 'Fantastic Theater'

At 8-plus hours, it's literally epic

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The sensational Goldman Sachs hearing in the Senate Governmental Affairs Subcommittee on Investigations is still going on: the main event of the day-long bloodsport, Goldman CEO Lloyd Blankfein's testimony, is now about halfway done. The reaction to the gladiator games has been tireless and explosive--not least for Senator Carl Levin use of the word "shitty" (quoting a Goldman e-mail) a dozen-plus times. Here's what the community of financial commentators has to say about the epic political theater:

  • No, Goldman Didn't Have to Say It Was Short  The Atlantic's Megan McArdle is frustrated with Sen. Carl Levin's continued question--"Shouldn't Goldman have told buyers that it was short?" The answer, she says, is no. "It is true that clients would like to know what Goldman is doing, but it's also true that the seller of the house I just bid on would like to know what my reservation price is.  That doesn't mean that I have some obligation to disclose this information."
  • Is This It?  "Goldman Sachs stock soars as market realizes senators are just full of hot air," tweets Henry Blodget of Business Insider, who has been skeptical of the SEC suit from the beginning. Reuters's James Pethokoukis is similarly unimpressed: "Goldman Sachs on Capitol Hill. Once again, they are the smartest guys in the room," he says. "The level of ignorance of trading on this Senate committee is staggering," agrees former White House spokesman Tony Fratto. "Can't they bring in specialists to ask questions?" Pethokoukis continues. He points out that there is a precedent for this. "Oh, wait, this really isn't about getting information," he writes. Megan McArdle, taking to Twitter, is just confused: "Senator Levin seems to be angry that Goldman Sachs didn't lose a bunch of money so they'd require a bigger bailout."
  • Sen. McCaskill Brings Down the House  Business Insider's Joe Weisenthal marvels over Missouri Democrat Claire McCaskill's grilling of the Goldman employees, finding it "the most compelling exchange so far" in the early afternoon:

Sen. Clair McCaskill of Missouri is hammering Goldman, comparing it to a bookie, and demanding to know what the firm's "vig" is.

Obviously the questioning is making the Goldmanites very uncomfortable, since they can't really acknowledge that they're playing the role of bookie, even though that's exactly what they are. Market maker is just a fancy word for that.

  • Scandalous  Time's Barbara Kiviat calls the hearing "fantastic theater. The kind of theater that makes you want to run to the restroom to vomit." Goldman Sachs top brass, she concludes from the remarks, "still don't get it."
  • This Is About Money--It's the Money We Find Scandalous  "As most of the smart set have pointed out, a fair amount of the berating of Goldman Sachs execs on the Hill earlier today didn’t really make sense," admits liberal Matt Yglesias. "Which just returns to the point that, though we’re reluctant to admit it in respectable circles in the United States, it's the money as such that’s the real scandal here. If Lloyd Blankfein were living humbling on $800,000 a year (i.e., 15-20 times the median household income) and donating the rest to charity then I think you’d have to say that what's good for Goldman Sachs is good for the world."
  • 'You Can't Handle the Truth'  Business blogger Bill McBride at Calculated Risk posts an anonymous reworking of the famous Jack Nicholson monologue from A Few Good Men. An excerpt:
Goldman Sachs has a greater responsibility than you can possibly fathom. You weep for Lehman and you curse derivatives. You have that luxury. You have the luxury of not knowing what we know: that Lehman's death, while tragic, probably saved the financial system. And that Goldman's existence, while grotesque and incomprehensible to you, saves pension funds.
  • 'Fab Tourre: "I Feel Sad"' New York Magazine's Jessica Pressler sums up the nearly comical testimony of Fabrice Tourre, the one individual mentioned in the SEC charges and the alleged engineer of the deal being investigated. She distills the testimony of three of the other Goldman executives similarly, commenting also that Dan Sparks is "hot" and Josh Birnbaum is shocked at being asked to "editorialize about the financial system."
This article is from the archive of our partner The Wire.