Posts filed under “Financial Press”

Gasparino vs Taibbi

How often do you read two utterly opposing viewpoints — and find yourself agreeing with both of them?

I had that very same “Hmmmm moment” when reading both Matt Taibbi’s Inside The Great American Bubble Machine and Charlie Gasparino’s Stop Blaming Goldman Sachs. They couldn’t be more polar opposites, and yet each is — more or less — correct.

A brief explanation is in order:

Back in June of this year, Rolling Stone published Taibbi’s article on Goldman Sachs. It was a epic take-down,  full of righteous anger and blustery fury over Goldman’s role in, well pretty much every major bubble over the past century. The hyperbole-laden piece, its indignant tone, and the frustrated fury felt by Taibbi captured the zeitgeist of the moment perfectly. It crystallized a growing discontent over the outsized influence of Goldman Sachs — in government, on Wall Street, and especially, regarding the bailouts.

Gasparino –whom I have on occasion clashed with (see below) — correctly points out several things at his Daily Beast column:  He assumes Matt Taibbi is a nice guy (I can tell you he is) points out he is “a good writer, a really good reporter, and a provocative storyteller.” Check, check and check.

Where Charlie takes issue with the RS piece is Matt’s statement that Goldman either “single-handedly or with very little help, was responsible for the financial crisis.” And I have to agree with Charlie on that point — as I have pointed out in painful detail, there is lots and lots of blame to go around. Goldman was but one party to the debacle.

How to reconcile the two articles?

I suspect Gasparino is reading Taibbi’s piece literally — perhaps too literally. The best way to enjoy it is to think of it as the culmination of frustration by the public, with the struggling masses  infuriated at Goldman’s role in this crisis — their CEO requesting a special exemption for more leverage from the SEC (and getting it for themselves and 4 other firms), that same CEO becoming  Treasury Secretary, and then doling out trillions of dollars to inept and insolvent financial companies, and finally, Goldman Sachs hoovering up billions. We know they sucked out $12.9 billion dollars via from AIG direct pass thru of bailout monies — must be nice to get 100 cents on the dollar! Most people are probbly unaware that Goldman also grabbed $5.9 billion dollars just before AIG collapsed — a treansfer that if AIG went thru the bankruptcy processs, most likely would not have been permitted to stand.

Add in Goldman’s record profits, its enormous bonus pool, and you have an ideal recipe for a massive GS backlash.

Did they cause the crash themselves? Certainly not, but their role in it, and their uncanny ability to profit/squeeze/steal billions in unsavory and perhaps borderline legal ways — while everyone else is suffering — is why Taibbi’s piece still has resonance months later . . .

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UPDATE:  August 5, 2009, 10:57am

Charlie Gasparino adds:

“You make at least one bizarre point: You say I take what Taibbi says too literally. Oh really? Can you imagine if CNBC or any major media used that excuse when we get criticized? Maybe you have two standards; CNBC and everyone else . . .

When I say Charlie is responding literally — I meant rationally on a causation basis. The reason why Taibbi seems to be dominating the Goldman meme is he resonates on an emotional level; Perhaps that is why I gave his hyperbole the literary benefit of the doubt . . .

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Previously:
DealBreaker, Charlie Gasparino & Me (June 9th, 2009)

http://www.ritholtz.com/blog/2009/06/dealbreaker-charlie-gasparino-me/

Gasparino vs Einhorn, Kohn & Ritholtz (June 5th, 2008)

http://www.ritholtz.com/blog/2008/06/gasparino-vs-einhorn-kohn-ritholtz/

Financial Sector: Beware LEH, CIT (June 2008)

http://www.ritholtz.com/blog/2008/06/financial-sector-beware-leh-cit/

Sources:
Inside The Great American Bubble Machine
Matt Taibbi
How Goldman Sachs has engineered every major market manipulation since the Great Depression
Rolling Stone, Jul 02

http://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine

Stop Blaming Goldman Sachs
Charlie Gasparino
Daily Beast, August 2, 2009

http://www.thedailybeast.com/blogs-and-stories/2009-08-02/stop-blaming-goldman-sachs/

See Also:
Matt Taibbi: Goldman Would Have Gone Bust But For TARP (July 31st, 2009)

http://www.ritholtz.com/blog/2009/07/matt-taibbi-goldman-would-have-gone-bust-but-for-tarp/

Tenacious G
Joe Hagan
New York, 8/3/09

http://nymag.com/news/business/58094/

Category: Bailouts, Corporate Management, Financial Press, Politics

10 Links (Tuesday Version)

Here is our Tuesday Top Ten: • Loaded For Bair (The Big Money) Universally regarded as the sole member of the Bush administration’s crisis rescue team to have recognized early both the magnitude of the fraudulence in the mortgage business and the magnitude of the risk that fraud posed to the financial system, Bair has…Read More

Category: Financial Press

New Financial Media Scrum: Bloggers vs TV

Don’t-Walk-Run to this outstanding overview of the dispute between CNBC and the blogging community by Real Property Alpha: “So let’s get this straight.  Members of the televised media are now resorting to taking on bloggers in order to draw attention to themselves.  It’s sort of like picking a fight with the biggest bully on the…Read More

Category: Financial Press, Weblogs

Monday: 10 Links

Helping to make your Mondays a little bit brighter: 10 Links: • Waves of euphoria engulf Wall Street (Irish Times) • Fed Won’t Raise Rate Till 2011, Pimco’s McCulley Says (Bloomberg) • Exit the Car Czar (New York Mag) • Greenspan: ‘We’ve already seen the bottom’ (ABC) This should scare you, given the maestro’s forecasting…Read More

Category: Financial Press

10 Links (Friday Edition)

Last 10-er of the week: These are the 10 most interesting things I spotted today. • Bottom Lines Buoy Rebound Hopes: Though Profits Are Still Weak, Cost Cuts, Overseas Demand Help Many Companies Find Footing (WSJ)• CNBC Viewership Down 28% (ZeroHedge)  According to Nielsen, CNBC has lost 28% of viewers year over year.  I will…Read More

Category: Financial Press

10 Links (Thursday edition)

That worked out well yesterday with the focused daily linkfest. Once again, 10 links: • Dow Sends Buy Signal That’s Worked Since 1921: Chart of the Day (Bloomberg) • Lucrative Fees May Deter Efforts to Alter Loans (NYT) • Wall Street Analysts Keep Telling Big Earnings Lie At a time when the financial industry’s credibility…Read More

Category: Financial Press, Markets

10 Links

I keep getting carried away with the daily clickage/linkfest. Today, its only 10 links for Wednesday: • Foreclosures Are Often In Lenders’ Best Interest Government initiatives to stem the country’s mounting foreclosures are hampered because banks and other lenders in many cases have more financial incentive to let borrowers lose their homes than to work…Read More

Category: Financial Press, Markets

Monthly Case Shiller

This should be the last of the Seasonal adjustment discussions, but note the difference between the two data runs: Non Seasonally Adjusted and Seasonally Adjusted .
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click for larger chart

case0728091_big
via Bianco Research

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Media coverage was mostly gushing:

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Category: Financial Press, Real Estate

Tuesday Clickage

Tuesday clickage — quite a few items from around the web: • Michael Lewis amusingly opines:  Bashing Goldman Sachs Is Simply a Game for Fools Its important to remember, the vampire squid doesn’t feed on human flesh. (Bloomberg) Related to the above: We Fear What We Don’t Understand (Kid Dynamite’s World) • The Great Recession:…Read More

Category: Financial Press, Markets

Monday Linkage

Monday linkage — some things from off the beaten path: • Jeremy Grantham calls markets at a Boring Fair Price!, and he is Waiting for Markets to be Silly Again;  Since early March, the market has had the type of strong speculative rally that often follows extreme declines. • After calling for a generational bottom…Read More

Category: Credit, Financial Press, Markets