Sunday, 26 October 2008 02:00

Golden Boys guilty of a conflict of interest, nahhh!!

The Guys From ‘Government Sachs’

A most interesting article in the NY Times . Here's an excerpt...

Photo illustration by The New York Times

Treasury faces, from left: Steve Shafran (formerly of Goldman), Kendrick Wilson III (ditto), Henry Paulson Jr. (you guessed it), Edward Forst (yep) and Neel Kashkari (see a trend?).

THIS summer, when the Treasury secretary, Henry M. Paulson Jr., sought help navigating the Wall Street meltdown, he turned to his old firm, Goldman Sachs, snagging a handful of former bankers and other experts in corporate restructurings.

In September, after the government bailed out the American International Group, the faltering insurance giant, for $85 billion, Mr. Paulson helped select a director from Goldman’s own board to lead A.I.G.

And earlier this month, when Mr. Paulson needed someone to oversee the government’s proposed $700 billion bailout fund, he again recruited someone with a Goldman pedigree, giving the post to a 35-year-old former investment banker who, before coming to the Treasury Department, had little background in housing finance.

I recommend reading the whole thing.

Last modified on Sunday, 26 October 2008 02:00

5 comments

  • Comment Link Gerard Waggett Tuesday, 28 October 2008 16:06 posted by Gerard Waggett

    There's a rumor out there that GS got caught on the wrong side of the VW trade. Not sure what their exposure was but glad to hear it.

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  • Comment Link Phil V Sunday, 26 October 2008 19:54 posted by Phil V

    i sent you something apropos what I wrote...

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  • Comment Link Reggie Middleton Sunday, 26 October 2008 19:47 posted by Reggie Middleton

    No I don't realize that. GS can't do the prop trading that it did as an investment bank while it holds a federal bank charter. In addition, there is a strong chance that a no-nonsense president will get elected that will literally clean house. If any of the GS boys are left in office, the scrutiny will be real. More damage will be done to GS through conflict of interest allegations than any profit derived from a deal.

    Even after I successfully pierced the facade of invincibility and the name brand aura of GS, and even after successfully predicting their share price to drop $100, people still think this company can walk on water....

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  • Comment Link Phil V Sunday, 26 October 2008 19:39 posted by Phil V

    reggie, you realize GS and JPM are going to make a fortune arb'ing bad debt under the TARP, right?

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  • Comment Link D M Sunday, 26 October 2008 14:12 posted by D M

    They didn't finger Rubin... Things that make you go hmmm!

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