Thanks to Andy for sending me this Rolling Stone link. It's a great summary of how Goldman has accumulated wealth over the years, but in particular it focuses on the way each time a gigantic wealth bubble bursts, everyone loses money except for Goldman Sachs.
What I find startling is how speculation completely supplants investment in all the bubbles. When you make any specific market into a shiny casino, where people in suits are walking out with money stuck to their feet like toilette paper, some blame has to be attributed to the suckers that see this and walk right into the Casino. At some point you have to count on money managers and investors to know whether they are signing papers to an investment, or whether they've just let everything ride on a spin of the roulette wheel.
I also found this lighter response to all the Goldman-haters out there by Michael Lewis. Enjoy your weekend reading.
What I find startling is how speculation completely supplants investment in all the bubbles. When you make any specific market into a shiny casino, where people in suits are walking out with money stuck to their feet like toilette paper, some blame has to be attributed to the suckers that see this and walk right into the Casino. At some point you have to count on money managers and investors to know whether they are signing papers to an investment, or whether they've just let everything ride on a spin of the roulette wheel.
I also found this lighter response to all the Goldman-haters out there by Michael Lewis. Enjoy your weekend reading.
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3 comments:
Please tell me that you don't buy into the agit-prop in that Rolling Stone article. It completely overstates Goldman Sachs' role in the many financial crises of the past century and propagates a very naive 'good vs. evil' view of the market and of banks.
Actually, I like the article because it outlines a history of bubbles in a concise, comparable way. Personally, I view articles like this as tools for learning.
The actual argument about Goldman being evil kind of lost it's weight when there was a 65 year gap between the first two bubbles. It's like they cut out the paragraph that said, "Then, Goldman and Sachs decided to play it cool for 65 years."
But the content is great. I tolerate the spin because sometimes you just need a vehicle to get the stuff out.
Having said that, the bitter sentiment towards Goldman is very real, and it probably extends to Wall Street in general. These firms are simply closer to the lawmakers in the US, and that provides them a distinct information advantage, the kind that spawns jealousy and hatred.
On another note, what's with magazines like rolling stone and vanity fair having really awesome financial articles? Is finance hip now? Because that would be great for me.
I take your point, but the main thing that annoys me about the article is the way that it places the onus on Goldmans. I think that's an incredibly naive way to explain to the non-finance savvy the history of financial bubbles. If you want a better explanation, you should pick up Niall Ferguson's 'The Ascent of Money'. Gripping reading.
And to answer your question, yes finance is hip (Who says hip? Hello, are you my dad?). It's cool to know what's been happening with your money and how the credit crunch affects you personally.
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