Evidence here

http://johnquiggin.com/index.php/archives/2009/07/26/sockpuppet-ban/

Obviously, each site has its own comments policy, but I’d suggest that in this case mine (immediate and permanent ban) is appropriate.

The day you present an actual argument, on anything at all, let’s worry about that, shall we?

Goldmans role in the financialization of America was similar to that of other players, except for one thing: Goldman didnt believe its own hype. Other banks invested heavily in the same toxic waste they were selling to the public at large. Goldman, famously, made a lot of money selling securities backed by subprime mortgages then made a lot more money by selling mortgage-backed securities short, just before their value crashed. All of this was perfectly legal, but the net effect was that Goldman made profits by playing the rest of us for suckers.

It was widely known that the house of cards would fall down, but no one ever knows exactly how high it will build before it does fall, nor exactly when. Like a game of musical chairs, timing is the key. The only way to get your timing perfect is to be the guy who yanks the card out from the bottom of the pile and triggers the collapse.

Conclusion: you want to be that guy.

then made a lot more money by selling mortgage-backed securities short, just before their value crashed. All of this was perfectly legal, but the net effect was that Goldman made profits by playing the rest of us for suckers.

Actually they didn’t, Nic. Overall they probably lost money, as net/net the prop book gained what they lost on the MBS/origination desk. It’s not only perfectly legal but also indicative of good management, as they allowed the prop traders to think freely and take reasonable latitude in terms of how they expressed their view/risk. It’s really not surprising that one section of the bank had a contrary position to another. Even single trading desks have traders with opposing positions and risk expressed that way. That how we worked and there was never anything unusual about that.

Goldman’s P&L looks good because they had far less write downs this quarter compared to the rest of the street. Take Bank of America that reported last night our time. They reported a profit of around $3.2 billion after massive write downs of around 8 billion. Normalized earnings for Bof would have been around $8 billion for the quarter. So looking at Goldman’s profit from that perspective doesn’t seem extraordinary.

The bottom line is that Goldmans blowout quarter is good news for Goldman and the people who work there. Its good news for financial superstars in general, whose paychecks are rapidly climbing back to precrisis levels. But its bad news for almost everyone else.

These large normalized earnings being reported on Wall street this quarter have a lot to do with advisory, recapitalization and bond issuance, which means the capital markets are thawing out. This is a good thing and it’s certainly not bad news for Main street as firms are being funded again. There was something like $300 billion new equity issuance this quarter alone which is terrific news. Of course banks make make on that…. around 3 to 6% on am equity issues and perhaps 1 to 2% on advisory.

THAT is your counter-argument? Oh dear.

Is this person the subject of some study?

I’m serious. Is there one?