I am a little disappointed. I've been grilled in three civil suits and learned how to grill and how to be grilled. You set up the case you want to prove, then you question the other side in a systematic fashion to paint the picture.
The committee or at least some on the committee have the picture, but don't seem that effective in getting it painted. I watched most of the Watergate hearings and they did the best I'd ever seen. This ain't Watergate, and it ain't even good power chair manufacturer liability.
The essential point is that Goldman designed frauds and got them rated triple A by nefarious means ranging from don't ask, don't tell, through lies and fraudulent representation. Goldman then sold these frauds to their customers. At the same time, since Goldman bet against their customer, they cashed in when their customers lost millions or billions or went broke on these fraudulent deals. So Goldman made money on the fraud at least twice. They made money once on the sale, and then again on the bet the deal was bad. This has a kind of inner beauty.
The way to show that is to pick a hand full of deals that harmed the customers. You trace a deal from start to finish, step by step. You find the documentation for each step. You present this documentation as an outline, then you present it to the witnesses, and then depose the witnesses on his or her own documentation and its misrepresentations. Next you demonstrate that these deals are a significant representative sample of typical deals. Wm. Black should have been working for the committee staff lawyers to design this series of hearings.
Levin does this to a limited extent, but not with enough systematic force. He uses the phrase conflict of interest or misleading. The proper phrase is fraudulent representation. Goldman calls these frauds, risk management and Goldman thinks that it does not have an obligation to disclose to its customers the fraudulent deal. Gee, you think?
Coburn works a different line, does Goldman have ethics standards? Coburn seems to work at cross purpose to Levin. Goldman interprets the word ethics to mean what's good for Goldman. They are then by definition, an ethical business. In this context, there is no such thing as a conflict of interest, much less fraud.
I am watching Levin go over and over with Blankfein selling a security without disclosing they were betting the deal short. Now McCain asked Blankfein an easy question, and Blankfein is so ready to obfuscate he can't answer a straight question. Let's recall at this point that McCain was part of the S&L fraud and was one of the Keating five.
Kaufman takes the Sen. Baker approach during Watergate, what did Goldman know and when did they know it. Blankfein suddenly becomes an outsider, who knew? Of course in retrospect we should have known, ...
McCaskill v. Blankfein is a fun watch. A later round between Tester v. Blankfein shows a different style. Tester gets back to the same point that Levin got to, except he takes his time. Blankfein comes back with the two role model, on the one hand, they have an obligation to the company, on the other they have an obligation to the customer. Tester notes, then if there is a two role model, that is in effect a conflict of interest.
The return match Levin v. Blankfein is another worth watching. We go over the same material, and get back the same Blankfein spin and obfuscation. Here is a weak media coverage with a transcript:
http://www.reuters.com/article/idUSTRE63R03320100428
The most significant feature of this transcript is that it ends with Blankfein, leaving off Levin's response, which was to dissemble Blankfein's non-answer.
Blankfein: ``The people who were coming to us for risk in the housing market, wanted to have a security that gave them exposure to the housing market, and that's what they got. The unfortunate thing... is that the housing market went south very quickly... and so people lost money in it. But the security itself delivered the specific exposure that the client wanted to have.''
I can't paraphrase this. I'll try. People are coming to Goldman to buy risk, that is to buy fraud, and gamble the fraud works? Goldman knows it won't work, or they wouldn't offer such a high rate of return and then bet against its success.
I am sorry, my mind just spins out... Senator Sam Ervin, old racist pig that he was, could translate this stuff, with his, `I am just an old country lawyer....' I can't. Let me try again... Goldman Sachs buys and sells fraud. If you come to Goldman, you bet Goldman frauds work and Goldman bets they don't.
Still lost...
CG