Will legislation and stepped-up regulatory oversight ultimately shake up trading and banking careers as severely as Wall Street's wrenching restructuring of 2008-09 did? The answer may rest on the outcome of the SEC's sub-prime-CDO lawsuit against Goldman Sachs and any other civil or criminal actions that might spring from it.
Two events in recent days brought new, and sharply diverging, views on that question. First, prominent bank sector analyst Richard Bove of Rochdale Securities said Goldman's CEO and CFO should be forced out because of what he considers the bank's inept response to the SEC suit. But then superinvestor Warren Buffett, whose halo among the wider public was barely dimmed by the financial crisis, weighed in strongly behind Goldman's leadership and actions.
To be sure, Buffett's firm has a large investment in Goldman. Still, the line of thinking advanced by Buffett - and by another long-time Wall Street gadfly, hedge fund manager Bill Ackman - deserves to be considered on its own merits, says New York Times columnist Andrew Ross Sorkin.
If Buffett and Ackman are right that investors had no reason to expect Goldman as a market maker to disclose another client's position on the Abacus CDO deal at the heart of the case, Sorkin writes,
(It) makes you question all of the outrage being directed at Goldman over this transaction. "The country wants to hang somebody," one Berkshire board member told me.
With so many easy targets of the financial crisis - Fannie Mae, Freddie Mac, A.I.G., Bear Stearns, Lehman Brothers - it does seem odd that the government, and the public, has chosen to vilify one of only a couple of firms that made fewer mistakes than the rest.
From Buffett, Thought-Out Support for Goldman [NY Times]
Goldman Sachs's Senior Management Should Be Replaced, Bove Says [Bloomberg News]
Does taking the opposite side of Buffett on this 'trade' make the Rochdale Securities analyst bold - or just crazy?
Volcker Optimistic on Outlook for Derivatives Reform [CNBC]
Lloyd Blankfein's Bittersweet Journey [Daily Beast]
Little new information here, but worth a read if you haven't read any of the Blankfein and Goldman Sachs profiles on various news sites over the past year or so.
Congress Members Bet on Fall in Stocks [WSJ]
Voting Begins in Senate on Wall Street Reform [Reuters]
UBS Results Show Signs Of Recovery [FT]
Here's Who's Going To Get Taken To The Cleaners Over The Gulf Oil Spill [The Money Game]
Follow eFinancialCareers on Twitter: https://twitter.com/efcusnews