Blankfein and the Stepford Bankers

Lloyd Blankfein could have hired any law firm, but he grabbed a firm that had strong ties to K Street. Makes sense when DC is coming after you. This particular law firm defended Bernie Ebbers at Worldcom. Ebbers is making little rocks out of big rocks right now. The most formidable adversary in a court battle is the government. They have unlimited resources and if they want you, they have a way of getting you. Lloyd picked his own firm here, but it will be on Goldman’s dime. $GS

I remember the Senate Sub Committee fiasco with Goldman $GS. I marveled at the cataloged one word answers by the empty suits in response to the inquiry. They were impeccably coached by their counsel before entering the room. If you don’ know the answer, say you don’t know the answer . If you don”t remember, just say you don’t remember. If you do know the answer keep it in a sound byte. They were flawless, bordering on arrogant.

The subcommittee didn’t get much that day, other than bankers boxes filled with information on sub prime mortgages and toxic derivatives. The thing with government inquiries, they don’t go away. Whether it’s the SEC or the gang from Capitol Hill. They request information, hide under a rock for a spell and then come back with guns blazing. That appears to be what is happening here.

This is common in a white collar investigation and we don’t know much at this juncture. Goldman’s stock was pounded into the close yesterday, but has settled in the pre-market.

Around the horn: In the “things that make your brain explode” category,  the head of S&P takes a walk and is replaced by the COO of Citibank. $C

Also this morning, McGraw Hill $MHP (owner of S&P)  is looking to break the company into four units.



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