Ben Stein has an article in New York Times talking about Goldman Sachs. The article is mainly about two topics. The first is about the newsletter that Jan Hatzius wrote about the economic disaster. We discussed it here earlier in our blog. The second topic is about Goldman shorting many of the CDOs they were creating. He is comparing this to Henry Blodget and how he was pumping stocks that Merrill was dumping.
He disagrees with Mr. Hatzius's newsletter that there is a economic disaster looming ahead. He does not think the housing will go down 15 percent. He believes there will be government intervention, which the newsletter failed to recognize. The downturn in housing will lead to more CDO losses and the banks will be forced to curb lending.
He also insinuates that the newsletter may be to help Goldman with it's bearish bets.
It looks to me like Ben is missing the point. This housing is alot worse than he thinks. 15 percent is just the beginning. It's going to be alot worse than 15 percent. He seems to think the fed can fix everything. If the fed could fix everything, Citibank would not have gone begging to Middle Eastern countries for more capital. The size of this mess is enormous and unlike anything we have seen before.
To me, MSM and Wall Street sells more good news than bad news. We have seen this over and over again with Housing reports and how they make bad news into good news. If MSM and Wall Street were more negative, the housing and credit downturn would not have been this bad.
In the second part, he argues if selling the product and shorting them are as illegal. Goldman says it has disclosed everything it needs to.
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