Will no one let Goldman Sachs enjoy their moment? After news of their record earnings (and hefty compensation packages) broke yesterday, today the Goldman backlash begins in earnest, proving you can be too successful, too rich, and too pretty. "How long can Goldman keep it up?" Andrew Ross Sorkin asks on the TimesDealBook blog. Meanwhile in the business section, Jenny Anderson uses Goldman CFO David Viniar's remark yesterday about being "cautious" in the short term to go all negative Nancy. "For now, Goldman and its employees have much to celebrate," she writes, going on to quote an analyst saying the bank can't possibly do another "Houdini hedge escape" next year. That's riiight. It's never to early to worry about your future! Thanks, mom!
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If you haven't yet read the 500,000 articles saying as much, Goldman Sachs is having a bang-up year. They bet against the subprime market and won, they reported record profits today, and even though year-end bonuses are expected to be (relatively) small across Wall Street, Goldman employees are expected to rake in an average of $600,000 each. "They're the top of the heap," Harvard Business School professor Samuel Hayes tells Reuters. "Their success is eye-popping. Their latest record earnings in the face of big losses taken by most of the other investment banks is impressive in itself." And yet. Something feels wrong. To paraphrase the words of sage Britney Spears: Goldman is so lucky, they're a star, but they cry, cry, cry in their lonely hearts. Why do these tears come at night? Because with success has come scrutiny, not just from columnists like Ben Stein and the Post's John Crudele, but from Chris Dodd and the SEC. Why are these meanies trying to undermine Goldman's success? They're jealous. "It inspires a lot of envy," Hayes told Reuters. "There's a lot of resentment." But is that really all it is? We've heard this story before, and we know how it ends: The world is spinning, and Goldman keeps on winning. But tell us what happens when it stops?
Goldman Success Brings Unwanted Attention [Reuters]
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This morning, we told you about the various reactions in the blogosphere to Ben Stein's column in the Times business section this weekend, about what he perceived as opportunistic fear-mongering at Goldman Sachs. The piece, which included a dig at "economic journalists and commentators who sell newsprint by selling fear," touched a nerve with a few journalists, among them Stein's New York Times stablemate Paul Krugman, whose current column announces that the financial crisis is "back with a vengeance" and heralding the "breakdown of our modern-day banking system." Like a mean girl on MySpace, Krugman wrote a narky snippet about Stein's piece on his Times blog, but Stein says the sticks and stones cannot break his bones. "It is hardly to be expected that I could question an institution as powerful as Goldman Sachs and not get some response," Stein told Daily Intel. "As to Paul Krugman, I don't like to deal with people so full of hate. His recent piece on [Milton] Friedman [in the New York Review of Books] was so thoroughly debunked by Anna Schwartz that I would well imagine he's not happy." To make matters more interesting, Stein's piece and Krugman's column have been duking it out on the Times Most-Emailed list all morning long. At the time of this writing, Krugman is at three, and Stein is at four. Who will win the battle of the economist nerds? "It's Christmastime," Stein tells us beatifically. "I wish everyone peace."
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Er, maybe Ben Stein should stick to giving models math quizzes? After his op-ed on Goldman Sachs appeared in Times yesterday, his colleagues in economics seem rather determined to push him off the playground. In the piece, which appeared on the front page of the business section, Stein dismissed a report from current Wall Street golden child Goldman Sachs, in which Goldman economist Jan Hatzius postulates the subprime mess will affect lending so much, home prices will drop by 15 percent, making way for the economy to stagnate, if not completely collapse. Stein's argument was that this is unlikely to happen, because the Fed would step in and give lenders liquidity. Then he took his skepticism one step further, alleging that Hatzius, guided by the "invisible government of Goldman," was "selling fear" in order to promote the bank's trading policies, which include collaterized mortgage obligations, and that they should probably be investigated for less-than-sterling conduct. In response, the Internet went bananas.
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strong>Albrecht Moving Toward Sex Onscreen?: Deposed HBO head Chris Albrecht is reportedly working behind the scenes to get a Sex and the City movie produced. Cast is ready, creator Michael Patrick King is ready, and Albrecht is assembling distributors. Albrecht will also appear in a cameo as "Abusive Guy in Casino." [Variety]