hardest working man in show business

The Breaking of Lucas Van Praag

The latest Times piece to simplistically yet convincingly paint Goldman Sachs as the evildoers of the financial crisis, by the now-regular team of Gretchen Morgenstern and Louise Story, airs the grievances of a small group of whingers who feel they were betrayed by the firm. It also tells another, smaller, story: that of the declining morale of the firm’s famously sharp-tongued spokesman Lucas van Praag. Whether it’s because he knows Morgenstern has her sights set on a Pulitzer Prize and she’s not going to let any “nuance” or “balance” screw that up — or because the thought of explaining once again that it’s not actually like Goldman Sachs does a deal with one hand and then turns around and shorts it with the other, because Goldman Sachs is not one dude, it’s a gigantic freaking company — mentally exhausts him, Van Praag has clearly given up. In an e-mail to the reporters, he fails to deliver a single intricately constructed barb in the Queen’s English and instead has settled for robotic, efficient rebuttals.

Below, his sad descent into dullness.

Van Praag on Goldman’s bets against Washington Mutual, a client: “Shorting stock or buying credit protection in order to manage exposures are typical tools to help a firm reduce its risk.”

On the fourteen principles delineated in the employee handbook, specifically a mysterious, unwritten “fifteenth principle” that encourages Goldman workers to “embrace conflicts and argues that they are evidence of a healthy tension between the firm and its customers”: “Mr. van Praag said the firm was “unaware” of this 15th principle, adding that “any business in any industry, has potential conflicts and we all have an obligation to manage them effectively.”

On Goldman’s refusal to redeem high interest-rate securities held by the University of Pittsburgh Medical Center: “Mr. van Praag, the Goldman spokesman, declined in his e-mail message to respond in detail to U.P.M.C.’s complaints, other than to say that a contract is a contract and that governed how Goldman interacted with the hospital.”

On a short position Goldman took on Bear Stearns, which itself was invested in Timberwolf, Goldman’s famed “shitty deal”: “Mr. van Praag, a Goldman spokesman, declined in the e-mail message to say how much the firm earned on those bets or whether they were still on when Bear finally collapsed.”

On the firm’s aggressive marking down of securities issued by Thornburg, a mortgage company to which it had lent money: “We are a ‘mark to market’ institution and we mark our positions on a daily basis to reflect what we believe is the current value for a security if we decided to sell it,” he said. “Those marks are verified by our controllers department, which is independent from the securities division.”

But wait! At the very end, the old spirit seems to return to him. “Subsequent events clearly indicated that our marks were accurate and realistic,” Mr. van Praag said.

That’s it, Lucas. Don’t go into the light!

Clients Worried About Goldman’s Many Hats [NYT]

The Breaking of Lucas Van Praag