Steven Friedman running the NY Fed while continuing to sit as Goldman’s co-chairman is a stunning conflict of interest – once Goldman converted to a bank holding company, thus coming under the Fed’s oversight jurisdiction. Friedman, almost of course, didn’t resign his seat on Goldman’s board, even temporarily acknowledging his fiduciary obligations as a Fed officer. He simply asked for and was granted a waiver of his explosive conflict of interest.

That waiver voided his need to make a quick divestiture of his Goldman stock. Instead, it allowed him to buy more, netting him that $3 million profit. As for his fiduciary obligation to the public and its government, fuggedaboutit. Making money is all that counts, no matter who gets hurt doing it. It’s the Enron Ethics Standard writ globally.

Thanks.

What makes Taibbi so effective here is that he is both funny and lethal.

So true.

In his Rolling Stone piece, on-line yesterday, Matt refers to Goldman as Wall Street’s “Bubble Mafia”. Instead of selling “protection”, running numbers or prostitutes, he claims that Goldman manufactures bubbles, sells investments in them to clients, then sells what it’s sold them “short”.

EOH, thanks so much for this post. I look forward to reading the article over the holiday weekend — anyone who’s been following masaccio’s posts or comments by you, Hugh, and some others around these parts started connecting these dots months ago.

Really looking forward to reading it.

This is an item from my Obama scandals list that touches on Goldman’s connections to government. There are of course many more.

65. Well this changes everything. Goldman Sachs the large predatory investment house often acts and is treated as if the US government is one of its subsidiaries. Hank Paulson, Bush’s last Treasury Secretary had been CEO and Chairman of the board there. He named one of his acolytes Neel Kashkari to run the TARP. He selected a Goldman board member Edward Liddy to run AIG when the government took that company over. The Chairman of the New York Fed was until May 7, 2009, Stephen Friedman who had been with Goldman since 1966. He resigned because he made $3 million buying Goldman stock on the insider knowledge his position at the Fed gave him. He remains on Goldman’s board where curiously his bio omits his time at the New York Fed. On January 27, 2009, William Dudley became President of the New York Fed taking over Timothy Geithner’s old job. He had been at Goldman for 21 years, its chief economist for 10. In 2007, Geithner hired him to head the Fed’s markets division and from there he moved on to the top spot. Meanwhile Geithner hired Mark Patterson as his chief of staff. Patterson was a chief lobbyist of Goldman until April 11, 2008. His hiring by Geithner violated Obama’s pledge to prohibit former lobbyists in his Administration from working in areas on which they had lobbied in the previous 2 years.