How Now This Honorable Man?

McClatchey newspapers, in a series of articles beginning last November, exposed the machinations of Goldman Sachs in packaging worthless mortgages as investments which it sold to clients even while taking a short position on them -- that is, betting that they would fail.

Fail they did. But Lloyd Blankfein, CEO of the investment bank that almost caused the entire U.S. economy to collapse, insists he and his cohorts did nothing wrong.

And Lloyd Blankfein is an honorable man.

In e-mails exchanged among executives at Goldman Sachs, the bankers crowed over their financial successes from betting against the housing market.

But Lloyd Blankfein will testify to Congress tomorrow (according to reports today based on his prepared remarks) that, "We didn't have a massive short against the housing market, and we certainly did not bet against our clients. Rather, we believe that we managed our risk as our shareholders and our regulators would expect."

And Lloyd Blankfein is an honorable man.

Earlier this month, the Securities and Exchange Commission filed a civil fraud case against Goldman, saying it misled investors about securities tied to home mortgages. Regardless of the outcome of the SEC's case, "Goldman Sachs has lost," said James Cox, a Duke University law professor and securities law expert. "It's lost in the arena of public opinion."

And Lloyd Blankfein is an honorable man.

Politicians in the U.K. and Germany are starting to call on their governments to cut ties with Goldman, which has long been one of the top financial advisers to European policy makers. In the United Kingdom, Liberal Democrat leader Nick Clegg, who leads the opinion polls less than three weeks before national elections, said on Tuesday that Goldman "should now be suspended in its role as one of the advisers to the government until these allegations are properly looked into." His comments follow Prime Minister Gordon Brown's recent characterization of Goldman's alleged behavior as "morally bankrupt."

And Lloyd Blankfein is an honorable man.

In Rolling Stone magazine, mild-mannered reporter Matt Taibbi characterized Goldman Sachs as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."

And Lloyd Blankfein is an honorable man.

When he goes before the Senate Permanent Committee on Investigations tomorrow, Blankfein will say that the young trader charged with securities fraud for failing to disclose alleged conflicts of interest when he sold a portfolio of toxic mortgages to investors “showed poor judgment,” but also that the company didn’t fire him because he did nothing illegal. The trader, Fabrice Tourre, is accused of misleading customers into buying a pool of collateralized debt obligations — complex mortgage bonds that many consider the root cause of the economy's great collapse — by not revealing that the pool was largely assembled by a short seller betting that the investment would decline in value.

But Lloyd Blankfein is an honorable man.

Would that some modern-day Caesar cry Havoc, and loose the dogs of war upon this honorable man, and his honorable friends at Citibank, Bank of America, JPMorgan Chase and WellsFargo.

Goldman and the four Big Banks have assets of $8.1 trillion, equal to 59.7% of our entire gross domestic product.

No wonder the bastards own Congress and the rest of government. The purchase price was chump change for them.

But Lloyd Blankfein is an honorable man.