10 ms·

Goldman Sachs: The Great American Bubble Machine (2009)

75 points by arbuge 9y ago

vermontdevil 9y ago
This was written in 2010.
- jaclaz 9y ago
  Actually written in 2009, last line: >This article originally appeared in the July 9-23, 2009 of Rolling Stone.
snarfy 9y ago
Please add (2010) to the title.
padseeker 9y ago
I knew as soon as I saw the title and that it was published in Rolling Stone that it was written by Matt Taibbi. He has a flair for the dramatic especially with anti-corporate perspective.
- supernumerary 9y ago
  It's interesting that 'vampire squid' stuck though. Also his work with Mark Ames in Moscow at 'The Exile' through the 90s was stellar and very funny to read.
  - AndrewOMartin 9y ago
    Great Bubble Machine somehow doesn't sound as intimidating as Giant Vampire Squid.
  - padseeker 9y ago
    Don't get me wrong - I enjoy Matt Taibbi's writing. I generally agree or am sympathetic to his perspective. I think Goldman Sachs has been bad for most Americans. However I think you need to take what he has to say with a grain of salt. I'm one of those liberals that won't take their own side in an argument. I like his writing and agree with its sentiment but I do think his writing is more editorial, rather than adhering to the ethics of journalism. It is in the same vein as Michael Moore. He has a perspective, and his content is more about validating his opinion as opposed to doing true investigative journalism.
rayiner 9y ago
So read the section that relates to the late 1990s tech boom: > The basic scam in the Internet Age is pretty easy even for the financially illiterate to grasp. Companies that weren't much more than potfueled ideas scrawled on napkins by uptoolate bongsmokers were taken public via IPOs, hyped in the media and sold to the public for mega-millions. It was as if banks like Goldman were wrapping ribbons around watermelons, tossing them out 50-story windows and opening the phones for bids. In this game you were a winner only if you took your money out before the melon hit the pavement. If you know something about that tech boom, you'll recognize this description as mostly (though not entirely) garbage. Given that, what gives you confidence in the rest of the article?
- titzer 9y ago
  Well, the text is gussied up and there is plenty of dramatic license, but there were hundreds, if not thousands of startups that fit that description. Have a look at the meteoric rise and fall of pets.com: https://en.wikipedia.org/wiki/Pets.com https://en.wikipedia.org/wiki/Pets.com For every high-profile one, there were dozens smaller ones that rose and fell on the same wave. That's not to say that all .com companies crashed and died in that mess, but there were plenty.
  - tptacek 9y ago
    The bar your argument needs to clear isn't whether there were lots of Internet companies fitting Taibbi's falling watermelon description, but rather whether there are any that Goldman underwrote. Pets.com was underwritten by Merrill (also, against the notion that Merrill was packaging any bongwater-fueled idea presented to them is the fact that Pets.com was majority-owned by Amazon.) The target of the article is Goldman, not '90s Internet companies.
    - microtherion 9y ago
      Goldman underwrote a lot of companies, if anybody wants to dig through the whole list: http://www.nasdaq.com/markets/ipos/offering-history.aspx?expert=goldman%2c+sachs+%26+co&page=24 http://www.nasdaq.com/markets/ipos/offering-history.aspx?exp... The first name I saw that IMHO would qualify as a watermelon was Etoys Inc.
paulpauper 9y ago
Then why did Goldman's stock and earnings fall so much in 2008? if they engineered all these bubbles obv they would have had the foresight to be unscathed during crisis, which they weren't. There is no conspiracy. Hedge funds where the ones bidding the prices higher and many lost money on the way down. Goldman does not single-handedly control the market.
- sabujp 9y ago
  i still wonder what gs did with their tsla positions before they released their $180 target price
- camelite 9y ago
  > f they engineered all these bubbles obv they would have had the foresight to be unscathed during crisis They did't need any foresight to predict that their bonus money would remain ing their bank accounts no matter what happened. And for that matter, that whatever DID happen, the the US Government would move heaven and hell to avoid Goldman collapsing.
- calafrax 9y ago
  > There is no conspiracy Aren't corporations, by definition, a conspiracy to make money? Conspiring to make money is what an investment bank exists to do. It would be dereliction of duty if they weren't conspiring to make money.
CharlesDodgson 9y ago
hmm.... anyone want to buy some Snap shares?
sidcool 9y ago
I recently watched the documentary Inside Job. It's on the 2008/09 financial crisis. It quite convincingly alleges Goldman and Citibank of creating a bubble and betting on it. A recommended watch.
daxfohl 9y ago
Well bitcoin et al seem to be the bubble machine of the day. I wonder if Goldman has managed to get a foothold into rigging that market as well, given that the whole premise of those markets is decentralization, anti-fiat, anti-rigging.

75 points by arbuge 9y ago

vermontdevil 9y ago

This was written in 2010.

jaclaz 9y ago
Actually written in 2009, last line: >This article originally appeared in the July 9-23, 2009 of Rolling Stone.

snarfy 9y ago

Please add (2010) to the title.

padseeker 9y ago

I knew as soon as I saw the title and that it was published in Rolling Stone that it was written by Matt Taibbi. He has a flair for the dramatic especially with anti-corporate perspective.

supernumerary 9y ago
It's interesting that 'vampire squid' stuck though. Also his work with Mark Ames in Moscow at 'The Exile' through the 90s was stellar and very funny to read.
- AndrewOMartin 9y ago
  Great Bubble Machine somehow doesn't sound as intimidating as Giant Vampire Squid.
- padseeker 9y ago
  Don't get me wrong - I enjoy Matt Taibbi's writing. I generally agree or am sympathetic to his perspective. I think Goldman Sachs has been bad for most Americans. However I think you need to take what he has to say with a grain of salt. I'm one of those liberals that won't take their own side in an argument. I like his writing and agree with its sentiment but I do think his writing is more editorial, rather than adhering to the ethics of journalism. It is in the same vein as Michael Moore. He has a perspective, and his content is more about validating his opinion as opposed to doing true investigative journalism.

rayiner 9y ago

So read the section that relates to the late 1990s tech boom: > The basic scam in the Internet Age is pretty easy even for the financially illiterate to grasp. Companies that weren't much more than potfueled ideas scrawled on napkins by uptoolate bongsmokers were taken public via IPOs, hyped in the media and sold to the public for mega-millions. It was as if banks like Goldman were wrapping ribbons around watermelons, tossing them out 50-story windows and opening the phones for bids. In this game you were a winner only if you took your money out before the melon hit the pavement. If you know something about that tech boom, you'll recognize this description as mostly (though not entirely) garbage. Given that, what gives you confidence in the rest of the article?

titzer 9y ago
Well, the text is gussied up and there is plenty of dramatic license, but there were hundreds, if not thousands of startups that fit that description. Have a look at the meteoric rise and fall of pets.com: https://en.wikipedia.org/wiki/Pets.com https://en.wikipedia.org/wiki/Pets.com For every high-profile one, there were dozens smaller ones that rose and fell on the same wave. That's not to say that all .com companies crashed and died in that mess, but there were plenty.
- tptacek 9y ago
  The bar your argument needs to clear isn't whether there were lots of Internet companies fitting Taibbi's falling watermelon description, but rather whether there are any that Goldman underwrote. Pets.com was underwritten by Merrill (also, against the notion that Merrill was packaging any bongwater-fueled idea presented to them is the fact that Pets.com was majority-owned by Amazon.) The target of the article is Goldman, not '90s Internet companies.
  - microtherion 9y ago
    Goldman underwrote a lot of companies, if anybody wants to dig through the whole list: http://www.nasdaq.com/markets/ipos/offering-history.aspx?expert=goldman%2c+sachs+%26+co&page=24 http://www.nasdaq.com/markets/ipos/offering-history.aspx?exp... The first name I saw that IMHO would qualify as a watermelon was Etoys Inc.

paulpauper 9y ago

Then why did Goldman's stock and earnings fall so much in 2008? if they engineered all these bubbles obv they would have had the foresight to be unscathed during crisis, which they weren't. There is no conspiracy. Hedge funds where the ones bidding the prices higher and many lost money on the way down. Goldman does not single-handedly control the market.

sabujp 9y ago
i still wonder what gs did with their tsla positions before they released their $180 target price
camelite 9y ago
> f they engineered all these bubbles obv they would have had the foresight to be unscathed during crisis They did't need any foresight to predict that their bonus money would remain ing their bank accounts no matter what happened. And for that matter, that whatever DID happen, the the US Government would move heaven and hell to avoid Goldman collapsing.
calafrax 9y ago
> There is no conspiracy Aren't corporations, by definition, a conspiracy to make money? Conspiring to make money is what an investment bank exists to do. It would be dereliction of duty if they weren't conspiring to make money.

CharlesDodgson 9y ago

hmm.... anyone want to buy some Snap shares?

sidcool 9y ago

I recently watched the documentary Inside Job. It's on the 2008/09 financial crisis. It quite convincingly alleges Goldman and Citibank of creating a bubble and betting on it. A recommended watch.

daxfohl 9y ago

Well bitcoin et al seem to be the bubble machine of the day. I wonder if Goldman has managed to get a foothold into rigging that market as well, given that the whole premise of those markets is decentralization, anti-fiat, anti-rigging.