Goldman Sachs hearing: Is Senator Levin thick, or just being disingenuous?

As I follow the hearings today it is clear that Senator Levin and co. just do not understand how the financial markets work. No matter how Goldman Sachs CEO Lloyd Blankfein tried to explain the function of financial intermediaries in the markets Levin refused to listen or learn. Levin continually tried to argue that market makers like Goldman are abusing their customers just by trying to hedge their risk. Apparently he does not understand how hard it is for market makers to stay in business.

The history of the financial markets is littered with the bodies of failed market makers that could not manage their risk. Goldman itself barely survived the recent crisis. Apparently Levin wants market makers to go out of business. If so, I hope he has an idea for a new financial system in mind.

This should be troubling to anyone who is hoping we find the right way forward for financial reform. For those of us who think capitalism itself has deep problems, then the disconnect between New York and D.C. is a certain reminder of those problems.

1 thought on “Goldman Sachs hearing: Is Senator Levin thick, or just being disingenuous?”

  1. A Levin aide corrected Levin’s assertion that he had asked one of the Goldman officials a question, when in fact an aid asked the question, was followed by one of the coldest stares in recorded Senate history. Theatrical and truely absurd.

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