The thing which struck me most about Goldman’s earnings call this morning was how guarded they were. For a company which has happily been talking to the press and leaking the letters it sent to the SEC, no one on the call seemed to want to talk candidly about the SEC lawsuit, the Abacus deal, or anything related to them: once the formal statement was over — which added nothing substantial to the press releases we’ve already seen — the Q&A elicited very little in the way of useful information.
Jim Surowiecki is right about one thing: the SEC/Goldman/Abacus story has, at its heart, a story of people who were looking backwards at what had happened in the past, and therefore couldn’t see in front of their noses what was just about to happen in the immediate future.
I’m still working my way through the two Goldman Sachs responses to the SEC, as posted by Alphaville — the 49-page September 10 memo, and the 20-page September 25 follow-up. But even without reading the whole thing, it’s easy to dismiss the section excerpted by Henry Blodget, which claims that the kind of disclosure the SEC was looking for “would provide a potential investor with no information the investor did not already know”.
Back in 2007, I embarked upon a doomed attempt to explain that asset bubbles were not necessarily speculative bubbles. There might be a bubble in the art world, I said, but it wasn’t speculative. And neither were home-price increases speculative in 2000, before the tech bubble had even burst. (Now that was a speculative bubble.)
Goldman Sachs has yet another statement out on the subject of the SEC charges against it, which adds little to the last two. But since Goldman is making such a big deal of it, let’s take a closer look at ACA’s “investment” in the Abacus deal.
The Climate Desk has launched! It’s an exciting collaboration, and I’m pleased to be a part of it. My piece is one of two complementary articles; the other comes from Clive Thompson, and explores a lot of the ways that companies are looking to profit from climate change. I, on the other hand, look at corporate attempts to mitigate the downside of climate change — and find them few and far between.