Populism And Volcker Saber Rattling Means Serious Trouble For Goldman Sachs

Link here.

None of Goldman's business model contributes to wealth creation in the American economy - something we have highlighted before. I'm not just talking about trading. I'm talking about all of their lines of business. And I am talking from a factual economic standpoint, not an opinion. In other words Goldman Sachs does nothing to increase the capital stock of society. One really needs to understand capital to appreciate what I am saying. The perception of wealth creation at Goldman Sachs is accomplished though the transfer of wealth. We have been on this bee line throughout all of 2009 when the entire world thought Goldman Sachs had won the war through its cozy relationship with lawmakers. (Not to mention we were bearish on Goldman before the market crashed.)

We are the only source talking about this but I can assure you it is very real and very serious for Goldman whether they yet realize it. (They probably don't. It's not really surprising since a lot of what we have talked about seemed irrelevant at the time we first posted it.)

If the populist movement gains substantial traction, and I have been anticipating it will for years, (and it will come to pass.) Goldman is going to be in very, very serious trouble as society clamps down on a vast array of destructive business practices. That goes well beyond trading. While it would be a very extreme outcome, as we wrote early in 2009, if Goldman does not successfully transform their business model, they could literally go the way of the Dodo bird. This sounds wildly implausible today but remember so did many of the other issues we have written about that are now starting to come to pass or already have.