MONEY Customer Service

The Insulting Names That Businesses Call You Behind Your Back

150225_EM_WhatBusinessesCallYou
Lasse Kristensen—Shutterstock

Ever wonder how casinos, car dealerships, restaurants, pay TV providers, and online marketers refer to customers in private? The answers aren't pretty.

You may think you are a living, breathing, thinking, three-dimensional human being. To online marketers, however, you might just be classified as “waste.” That’s one of the revelations in a new report from the Annenberg School for Communication at the University of Pennsylvania.

“Many online marketers use algorithmic tools which automatically cluster people into groups with names like ‘target’ and ‘waste,'” the researchers explain. Those viewed as “targets” based on their personal data and online history are deemed worthy of retailer discounts and deals. On the other hand, because the majority of bankruptcies come as a result of medical expenses, “it is possible anyone visiting medical websites may be grouped into the ‘waste’ category and denied favorable offers.”

It’s insulting enough that your worthiness as a person and potential customer is being judged by some computer algorithm. And yet the words chosen for these groups we’re lumped into make this sifting process more impersonal and insulting still.

The study got us thinking about all the other disdainful, mocking, or otherwise insulting ways that companies have been known to refer to the paying customers and clients that, you know, keep these businesses in business. Even as you essentially pay the bills for these operations, you might be thought of as little more than …

Muppets
In 2012, the very public resignation of Greg Smith from Goldman Sachs revealed that the firm’s executives sometimes referred to clients as “muppets.” Apparently, in the U.K. the slang term is applied to someone who is ignorant or clueless and easily manipulated. In certain circles, an investor might also be dubbed an ostrich, pig, or sheep depending on if he, respectively, buries his head in the sand no matter what’s happening in the market, is overly greedy, or has no strategy and does whatever someone else tells him.

Bunnies, Grapes, Squirrels
Behind the scene at car dealerships, customers who are bad negotiators and easy for salespeople to push around and talk into deals are sometimes known as “bunnies” or “grapes,” presumably because they’re just waiting to be pounced on or squeezed, respectively. A “squirrel,” on the other hand, is a hated species of customer who hops from salesperson to salesperson with no sense of loyalty or thought to who should get the commission.

Dogs, Fish, Bait, Whales
These are all terms used in the world of gambling and casinos, and they generally refer to players who are losing or are likely to lose—to the house, but also to the shark sitting across the table. A “whale,” of course, is a high roller who bets big, and who therefore will probably lose big money at one time or another. For that matter, in the restaurant industry, “whales” are super-wealthy customers with so much money they don’t blink when running up bills into the tens of thousands at overpriced eateries where, for example, a Bud Light costs $11.

Campers, Rednecks
Also in the sphere of restaurants, these are two kinds of customers that seriously annoy the employees and owners. A group of “campers” camps out at their table for hours, eliminating the opportunity for a new party to run up a tab, while a “redneck” is another term for a cheapstake or stiff who doesn’t tip—perhaps because they’re not city folk and aren’t familiar with tipping etiquette.

The N Word
Some waitstaff not only refer to their customers using racial epithets, but they’re also dumb enough to put these derogatory terms in print on diners’ receipts. Examples have popped up in Pennsylvania, Texas, and Virginia, among other places. And yes, the incidents have resulted in lawsuits and people getting fired. On the flip side, some horrible restaurant customers have been known to leave insults (including the N word) instead of tips for their waiters.

Fat
Among the other popular, not particularly creative insults left on receipts is some variation of “fat”—“Fat Girls” and “Pink Fat Lady,” to name a couple specific examples.

The C Word
Yes, some angry Time Warner Cable customer service agent apparently went there, recently renaming a customer as “C*** Martinez” in a letter after she reported a problem with her service.

Assorted Expletives and Insults
The C word episode followed on the heels of multiple reports of agents at Comcast—Time Warner Cable’s equally hated pay TV competitor and would-be partner if the much-discussed merger ever takes place—renaming subscribers things like “A**hole,” “Whore,” “Dummy,” “Super B*tch,” and such. (Only whoever did the renaming at Comcast always used letters instead of asterisks.) There’s a good argument to be made that the absurd pricing and policies installed by pay TV providers are at the heart of why “customer service” agents so often hate subscribers, and why the feeling is mutual.

A Sad Person, a Hateful Mess
You’d think that New York Knicks owner James Dolan—a no-brainer to appear on a wide variety of Worst or Most Hated Owners in Sports in Sports roundups—would have developed a thick skin after years of criticism for astounding ineptness and mismanagement at the helm of one of sport’s most valuable franchises. But Dolan’s response to the recent criticism of one New Yorker who has been a fan of the team since 1952 shows otherwise.

“I am utterly embarrassed by your dealings with the Knicks,” the fan, Irving Bierman, wrote to Dolan, pleading with him to sell the team so that “fans can at least look forward to growing them in a positive direction.” Instead of taking the criticism constructively and thanking Bierman for watching the Knicks for 60+ years, Dolan responded via email by calling him “a sad person,” “a hateful mess,” “alcoholic maybe,” and likely “a negative force in everyone who comes in contact with you.” Dolan finished up the screed by telling Bierman to “start rooting for the Nets because the Knicks dont [sic] want you.”

While certainly extreme, Dolan’s message speaks to the disdain with which some sports owners and certain league executives seem to regard fans—who are supposed to root loyally and pay up for the product as a matter of blind faith, and never to question or criticize. For Dolan’s sake, let’s hope he never listens to sports talk radio. He probably wouldn’t like the ways that people refer to him.

MONEY Oil

Why Oil Prices May Not Recover Anytime Soon

A worker waits to connect a drill bit on Endeavor Energy Resources LP's Big Dog Drilling Rig 22 in the Permian basin outside of Midland, Texas, U.S., on Friday, Dec. 12, 2014.
Brittany Sowacke—Bloomberg via Getty Images

Things could get worse for the oil industry before they get better.

Oil prices have collapsed in stunning fashion in the past few months. The spot price of Brent crude reached $115 a barrel in June, and was above $100 a barrel as recently as September. Since then, it has plummeted to less than $50 a barrel.

Brent Crude Oil Spot Price Chart

There is a sharp split among energy experts about the future direction of oil prices. Saudi Prince Alwaleed bin Talal recently stated that oil prices could keep falling for quite a while and opined that $100 a barrel oil will never come back. Earlier this month, investment bank Goldman Sachs weighed in by slashing its short-term oil price target from $80 a barrel all the way to $42 a barrel.

But there are still plenty of optimists like billionaire T. Boone Pickens, who has vocally argued that oil will bounce back to $100 a barrel within 12 months-18 months. Pickens thinks that Saudi Arabia will eventually give in and cut production. However, this may be wishful thinking. Supply and demand fundamentals point to more lean times ahead for oil producers.

Oil supply is comfortably ahead of demand

The International Energy Agency assesses the state of the global oil market each month. Lately, it has been sounding the alarm about the continuing supply demand imbalance.

The IEA currently projects that supply will outstrip demand by more than 1 million barrels per day, or bpd, this quarter, and by nearly 1.5 million bpd in Q2 before falling in line with demand in the second half of the year, when oil demand is seasonally stronger.

That said, these projections are built on the assumption that OPEC production will total 30 million bpd: its official quota. However, OPEC production was 480,000 bpd above the quota in December. At that rate, the supply-and-demand gap could reach nearly 2 million bpd in Q2.

Theoretically, this gap between supply and demand could be closed either through reduced supply or increased demand. However, at the moment economic growth is slowing across much of the world. For oil demand to grow significantly, global GDP growth will have to speed up.

It would take several years for the process of lower energy prices helping economic growth and thereby stimulating higher oil demand to play out. Thus, supply cuts will be necessary if oil prices are to rebound in the next two years-three years.

Will OPEC cut production?

There are two potential ways that global oil production can be reduced. One possibility is that OPEC will cut production to prop up oil prices. The other possibility is that supply will fall into line with demand through market forces, with lower oil prices driving reductions in drilling activity in high-cost areas, leading to lower production.

OPEC is a wild card. A few individuals effectively control OPEC’s production activity, particularly because Saudi Arabia has historically borne the brunt of OPEC production cuts. Right now, the powers that be favor letting market forces work.

There’s always a chance that they will reconsider in the future. However, the strategic argument for Saudi Arabia maintaining its production level is fairly compelling. In fact, Saudi Arabia has already tried the opposite approach.

In the 1980s, as a surge in oil prices drove a similar uptick in non-OPEC drilling and a decline in oil consumption, Saudi Arabia tried to prop up oil prices. The results were disastrous. Saudi Arabia cut its production from more than 10 million bpd in 1980 to less than 2.5 million bpd by 1985 and still couldn’t keep prices up.

Other countries in OPEC could try to chip in with their own production cuts to take the burden off Saudi Arabia. However, the other members of OPEC have historically been unreliable when it comes to following production quotas. It’s unlikely that they would be more successful today.

The problem is that these countries face a “prisoner’s dilemma” situation. Collectively, it might be in their interest to cut production. But each individual country is better off cheating on the agreement in order to sell more oil at the prevailing price, no matter what the other countries do. With no good enforcement mechanisms, these agreements regularly break down.

Market forces: moving slowly

The other way that supply can be brought back into balance with demand is through market forces. Indeed, at least some shale oil production has a breakeven price of $70 a barrel-$80 a barrel or more.

This might make it seem that balance will be reasserted within a short time. However, there’s an important difference between accounting profit and cash earnings. Oil projects take time to execute, involving a significant amount of up-front capital spending. Only a portion of the total cost of a project is incurred at the time that a well is producing oil.

Capital spending that has already been incurred is a “sunk cost.” The cost of producing crude at a particular well might be $60 a barrel, but if the company spent half that money upfront, it might as well spend the other $30 a barrel to recover the oil if it can sell it for $45 a barrel-$50 a barrel.

Thus, investment in new projects drops off quickly when oil prices fall, but there is a significant lag before production starts to fall. Indeed, many drillers are desperate for cash flow and want to squeeze every ounce of oil out of their existing fields. Rail operator CSX recently confirmed that it expects crude-by-rail shipments from North Dakota to remain steady or even rise in 2015.

Indeed, during the week ending Jan. 9, U.S. oil production hit a new multi-decade high of 9.19 million bpd. By contrast, last June — when the price of crude was more than twice as high — U.S. oil production was less than 8.5 million bpd.

One final collapse?

In the long run — barring an unexpected intervention by OPEC — oil prices will stabilize around the marginal long-run cost of production (including the cost of capital spending). This level is almost certainly higher than the current price, but well below the $100 a barrel level that’s been common since 2011.

However, things could get worse for the oil industry before they get better. U.S. inventories of oil and refined products have been rising by about 10 million barrels a week recently. The global supply demand balance isn’t expected to improve until Q3, and it could worsen again in the first half of 2016 due to the typical seasonal drop in demand.

As a result, global oil storage capacity could become tight. Last month, the IEA found that U.S. petroleum storage capacity was only 60% full, but commercial crude oil inventory was at 75% of storage capacity.

This percentage could rise quickly when refiners begin to cut output in Q2 for the seasonal switch to summer gasoline blends. Traders have even begun booking supertankers as floating oil storage facilities, aiming to buy crude on the cheap today and sell it at a higher price this summer or next year.

If oil storage capacity becomes scarce later this year, oil prices will have to fall even further so that some existing oil fields become cash flow negative. That’s the only way to ensure an immediate drop in production (as opposed to a reduction in investment, which gradually impacts production).

Any such drop in oil prices will be a short-term phenomenon. At today’s prices, oil investment will not be sufficient to keep output up in 2016. Thus, T. Boone Pickens is probably right that oil prices will recover in the next 12 months-18 months, even if his prediction of $100 oil is too aggressive. But with oil storage capacity becoming scarcer by the day, it’s still too early to call a bottom for oil.

TIME Companies

Uber Hires Goldman Sachs to Raise Money From Bank Clients

German Court Bans Uber Service Nationwide
Adam Berry—Getty Images A woman uses the Uber app on an Samsung smartphone on Sept. 2, 2014 in Berlin.

Uber is hitting up high-net-worth bank clients for new money

On-demand ride company Uber has hired Goldman Sachs to raise money from the bank’s high-net-worth clients, Fortune has learned.

Goldman’s global wealth management team was informed of the deal this morning, and began sending out packets of information to their clients. All we know right now is that the offered securities are structured as convertible debt, and could raise hundreds of millions of dollars to support Uber’s balance sheet and international expansion efforts.

This offering is completely separate from a previously-reported fundraise targeted at institutional investors, which could raise more than $1 billion at around a $40 billion valuation. Given that Goldman clients would have fewer downside protections and information rights than would the institutional backers, this deal likely comes with a significantly lower valuation.

It is unclear what clients are being told about possible liquidity scenarios, given that they’ll be getting convertible notes for a company that is neither promising an IPO nor one that permits secondary trading of its stock. In the past, Goldman has managed similar fundraises for then-IPO candidates like Facebook.

To date, Uber has raised around $1.5 billion from firms like Benchmark, Fidelity Investments, First Round Capital, Lowercase Capital, Menlo Ventures, Google Ventures, TPG Capital, Summit Partners, Wellington Management, BlackRock and Kleiner Perkins Caufield & Byers. Goldman Sachs also is an existing investor.

An Uber spokeswoman declined to comment.

This article originally appeared on Fortune.com

MONEY Banking

2 Reasons to Chill Out About Huge Bank Profits—And 1 Reason to Get Angry

JP Morgan Chase, New York, NY
Mike Segar—Reuters

Little more than five years after the darkest point of the Great Recession, banks are again making record profits. Has the world no justice?

On Monday, the Wall Street Journal reported that banks earned more than $40.24 billion in the second quarter, the industry’s second highest quarterly profit in roughly a generation, just behind the $40.36 billion banks earned in early 2013. That may be infuriating to millions of Americans who lost their jobs and maybe even their homes in a recession due in no small part to Wall Street missteps, if not outright malfeasance.

But there are some reasons to take big bank profits in stride…even if they remain a long-term concern.

Other industries are also raking it in.

Record bank profits are making headlines. But that’s because Americans have developed such a disdain for bankers, not because bank profits are particularly extraordinary. In fact, corporate profits, which hit a record $1.7 trillion last year, are higher across the board.

Banks have certainly enjoyed their share of the pie. According to S&P Dow Jones Indices, financial services companies grabbed about 20.3% of all the profits posted by companies in the S&P 500 last quarter. At first blush a fifth of earnings may seem high. Indeed, financial services firms are the most profitable industry that S&P tracks, slightly ahead of technology, which contributes about 17.5% of S&P 500 profits. And unlike tech whizzes whose gadgets improve our lives, bankers don’t “make” anything.

But in the years leading up to the financial crisis, financial services accounted for a much bigger share of profits–at times more than 30%. In fact, today’s level is essentially in line with banks’ 20-year average of 20.2% of profits.

They’re making money on lending, not trading.

The other reason to feel relatively good about rising bank profits has to do with how banks are making that money. Monday’s Journal story emphasized that the jump in bank profits was tied to increased lending levels; commercial lending rose at an annualized 13% rate, while consumer lending climbed 6%.

That’s good news because lending is what we – even those among us who resent bankers – want banks to do. Lending helps businesses grow and helps consumers buy stuff, both of which ultimately help the overall economy. In fact the anti-banking crowd has been complaining that banks haven’t been doing enough lending. So they should take heart that that’s starting to change, even if it means banks are earning enviable profits in the process.

At the same time, the growth in lending contrasts with a still-tepid climate for another traditional profit line: trading. Placing bets–often with borrowed money–on different corners of the stock and bond markets was a huge profit engine for banks in the days before the financial crisis. But it made them riskier, and arguably had much less value for society than lending money directly to businesses. While the second quarter may have been good to banks overall, trading revenue at Wall Street’s biggest firms—Goldman Sachs Group Inc. GOLDMAN SACHS GROUP INC. GS -0.66% , JPMorgan Chase & Co. JP MORGAN CHASE & CO. JPM -0.32% , and Citigroup Inc. CITIGROUP INC. C -0.6% —fell 14%, according to Bloomberg, which called the result “the worst start to a year since the 2008 financial crisis.”

The trend has a lot to do with calm stock and bond markets. But don’t count out the effect of new regulations like the Volcker rule.

But lessons have not been learned.

Of course, even with some big caveats it can still seem pretty galling that an industry that received billions in government bailouts less than a decade ago is so wildly profitable, if not quite as wildly profitable as it once was. You may be even more irritated when you consider that banks achieved these profits despite paying more than $60 billion in settlements and penalties since the 2008, which suggests they ought to have been asked to pay even more for their contribution to the crisis. And that Wall Street pay has bounced back almost as quickly as profits.

Then there’s the disturbing fact that the “living wills” submitted by the country’s largest banks—blueprints for safely winding down their activities in the event of another financial crisis—were just last week deemed inadequate by the Federal Reserve and the Federal Deposit Insurance Corporation. In other words, the banks are still “too big to fail,” so taxpayers could again be left holding the bag if the animal spirits get out of control again—and record profits have a tendency to make that happen.

Ultimately, the return to business as usual may, as Fortune recently suggested, give more ammunition to those in Washington who are still calling for stricter banking rules. But given the strength of the business lobby in Washington, don’t expect any miracles.

 

 

 

MONEY stocks

Stock-Pickers Can’t Keep Up With the Aging Bull Market

Running of the bulls
Simon Greenwood—Getty Images/Lonely Planet Image

The big companies favored by mutual fund managers have substantially underperformed the S&P 500 index this year.

Even fund managers’ best ideas are not working out this year.

In one sign of the poor performance of stock picking by fund managers as the U.S. stock market continues to rally, the largest overweight positions by large-cap fund managers substantially underperformed the broad Standard & Poor’s index over the first half of the year, according to a Goldman Sachs research report.

Those stocks which were the most shunned, meanwhile, posted above-average returns.

Visa, the most overweight position among the 485 large-cap funds included in the Goldman Sachs study, is down 0.4% for the year, while Exxon Mobil, the most underweight, is up 1.1% over the same period.

Overall, well-loved stocks gained 6% on average for the year through June, while the S&P 500 gained 8% over the same time. The most underweight stocks, by comparison, rallied by an average of 10 percent, according to the report.

The underperformance of active fund managers comes at a time when stock pickers were expected to prosper. The aging bull market, which began in 2009, and falling stock market correlations after last year’s big rally were supposed to make 2014 a time when fund managers would be rewarded for picking companies based on their fundamentals.

Yet poor stock selection is one reason why just one in five actively managed large-cap stock funds are beating the S&P 500 for the year so far. Typically, about 40% of managers best the S&P 500 over the same period, said Todd Rosenbluth, director of fund research at S&P CapitalIQ.

“What funds need to do to outperform is find unloved stocks and get in front of it. If they hold the same stocks that other managers are overweighting, then it’s more likely that they are just going to tread water,” Rosenbluth said.

Underweight stocks’ performance this year seems to bear that out. Shares of Goodyear Tire & Rubber, the company with the largest underweighting among consumer discretionary stocks, is up nearly 16% for the year to date, while shares of Essex Property Trust, the most underweight financial company, have rallied 32%.

Other companies with significant underweighting include Apple, PepsiCo, and Ventas, according to the Goldman report.

The lack of a significant market pullback could be another reason for the underperformance, Rosenbluth added. The S&P 500 has not had a pullback of 10%, known as a correction, in three years. That has made it hard for managers who sold during last year’s 30% rally in the S&P 500 to find places to invest their cash, he said.

“Some managers were prudent and sold during the rally, and now they are left wondering what to do,” he said.

TIME Companies

Google’s Blocking an Email Because Goldman Sachs Asked It To

Goldman Sachs Google Email Mistake
Bloomberg/Getty Images Goldman Sachs Group Inc. signage is displayed on the floor of the New York Stock Exchange in New York, U.S.

Google is blocking a user's access after Goldman accidentally sent a confidential message to the wrong person

Google is blocking a Gmail user from accessing a confidential message that was accidentally sent by a Goldman Sachs contractor, a Goldman spokesperson told Reuters Wednesday. The email, which contained privileged client information, was sent to a “@gmail.com” address instead of “@gs.com.”

The email snafu, which occurred on June 23, may have resulted in a “needless and massive” breach of privacy, Goldman told Reuters, leading the company to ask Google to block the message. A Goldman spokeswoman said Google complied with the investment bank’s request.

The e-mail, however, has not been deleted, an act which would require a court order, according to Google’s “incident response team.” Goldman accordingly filed a complaint on Friday in a New York state court in Manhattan.

“Emergency relief is necessary to avoid the risk of inflicting a needless and massive privacy violation upon Goldman Sachs’ clients, and to avoid the risk of unnecessary reputational damage to Goldman Sachs,” the financial firm stated in the court documents.

The contractor had been testing changes to the bank’s internal processes, Goldman said. The bank did not confirm how many clients were affected.

[Reuters]

TIME Books

Goldman Sachs Elevator Tweeter Loses Book Deal

The man behind a popular and rather infamous Twitter account that entertained many in the finance world but infuriated top execs at Goldman Sachs has lost his book deal after it was discovered that the ex-banker had never actually worked at the firm

The man behind the popular Goldman Sachs Elevator Twitter account has lost his book deal after it was discovered that the ex-banker never actually worked at Goldman Sachs.

Touchstone, a division Simon & Schuster, canceled its contract with John LeFevre, who was planning to pen “Straight to Hell: True Tales of Deviance and Excess in the World of Investment Banking,” Business Insider reports.

LeFevre landed the book deal in January, but the New York Times reported shortly after that the infamous Twitter author was never actually employed by the bank. The 34-year-old former bond executive previously worked for Citi.

“In light of information that has recently come to our attention since acquiring John Lefevre’s STRAIGHT TO HELL, Touchstone has decided to cancel its publication of this work,” Simon & Schuster said in a statement.

LeFevre said he was puzzled by the decision. “It’s just a comical mystery to me,” he told Business Insider. “As of Friday afternoon, after all of the noise—during which Simon & Schuster prohibited me from responding and defending myself‚they have continued to support me and stand by our project. Well, until today apparently.”

[Business Insider]

TIME Apple

Apple and Goldman Sachs Are Getting a Little Tighter

The Apple logo is pictured at its flagship retail store in San Francisco
Robert Galbraith—Reuters

It's good to be friends

Goldman Sachs says it appointed Apple Chief Financial Officer Peter Oppenheimer as an independent director, expanding the size of its board to 13. Goldman Chairman and Chief Executive Lloyd C. Blankfein said in a statement Monday, that Oppenheimer’s “25 years of broad experience across important industries will add a valuable perspective to our board.” Before being named as Apple’s chief financial officer, Mr. Oppenheimer’s roles at the company included serving as corporate controller from 2002 to 2004.

TIME Denmark

How Goldman Sachs Helped Tear Denmark’s Government Apart

Danish Prime Minister Helle Thorning-Schmidt at a press conference on Jan. 30, 2014 at the Prime Minister's office in Copenhagen.
Keld Navntoft / AFP / Getty Images Danish Prime Minister Helle Thorning-Schmidt at a press conference on Jan. 30, 2014 at the Prime Minister's office in Copenhagen.

Controversial deal to partially privatize state energy company split Denmark's governing coalition

Danish Prime Minister Helle Thorning-Schmidt scraped together votes Thursday to partially privatize the country’s state-owned energy company, but the controversial deal has fractured her governing coalition.

The dispute over the deal prompted the Socialist People’s Party to quit the prime minister’s center-left coalition earlier in the day, Reuters reports. “It has been a dramatic 24 hours,” Socialist Party leader Annette Vilhelmsen said as she made the announcement. “We do not wish to be part of a government at all costs.”

The deal allows a group of investors headed by Goldman Sachs to buy an 18 percent stake of Dong Energy for $1.5 billion, as part of a broader restructuring that will cut the utility’s costs, reduce debt and increase energy investments, according to Bloomberg.

The sale proved especially divisive because of a provision that would give Goldman Sachs veto powers in key areas like management changes. It was opposed by 68 percent of Danes in a recent poll, and thousands of protesters assembled outside the Danish parliament building on Wednesday.

Vilhelmsen had expressed optimism Wednesday she could unite her party around the prime minister’s plan, but was unable to overcome a staunch opposition. Vilhelmsen also said she will be resigning as the party’s leader.

The withdrawal of the Socialist People’s Party from the governing coalition is a major blow for Thorning-Schmidt. She’ll hold on to power for now, since the Socialist party will continue to support the government from outside the coalition, according to Vilhelmsen.

But a poll released Friday indicates that 54 percent of Danes believe the prime minister has been weakened by the Socialists’ exit.

“The Goldman angle will be forgotten in a few weeks time,” Jens Hoff, a political science professor at University of Copenhagen told Bloomberg. “What remains will be that the Socialist People’s Party left the government.”

[Reuters]

MONEY

Is Goldman Too Big to Obey the Law?

In the wake of Friday’s civil fraud complaint filed against Goldman Sachs, the blogosphere has had all weekend to reflect upon the implications of the news. Here’s some of the best commentary:

  • “Wall Street has gotten a lot of mileage,” notes Ezra Klein, “out of the accusation that the political system simply doesn’t understand how Wall Street works. And that’s, well, correct. The problem is that Wall Street also doesn’t understand how Wall Street works.” [Ezra Klein]
  • It’s not just that banks have gotten too big to fail. As the Goldman case is making clear, they’ve gotten too big to obey the law. [The Baseline Scenario]
  • Reluctantly coming to Goldman’s defense, Jeff Matthews finds Exhibit A: Evidence that the bank’s alleged victims in this deal weren’t quite so innocent. Goldman, he writes, “did not, it would seem, drag them kicking and screaming. More like skipping and singing.” [Jeff Matthews Is Not Making This Up.]
  • Even so, there’s a real threat to Goldman here: All the additional dirty laundry that could be aired during this case’s discovery process. [Matthew Yglesias]
  • Finally, Barry Ritholtz comes up with a provocative baker’s dozen worth of questions that the SEC’s actions raise. Such as Question #11: “What does this mean for ‘Government Sachs’? Might GS see their privileged positions within Governments (US and others) curtailed?” Discuss. [The Big Picture]

Follow MONEY on Twitter at http://twitter.com/money.

Your browser is out of date. Please update your browser at http://update.microsoft.com