Blankfein Downgrades Goldman Sachs

No longer does Lloyd Blankfein consider what Goldman Sachs does as God's work. A downgrade has been made

In testimony today at the insider trading show trial of Raj Rajaratnam,  according to Bloomberg, he briefly shared his view of Goldman Sachs’s function.

Asked by the prosecutor about the bank’s business, Blankfein said, “We’re like a middleman.”


“It’s a service we do for the world,” the CEO testified.

He then changed the last two words to “our clients.”

According to Bloomberg, during 3 1/2 hours of testimony, Blankfein also said:

...he checks the firm’s “p-and-l,” or profit and loss, daily and relies mainly on voice mail. In times of market stress, he said he likes to have one-on-one conversations with board members. An e-mail shown to jurors referred to such talks as “just-checking-in-calls.”

Reading Habits

Even Blankfein’s reading habits were explored. Rajaratnam’s defense lawyer, John Dowd, asked Blankfein
 whether he was a daily reader of the Wall Street Journal.

“Sometimes I do,” Blankfein testified, before hurriedly adding, “Often I do. But not always.”

Most of his testimony, which concluded this afternoon, was devoted to his conversations with [former Board member Rajat] Gupta, 62. Blankfein told jurors he briefed his board on the bank’s losses in October 2008 -- the first losses ever, he said -- and the $5 billion investment in the bank by Warren Buffett’s Berkshire Hathaway Inc. at about the same time.

“Was it big news or small news for Goldman Sachs?” Michaelson asked.

“Big news,” Blankfein replied.

“Was the news confidential?” the prosecutor asked.

“Yes,” the CEO said.

Since this was a show trial limited to roasting a Sri Lankan, no questions were asked of Blankfein about his relationship with Treasury Secretary Paulson and why he thought Buffett had decided to invest in Goldman Sachs. No questions about Buffett's comment that he felt that through "code talk" Paulson was attempting to disuade him from investing in Lehman Bros. and why Paulson's "code talk" might have been different for Goldman. No questions were asked either as to whether Senator Dick Durbin was briefed on the Buffett investment in Goldman Sachs, about Durbins odd trading at that time and if Durbin fell under the same insider trading laws of the United States that were being used to roast the Sri Lankan.