Goldman’s role in the sweeping global disaster that was the housing bubble is not hard to trace. Here again, the basic trick was a decline in underwriting standards, although in this case the standards weren’t in IPOs but in mortgages.
All right, I’m officially a fan of Matt Taibbi. And it’s issues precisely like this that are going to have me investing uber-conservatively, in annuities and other instruments where I can actually see the fine print before signing*, rather than having much of anything to do with stocks. If I hadn’t been working for a company that was blatantly letting loan applicants get away with murder while the underwriters were pretty much told “suck it up or you’re out of a job,” I’d have fallen for it, too.
*not that annuities are a panacea – they can also be full of fail. BUT, they tend to be unromantic and thus fly under the scam-radar.