Goldman vs. Capitol Hill: Like fighting with your mailman about the cost of gas

A few things are clear after the Goldman/Capitol Hill showdown today:

Goldman is greedy and sees no issue with bringing together parties betting on contrary positions on a given security; the firm may or may not bet one way or the other on those securities.  Um, obviously…that’s their job.

On the other hand, Goldman doesn’t really grasp why people are so pissed at them based on the perception that they participated in exacerbating the credit meltdown and foreclosure mess.  Well, fair enough- it’s not really their job to do so.

Ok, looking at the other camp: senators expressed outrage, on behalf of Main Street, that Goldman profited handsomely while betting against bundled mortgage securities that ultimately represented many doomed homeowners.  Ok: that’s their job to do so.

On the other hand, the senators showed a near embarrassing lack of understanding of the basics of what it means to bring two parties together who have different outlooks for a given financial security; they didn’t have a clue what it meant to be a market maker.  Understandable: that’s not their job.

See the issue here?  These two adversaries are each doing their respective jobs, but with little understanding of the other.  The senators might have just as well been grilling Goldman about having blocked fire exits, while Goldman was defending a policy of providing free dinners when employees work late.  The back and forth seemed completely incongruous.

Interesting that Goldman was one of only 3 financial stocks to rise today, even as the market as a whole fell about 2%.

Separately, one thing Goldman might want to be more aggressive about is policing its paid search results on Google.  Companies are bidding on their brand name and showing ads that are fairly humiliating.  Goldman can’t necessarily prevent this, but they should at least have the #1 search position themselves (currently they don’t show up at all) to make it either more expensive or impossible for the t-shirt companies to show up.

Check out the paid search ads on the right column. Not exactly what GS marketing/PR folks would hope for.