Political Grandstanding: Wall Street Slams Goldman Sachs Hearings

April 28, 2010 — -- Professionals on Wall Street reacted to senators' dramatic grilling of Goldman Sachs executives with mild annoyance, although Tuesday's hearing may have scored some points with voters on Main Street.

"Grandstanding of the highest order," said Sean Gambino, a veteran Wall Street trader, referring to politicians' aggressive, nearly 11-hour questioning of execs including Goldman CEO Lloyd Blankfein and 31-year old executive director Fabrice Tourre. Gambino added that Sen. Carl Levin, who as chairman of the Permanent Subcommittee on Investigations led the hearings, "has zero fundamental understanding about how markets work."

Goldman Sachs Just Doing Its Job?

Similar reactions came from others involved in the finance industry, annoyed that politicians were trying to blame Goldman Sachs for simply performing its role as a market-making investment bank.

Kevin McPartland, senior analyst at TABB Group, a New York-based financial services research and advisory firm, said he didn't learn much new in the hearings.

"Congress and Wall Street don't see eye to eye," he said. "Institutional traders are smart, well-informed people, yet someone is on each side of every trade with an opposing view. If not then we wouldn't have capital markets."

Behind the Curtain at Goldman Money-Making Machine

In a few corners of the financial world, however, some dissenting opinions could be heard.

Keith McCullough, former hedge fund manager and owner of securities research firm Hedgeye in New Haven, Conn., says the scrutiny on Goldman Sachs may reveal some ugly truths.

"Goldman's conflicted and compromised money machine of an opaque past is finally going to be held accountable to one question: What is it that you do to make all that money?"

Senators in Washington seemed intent to find an answer to the same question with their examination, directed at seven former and current Goldman employees, including Blankfein, "Fabulous Fab" Tourre and C.F.O. David Vinair. Throughout, the men defended themselves against unyielding criticism that they exploited the U.S. housing bubble at the expense of unwitting clients.