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But if Mr. Smith believes his experience at Goldman is something new, he doesn’t know history. In 1928, Goldman Sachs and Company created the Goldman Sachs Trading Corporation, which promptly went on a speculative binge, luring innocent investors along the way. In the Great Crash of 1929, Goldman’s investors lost their shirts but Goldman kept its hefty fees.

If Mr. Smith believes such disregard of investors is unique to Goldman, he doesn’t know the rest of Wall Street. In the late 1920s, National City Bank, which eventually would become Citigroup, repackaged bad Latin American debt as new securities which it then sold to investors no less gullible than Goldman Sachs’s. After the Great Crash of 1929, National City’s top executives helped themselves to the bank’s remaining assets as interest-free loans while their investors and depositors were left with pieces of paper worth a tiny fraction of what they paid for them.

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Despite that very good spin, Goldman Sachs lost $2 billion worth of market value as its shares fell 3.4 in trading over the course of the day ("oh man, some guy says Goldman Sachs is evil? I HAD NO IDEA" -- the market). Thankfully, one hero stands ready to defend Goldman Sachs from public scorn: New York City Mayor Michael Bloomberg.

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Entering: Jeffrey Verschleiser, former Bear Stearns executive and emblem of Wall Street excess and corruption, who will join Goldman as global head of mortgage trading.

Exiting: Greg Smith, executive director of Goldman Sachs’ U.S. equity derivatives business in Europe, the Middle East and Africa, who has resigned in protest of the company’s culture of toxic greed and published his reasons in a New York Times op-ed.

This tale of coming and going, and the public reaction, speaks volumes of the power of Goldman Sachs and the public rage over its ethical lapses.

Which will speak louder? The answer will serve as a barometer to how far America has come in challenging a destructive financial system.

The Devil’s Work

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Occupy the SEC held the march to celebrate the release of its 325-page comment letter to the SEC calling for it to strengthen – and then, more important, enforce – the Volcker Rule, which will go into effect on July 21, 2012. According to Aaron Bornstein, who helped organize the march, Occupy the SEC’s comment is about twice the size of the next longest letter, drafted by the Securities Industry and Financial Markets Association, a financial interest lobbying group.

The working group's detailed policy position gives lie to the common claim that the Occupy Wall Street movement is "well intentioned but misinformed." It shows there's room in the movement both for policy wonks and those chanting "anti-capitalista."

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Occupy’s first act, the Tent Phase, ended in early December, when city authorities raided its urban camp at Justin Herman Plaza near the Ferry Building. But even before the tents were removed, it had become clear that the movement needed both to develop new tactics and deepen its strategic vision.

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Investment banks were the driving force behind the structured finance products that provided a steady stream of funding for lenders originating high risk, poor quality loans and that magnified risk throughout the U.S. financial system. The investment banks that engineered, sold, traded, and profited from mortgage related structured finance products were a major cause of the financial crisis.

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John and I walked over with a couple of other media people.  He covered the Zuccotti Park eviction for Salon, live-tweets most of the OWS events in the city, and has gotten to know many of the independent journalists who document the movement.  We arrived at the designated area, which felt like an enormous common space in a mall.  The main floor was decorated with Christmas trees, festive lights and public tables and chairs, with a wide marble staircase leading up to a balcony that overlooked the space.

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It's a huge mess.

Some people have noticed that "student loan debt" comes up a lot among the Wall Street Occupiers and the members of the 99 percent movement. Often, older people, who either attended school when tuition was reasonable, or who didn't attend college at all in an era when a high school diploma was enough of a qualification for a stable, middle-class career, tend to think this is all the entitled whining of spoiled kids. They don't understand that these kids accepted a home mortgage worth of debt before they ever even had a regular income, based on phony promises, and that the debt is inescapable, regardless of life circumstances or ability to pay.

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According to Reuters:

Students managed to break into the hall of the Goldman Sachs building in the heart of Milan's financial district, a few steps away from La Scala opera house, police said.

The protests were quickly dispersed by police and security was restored to the elegant building, though red graffiti was daubed on its walls expressing anger at Italy's Prime Minister Silvio Berlusconi and proclaiming "Give us money."

The news comes fresh on the heels of reports that protesters in cities across Europe plan to launch their own versions of the Occupy Wall Street movement on Saturday.

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My initial response: Today is a good day to be Matt Taibbi.

Last June, Michael Hasting's stunning Rolling Stone article on General Stanley McChrystal ended that soldier's career. In December, one week after Jeff Goodell's blistering profile of Massey Energy CEO Don Blankenship appeared in the same magazine, the coal baron resigned.

Is it too much to hope that Matt Taibbi could complete the trifecta? Last week Rolling Stone published Taibbi's latest frontal assault on his favorite vampire squid, "The People vs. Goldman Sachs." Drawing heavily upon the 650-page report issued by Senator Carl Levin's Permanent Subcommittee on Investigations, "Wall Street and the Financial Crisis: Anatomy of a Financial Collapse," Taibbi made a powerful case for prosecuting the investment bank for fraud and its executives for perjury.

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In his new role, Gregg will be responsible for such nebulous duties as "providing strategic advice to the firm and its clients, and assisting in business development initiatives across the global franchise."

Goldman CEO Lloyd Blankfein, whose firm was upbraided by a Senate committee only one month ago for perpetrating a massive fraud in the run-up to the financial crisis that some now believe warrants criminal charges, said of Gregg, "His experience and insight will contribute significantly to our firm and our continuing focus on supporting economic growth."

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On Sunday's "Your Money" on CNN, Taibbi pushes his point against Megan McArdle of the Atlantic Monthly. McArdle, described on CrooksAndLiars.com as a "Wall Street apologist" essentially suggests that we shouldn't prosecute the bankers, because convictions are too difficult to get and that they probably meant well really. Taibbi is, unsurprisingly, unconvinced:

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This is why I read Vanity Fair -- its ads provide a valuable glimpse into the palace. May's edition is no exception, thanks to Goldman Sachs -- aka the investment bank at the center of Wall Street's 2008 meltdown.

On Page 123 of the glossy mag, this very same bank presents itself as the savior of one of those Middle American cities whose averageness (and baseball bats) makes it synonymous with good ol' fashioned Americana: Louisville, Ky.

As Goldman's ad tells it, Louisville's major problem was its desperate need for a new arena. That's when the bank swooped in with a "financing strategy" to build the stadium, which then supposedly led to "a vibrant downtown scene, where new businesses are opening, existing businesses are expanding and local restaurants are hiring more employees."

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The Securities and Exchange Commission announced the civil charges against Rajat Gupta on Tuesday. The SEC said Gupta told Raj Rajaratnam, founder of the Galleon Group hedge fund, that Warren Buffett's Berkshire Hathaway planned to invest $5 billion in Goldman before it was publicly announced at the height of the financial crisis.

Gupta also is charged with giving Rajaratnam confidential earnings information from Goldman and Procter & Gamble. Gupta served on Goldman's board from 2006 until last May. He was a P&G board member from 2007 until resigning Tuesday, after the charges were announced.

Gupta was an investor in some of the Galleon hedge funds when he passed the information along, and he had other business interests with Rajaratnam, the SEC said. Rajaratnam used the information from Gupta to illegally profit in hedge fund trades, the SEC said.

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The Financial Times reports:

The Republican plan to slash government spending by $61 billion in 2011 could reduce US economic growth by 1.5 to 2 percentage points in the second and third quarters of the year, a Goldman Sachs economist has warned.

The note from Alec Phillips, a forecaster based in Washington, was seized in the ongoing US budget fight by Democrats as validating their argument that the legislation approved by the Republican-led House of Representatives last Saturday would do significant damage to the US recovery.

ABC News provides a lengthy excerpt from the confidential Goldman report, including an interesting passage about the fiscal impact of a government shutdown.

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Goldman Sachs Group Inc. earned $2.23 billion after paying preferred dividends in the last three months of the year, down from $4.79 billion in the same period year earlier. On a per-share basis, the earnings came out to $3.79 per share versus $8.20 per share.

Goldman's stock fell 3 percent in pre-market trading Wednesday.

The company rewarded its employees with $15.38 billion in salaries and bonuses, or 39.3 percent of its annual revenue, for 2010. The amount was 5 percent lower than 2009.

Revenue fell 10 percent to $8.64 billion.

Underwriting fell 12 percent, while financial advisory services fell 7 percent on lower mergers and acquisitions.

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This is a big deal for a few reasons.

First of all, Facebook is now a $50 billion company. (If you're trying to wrap your recession-blown mind around that much money, try to imagine about 11 million pounds of cash in dollar bills. Or maybe that's not so helpful ...) While some pundits think this sounds expensive, others are hardly shocked. The Atlantic's Nicholas Jackson points out that Facebook is now worth twice as much as Starbucks and with Goldman's support might follow the same path as Ralph Lauren, which increased in value 16-fold after the Wall Street behemoth invested.

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Meanwhile, Facebook gets the capital to keep buying talent and startups, and to fuel its expansion in all kinds of other ways -- and it gets to sell stock in what amounts to a shadow stock market that's growing faster than regulators seem willing or able to understand, much less deal with.

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