The smart set

I have no idea which (if any) trading rules were broken when traders at Goldman Sachs did not reveal who was short on a deal that Deutsche Bank and others chose to go long on.  I imagine that Goldman's customers have the option to sue and/or take their business elsewhere.

Politicians cannot be expected to miss an opportunity to grandstand.  But listening to the news suggests just how bad things are.  Making a profit, speculating, diversifying (in this case going short as well as long on various mortgage-backed securities) -- and profiting on that.  Can you imagine?  All these perfectly normal actions are subject to hand wringing and worse. Last night's Jim Lehrer News interview (Ray Suarez talking to Louise Story) is a case in point.

And these are the high-brow TV news.  Can someone from that perch please explain to the audience that firms are supposed to be profit-seeking, that everyone on Earth speculates, that the shorts are an essential part of the market, that firms will diversify their portfolios.  And that all of these actions are socially beneficial?  You can bet that all of the smart set encountered Econ 101 at some time in their lives.  What happened?