????It’s amazing what expensive messaging can buy. The first wave of publicity surrounding the SEC case against Goldman was fierce and damning. Now what we’re seeing is their Public Relations dollars at work. The conversation has shifted, have you noticed? What was huge, solid outrage against Goldman has moderated, and thoughtful (if bald) heads are prevailing.

????Of course Goldman took short positions against its long bets on the real estate market. Wasn’t that what it was supposed to do?

????The real problem isn’t shorting your own investment vehicles, the ones you sell to unwitting idiots who believe your upside drivel. It’s really just a matter of disclosure. You should disclose more.

????People who are uncomfortable with the whole process of free, unadulterated hedging are bad for America. America is about Freedom. God bless America.

????You can feel the debate turning. Narrowing. The animal is adjusting itself. Protecting all the tender, essential body parts that it wants to retain going forward. Preparing to shed its tail as a necessary sacrifice in the overall effort to save the actual lizard.

????Bah.

????What Goldman Sachs — and others, I am sure — did that got it in trouble with the SEC seems pretty simple to me. Correct me if I’m wrong. They invented an investment vehicle that was designed to fail spectacularly if the real estate market showed the slightest signs of weakness, signs that were already evident to those in touch with the early warning signals. It then sold that fund to people who believed in the gung-ho, positive view its sales people were still adopting. At the same time, it worked with the guys who designed the offending instrument to fail to bet against the very thing they were selling. They designed it to fail. It failed. They made a lot of money. They took about half of that revenue for their own compensation. They bragged about it, too.

????Know why they bragged about it? Because there’s nothing wrong, in the prevailing mind, with betting both for and against investments. In a horse race, insiders who bet against their own entrants are viewed with tremendous suspicion. Also boxing, that sweetest of corrupt sports. Well, perhaps not the sweetest. Maybe Wall Street is the sweetest.

????The PR effort is paying off, though. We’ve already got people seeing any attempt to control double-dealing as politically motivated. Why should it be looked at that way? Because casting issues in that fashion guarantees many long months of fruitless, pointless, aggravating, shallow, partisan debate. There’s an enormous, well-financed team executing that strategy right now.

????Ultimately, though, there will be some regulatory adjustments. Lizard Freres will shed its tail. It will agree to disclose a bit more carefully what it intends to do profit from your credulity.