You'd be forgiven for skipping part of a long New York Times story today about Goldman Sachs clients' increasing concerns: it's long, it's dry, and it doesn't yield its secrets easily to the lay reader. A few bloggers, though, have done the job for you. Buried within the countless stories of clients worried about Goldman's conflicted positions and borderline shady deals lies important insight, they think. Some bloggers argue that in the end, the story gives "devastating" documentation of Goldman's compromised relationships with clients.

• Piece 'Devastating,' declares Columbia Journalism Review's Ryan Chittum. He thinks it shows that "what once was an investment-banking culture that at least had a legitimate claim to putting its clients first, now is a trading culture." Furthermore, he highlights a section in which New York Times reporters Gretchen Morgenson and Louise Story summarize a Goldman training manual, which explains "how Goldman uses information harvested from clients who discuss the market, indicate interest in securities or leave orders consisting of 'pretrade information.'" Responds Chittum: "Can anyone tell me why this is not insider trading ... ?"

• Expert Here: This Stuff Is Pretty Damning  Yves Smith, finance blogger and former Goldman employee, translates the Times story for the general audience: it "chronicles how some of the firm's corporate clients are increasingly uncomfortable with how Goldman will use the information the firm gains from its business dealings (meaning its corporate finance relationships and underwritings, where the banker is expected to treat its customers as a relationship, not a trade) for its own profit, particularly to bet against the client. This would have been completely unthinkable when I was briefly at Goldman." She also says the examples of "less than savory" conduct here aren't the only ones she's heard of. Her conclusion:
  

While Goldman is a sufficiently embattled firm these days it is well nigh impossible for outsiders to get candid answers, the firm's conduct in the Senate hearings and some of Lloyd Blankfein’s star turns give the impression that the firm’s moral compass is so badly broken that its leadership and many of its employees genuinely thinks there is nothing questionable about this type of conduct. And if that is true, the firm is beyond redemption.

• How Is This Legal?  It's clear from this piece, writes business journalist Claudia Deutsch at True/Slant, that Goldman "knows whether WaMu ... holds too many mortgages in danger of going sour, it knows whether AIG is on the hook for too many CDOs and such, etc., etc." So she has almost the exact same question as Chittum: "someone explain to me why Goldman is not trading on insider information when it bets either with or against those clients' stocks or bonds or esoteric financial instruments?"

• You Should Read Goldman's Response, says Choire Sicha at The Awl. The firm publishes the questions the Times asked Goldman employees and the answers given, highlighting the highly selective snipping of answers. Sicha clearly feels that the Times piece and the Goldman response are odd, but says "there's at least one really great point made" in the Goldman response: Goldman tells the Times that shorting investments you've also gone long on is standard, sound risk management, and says "many institutions" that have "long exposure to Goldman Sachs" would be wise and not at all out of line to short Goldman as well.

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Heather Horn