Ben Stein Befuddles Himself

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We’re kind of having a Ben Stein afternoon here at DealBreaker. We can’t seem to put his Sunday column down.
Earlier today we noted how his Sunday column rested on the nonsensical position that there was something unethical about shorting mortgage indexes while selling collateralized mortgage products. But the thing that seems to be getting the most attention around town is Stein’s sleazy smear against one of Goldman Sachs' leading economic analysts, Jan Hatzius. We want to talk about this but we can't even get straight what it is Stein is accusing Hatzuis of doing. (And we suspect Stein can't get it straight either.)
On the one hand, Stein points out that Goldman Sachs apparently sold collateralized mortgage products but—don’t try to follow this too closely or you’ll wind up stupider for having tried to think like Stein—one of it’s chief economists has said that the credit crunch may force banks, brokerages and hedge funds to cut lending by $2 trillion and trigger a recession.
“Doesn’t this bear some slight resemblance to Merrill selling tech stocks during the bubble while its analyst Henry Blodget was reportedly telling his friends what garbage they were?” Stein asks.
On the other hand, Ben Stein makes the opposite point: that Goldman’s chief economist is attempting to talk up a recession to help Goldman’s short positions.
“Here is my humble hypothesis, even after talking to Goldman: Is it possible that Dr. Hatzius’s paper was a device to help along the goal of success at bearish trades in this sector and in the market generally?” Stein asks. “His firm says his paper, like all of its economists’ work, was not written to support any larger short-trading strategy. But economists, like accountants, are artists. They have a tendency to paint what their patrons, who pay them, want to see.”
Goldman can’t win with Stein. If the sell credit products while shorting them he accuses them of being new-age stock pumpers. If they publish reports predicting dire consequences for the economy, he accuses them of creating fear to bolster their short positions.
Our humble hypothesis is that Stein has no idea what he’s saying. He can’t decide whether Goldman’s sin was selling products it doesn’t believe in or promoting a view of the credit markets it does believe in. His main column is a mess of innuendo and half thought out positions, mixed is misplaced populist bravado. It’s like he packed every nasty thing he could think of—without bother to actually think thought any of them—and then let them pour onto the pages of the New York Times, like so many clowns falling out of a tiny car.
Earlier on DealBreaker: Ben Stein's Crazed Attack On Goldman and Ben Stein's One Good Point.

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