In this report filed late yesterday, an anonymous economist at The Economist looks for deeper meaning in the fraud charges filed by the SEC against  Goldman Sachs while surely delighting in being able to quote Matt Taibbi and providing a handy link to the Rolling Stone article that puts this all into proper perspective.

The charges could hardly come at a worse time for Goldman. The firm has been under fire on a number of fronts, including over the handsome payout it secured from the New York Fed as a derivatives counterparty of American International Group, an insurer that almost failed in 2008. In a string of negative articles over the past year, Goldman has been accused of everything from double-dealing for its own advantage to planting its own people in the Treasury and other agencies to ensure that its interests were looked after. One profile memorably likened the firm to a “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

Goldman has continued to insist that it fared better than most of its rivals because of smart risk management, not because of any conflicts or duplicity. Its boss, Lloyd Blankfein, launched a vigorous defence of the firm’s practices in his recently published letter to shareholders.

But this week’s hammer-blow will unleash waves of Schadenfreude. Sceptics will say it confirms their suspicions that, for all the talk of helping its customers (Mr Blankfein used the words “client” or “clients” 56 times in his letter), Goldman puts its own interests, and those of favoured trading partners, first.
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Its rivals should not feel too smug. The SEC has been working hard to beef up enforcement. The case is the first to be brought by its new structured-products group. It will not be the last. On a call with reporters, Mr Khuzami (of the SEC) said the team was looking at other instruments, some of them no doubt structured by other firms. Goldman’s rivals have long been envious of its prowess. Some of them may soon be empathising with its plight.

You have to wonder how much Taibbi’s article influenced the SEC and you also have to wonder if election year politics are somehow involved – it seems that everything is political when there’s a vote looming less than six months away and unemployment is at 10 percent.