Update: Worldwide financial collapse?

The Goldman Sachs Tower

Al-Jazeera has a thoughtful rebuttal to the trader in the video (which has now gone viral) and his claim that “Goldman rules the world.” It reports that former Goldman traders defend the financial system (are you surprised?) and attribute criminal and fraudulent acts to reckless individuals. The traders don’t, of course, have any problem with institutions that expose investors (other than themselves) to huge risk while they profit from both bull and bear markets. In Rolling Stone, Matt Taibbi takes a dim view of rogue traders and Goldman Sachs in particular.

A reader of Talking Points Memo argues that the US economy, rather than tanking, may profit from a crisis in the eurozone:

The result of the Euro crisis will be a stronger dollar which, while making a dent in our export competitiveness will also lead to cheaper oil and gasoline.  In addition as capital flees Europe it will be looking for stability and that means the US, not China or Japan at this time.  The result of that may be that the flood of new capital finally opens the gates and start-ups that have been having trouble finding investors (I know directly about this unfortunately) will get what they need. with the resultant bump in job creation.

Sounds good, but the writer is out of step with most economists. Nouriel Roubini, for example, who accurately predicted the bursting of the housing bubble and the worldwide recession, recently tweeted that the US, the eurozone and the UK are sinking into recession. The issue, he wrote, isn’t whether it’s a double dip, but rather whether the recession will be mild or severe with a new global financial crisis.

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