Complex Matters Seem Less So When Varney Explains Them

If anybody could decipher for Imus what is going on with Goldman Sachs, it was Stuart Varney, host of Fox Business Network’s Varney & Co., who dumbs things down on a daily basis.

“Goldman is accused of organizing a big trough of lousy mortgages, and then splitting them up and selling shares in this big trough to its clients around the world,” Varney said carefully.

What Goldman neglected to tell clients, however, was that those shares were bad, and they knew it. Working with a hedge fund, they reportedly organized a group of mortgages they knew would fail, and then the hedge fund bet against those investments.

They were, as Varney put it, “playing both sides of the fence.” Yet this outrageous deed that the SEC is accusing Goldman Sachs of doing was symptomatic of the way Wall Street did business in those days.

“We were all riding the wave of very, very cheap money, housing prices that kept on going up, Wall Street was making a fortune repackaging these mortgages and selling them to investors all the way around the world,” he said. “Everybody was making money, everything was fine, until the music stopped and those prices started to fall.”

Everybody except the end investors, that is. “Little towns in Norway lost their shirts on this,” Varney said. Wall Street, on the other hand, made a fortune.

While Imus was happy to compare Goldman Sachs to the Gambino crime family in its deviousness, Varney was less willing to do so, saying that what they did was less illegal than it was unethical.

“It would be fraud, if they did what the SEC says,” he said. “This is all legalistic stuff. It doesn’t matter—once the charge is laid, once the administration says, ‘You are a bunch of frauds,’ it’s a political issue.”

News that the SEC Commission split the vote 3-2 to enforce the case against Goldman was surprising to Varney, mostly because disclosure of such information is rare.

“A split decision on an issue like this is a very big deal,” he concluded, but couldn’t answer Imus’s question of whether the vote had political implications.

President Obama will come to New York to speak to Wall Street on Thursday, “in full attack mode,” according to Varney. Not only is Obama rallying public opinion against Wall Street, but he’s doing it on their turf in the middle of a heated debate over whether big banks should be taxed and reformed.

Imus was shocked to learn that Varney, whose show goes on the air at 9:20am ET, arrives at Fox at 5:15am. Told that Varney’s task—explaining “complicated stuff” to a mass audience—was more difficult than the I-Man’s—listen to what Bernie, Lou, Charles, Warner, Dagen, Jenna, and Connell say—Imus had little argument.

“I don’t have to know anything,” he conceded. It’s a task he carries out well.

-Julie Kanfer