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For Some on Wall St., the Spectacle on TV Was Background Noise

Andrew Martin and Eric Dash|The New York Times
Wednesday, 28 Apr 2010 | 10:03 AM ET

Maybe it was the deepening debt crisis in Europe. Maybe it was the rare treat of a Mets-Dodgers doubleheader starting just before happy hour. Or maybe it was the lack of a “Holy cow” moment.

Whatever the reason, there seemed to be plenty to divert the attention of bankers and traders from the day’s scheduled distraction of the Goldman Sachs hearing in the Senate on Tuesday.

Daniel Sparks, former partner and head of the Mortgages Department at the Goldman Sachs Group, Joshua Birnbaum, former managing director of the structured products group trading for The Goldman Sachs Group, Michael Swenson, managing director of structured products group trading for The Goldman Sachs Group and Fabrice Tourre, executive director of the structured products group trading for The Goldman Sachs Group are sworn in while testifying before the Senate Homeland Security and Governmental Af
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Daniel Sparks, former partner and head of the Mortgages Department at the Goldman Sachs Group, Joshua Birnbaum, former managing director of the structured products group trading for The Goldman Sachs Group, Michael Swenson, managing director of structured products group trading for The Goldman Sachs Group and Fabrice Tourre, executive director of the structured products group trading for The Goldman Sachs Group are sworn in while testifying before the Senate Homeland Security and Governmental Af

“I’m watching it with just with passing interest,” Charles F. Gergel, a 48-year-old corporate lawyer, said during a lunchtime cigarette break near his office at 44 Wall Street. “I’m not glued to the TV.”

Of course, there were plenty of exceptions. Many on Wall Street could not talk on the record because of company policy, but said they were following the developments. A few said that they were closely monitoring the proceedings either because of their relationships with Goldman or the implications for the sector.

Interest in the hearing was said to be far more intense on mortgage trading desks — the business at the core of the Securities and Exchange Commission suit against Goldman and at the center of Congressional scrutiny of Wall Street.

Vikram Khanderia, 40, who was visiting from Deutsche Bank’s offices in India, said his colleagues were closely watching the hearings, fearing the federal government would take action against other banks.

Several bankers said that just as Mr. Tourre, the only Goldman employee named in the civil fraud suit filed this month by federal regulators, began his testimony to the Senate panel, news flashed that Standard & Poor’s had lowered the rating of Greek debt to junk status and had further downgraded Portugal’s creditworthiness.

At that moment, the debt crisis in Europe and its drag on the euro became a higher priority than listening for the correct pronunciation of Tourre (pronounced simply Tour).

From 11 a.m. to 1 p.m. on Tuesday, a period when trading volume usually dips as Wall Street takes lunch, trading of stocks in the Dow Jones industrial average actually rose slightly and remained steady for the remainder of the day.

“I haven’t been paying too much attention to it,” said Leon Chase, 41, an investment banker. “I can’t look at somebody else’s mistakes. I’m more focused on my own business.”

“I’m sure everyone is glued to the TV,” he said.

Others said they were keeping close tabs on the proceedings for their historical significance. Bob Sloan, a hedge fund risk management adviser at S3 Partners, said he was riveted by the television all day to watch what he described as a pivotal point for Wall Street.

Before the hearings, he said, bankers saw themselves as market makers who profited by bringing buyers and sellers together. Now, senators are calling on them to take on a higher responsibility. “Any time you try to change the standard of care, you change the way the Wall Street works,” he said.

Cable networks like CNBC and C-Span provided live beginning-to-end coverage of the Senate hearing, held by the Permanent Subcommittee on Investigations. But those testifying stuck close to their scripts, and speakers on both sides seemed to talk past one another, making for low drama.

Some moments were moderately buzzworthy by the standards of the Internet age. The committee chairman, Carl Levin of Michigan, used a profane turn of phrase 11 times in four minutes, quoting from an internal Goldman e-mail message, while questioning Daniel Sparks, the former head of Goldman’s mortgage department.

Blankfein & Faber
CNBC's David Faber discusses the SEC investigation of Goldman Sachs as well as the day's testimony, with Lloyd Blankfein, Goldman Sachs CEO, and CNBC's Larry Kudlow, Tyler Mathisen & Melissa Lee.

That set the blogosphere ablaze, but by then Wall Street was just about finished yawning.

By the time Goldman’s chief executive, Lloyd C. Blankfein, took the microphone after the closing bell, traders were calling it a day just like any other, and some were filing into bars for happy hour.

Even then, their interest could easily be turned to other events. The flat-panel screens at bars like Harry’s, the Dubliner and the Stone Street Tavern were showing tournament soccer between Bolton and Plymouth and the first game of a doubleheader between the New York Mets and the Los Angeles Dodgers, made necessary by a rainout Monday.

At the Full Shilling on Pearl Street, a lawyer who would not give his name explained why he thought many people were not joining him as he watched a lone television displaying Mr. Blankfein on the hot seat.

“People don’t come to a bar to watch this kind of stuff,” he said.

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