Barry Ritholtz writes a superb post on the Goldman Sachs Abacus scandal. Wall Street loves complexity because it either tricks people or keeps them from scrutinizing it. Ritholtz makes a persuasive case for why the case isn’t that complicated after all in “10 Things You Don’t Know (or were misinformed) About the GS Case”:

1. This is a Weak Case: Actually, no — its a very strong case. Based upon what is in the SEC complaint, parts of the case are a slam dunk. The claim Paulson & Co. were long $200 million dollars when they were actually short is a material misrepresentation — that’s Rule 10b-5, and its a no brainer. The rest is gravy…

5. This was only one incident: The Market sure as hell doesn’t think so — it whacked 15% off of Goldman’s Market cap. The aggressive SEC posture, the huge reaction from Goldie, and the short term market verdict all suggest there is more coming.

If it were only this one case, and there was nothing else worrisome behind it, GS would have written a check and quietly settled this. Their reaction (some say over-reaction) belies that theory. I suspect this is a tip of the iceberg, with lots more problematic synthetics behind it…

8. The case looks thin: What we see in the complaint is the bare minimum the prosecutor has to reveal to make their case. What you don’t see are all the emails, depositions, interrogations, phone taps, etc. that the prosecutors know about and GS does not. During the litigation discovery process, this material slowly gets turned over (some is held back if there are other pending investigations into GS).

Read the whole thing and pass it on to your friends. This is one of those clear examples of what bloggers do better than the press.

My only quibble is that he passes along the Goldman spin that it lost $90 million on the deal. It didn’t. But he makes the case that the point is moot anyway, so it’s still useful.

— On the Internet privacy front, check out what Google “Don’t Be Evil” Incorporated is doing in Germany:

Google’s roving Street View spycam may blur your face, but it’s got your number. The Street View service is under fire in Germany for scanning private WLAN networks, and recording users’ unique Mac (Media Access Control) addresses, as the car trundles along.

In other words, it’s mapping wireless networks and can match your computer’s fingerprint with its maps—and pictures. That’s creepy. It’s hard to imagine that it’s only doing that in Germany. Is it doing it here?

Here’s Popular Science with some implications:

But perhaps the greatest objection is this: What is Google going to do with all that data? The intelligence community would love a means to cross reference MACs with locations and the people who reside there, so the fact that a foreign nation is wandering the streets of Europe gathering this data is understandably disconcerting from a security standpoint. It’s more likely Google wants to use that kind of data for targeted advertising or some such … did we say “targeted?” We meant highly-specific advertising. Now, give us the information we want.

All the more reason for much closer press scrutiny of these guys.

(h/t Edward Harrison)

The Wall Street Journal and New York Times both look at Wall Street’s biggest Democratic defender, Senator Chuck Schumer of New York. I’ll give this one to the Journal, which had me cringing (in a good way!) with some of its reporting (emphais mine):

Kathryn Wylde, president of the Partnership for New York City, an organization of business leaders, said that while there were plenty of complaints about Mr. Schumer’s role in the current debate, he is doing what he has to do, politically.

“He’s the strongest voice the industry has in Washington, and the industry depends on him to be their primary defender, which has not been an easy job the last two years,” she said.

And:

According to the nonpartisan Center for Responsive Politics, Mr. Schumer has received $1.5 million this election cycle from the securities and investment industry, more than double the second-biggest Senate recipient…

Many of those supporters are quietly questioning why Mr. Schumer is not defending them against what many executives see as an onslaught against their livelihoods.

Look out, Chuck. Jamie Dimon might yank that call center to Ohio, after all.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu.