Where Lowenstein tells us this:

I wasn’t a fan of Goldman’s slickness in letting a short-seller design a collateralized debt obligation that Goldman marketed to clients, for which it was sanctioned by the Securities and Exchange Commission. However, its unsavory dealmaking should not obscure that in betting, correctly, against the housing market, it helped mitigate the crash. Had more firms done as Goldman and shorted mortgages, fewer unsound loans would have been issued.

Taibbi tells us this:

In the marketing materials for the Hudson deal, Goldman claimed that its interests were “aligned” with its clients because it bought a tiny, $6 million slice of the riskiest portion of the offering. But what it left out is that it had shorted the entire deal, to the tune of a $2 billion bet against its own clients. The bank, in fact, had specifically designed Hudson to reduce its exposure to the very types of mortgages it was selling — one of its creators, trading chief Michael Swenson, later bragged about the “extraordinary profits” he made shorting the housing market. All told, Goldman dumped $1.2 billion of its own crappy “cats and dogs” into the deal — and then told clients that the assets in Hudson had come not from its own inventory, but had been “sourced from the Street.”

Taibbi is much closer to the truth here. Lowenstein’s line that Goldman’s shorts “helped mitigate the crash” is one way to put it. It helped mitigate its own crash, certainly. But it exacerbated others’. Goldman was unloading toxic mortgage securities it had created right until the very end on unsuspecting investors, deceiving them about the firm’s role and interest in them.

And then there’s Timberwolf, the CDO-squared immortalized in a Goldman email as “one shitty deal”—one that internal documents show that the bank was scrambling to unload as it saw the end was nigh. Taibbi:

Goldman executives were so “worried” about holding this stuff, in fact, that they quickly sent directives to all of their salespeople, offering “ginormous” credits to anyone who could manage to find a dupe to take the Timberwolf All-Americans off their hands.

On Wall Street, directives issued from above are called “axes,” and Goldman’s upper management spent a great deal of the spring of 2007 “axing” Timberwolf. In a crucial conference call on May 20th that included Viniar, Sparks oversaw a PowerPoint presentation spelling out, in writing, that Goldman’s mortgage desk was “most concerned” about Timberwolf and another CDO-squared deal. In a later e-mail, he offered an even more dire assessment of such deals: “There is real market-meltdown potential.”

On May 22nd, two days after the conference call, Goldman sales rep George Maltezos urged the Australians at Basis (Capital) to hurry up and buy what the bank knew was a deadly investment, suggesting that the “return on invested capital for Basis is over 60 percent.”

Goldman hosed Basis for $100 million of Timberwolf, sent margin calls two weeks after that, and in two more weeks the fund was bankrupt.

The shadiness goes back further than 2007, of course. Wall Street provided the financing that was the lifeblood of predatory lenders like Ameriquest and Countrywide. In many cases, Wall Street was the predatory lender. Giant banks like Washington Mutual and Lehman Brothers cut out the middlemen, becoming one-stop shops of toxic slop. It’s hard to argue in the face of evidence from the likes of Clayton Holdings, that Wall Street didn’t know it was defrauding investors by repackaging fraudulent loans.

And Lehman, for one, had done it all before, in the 1990s:

The vice president, Eric Hibbert, wrote a memo describing First Alliance as a financial “sweat shop” specializing in “high pressure sales for people who are in a weak state.” At First Alliance, he said, employees leave their “ethics at the door.”

The big Wall Street investment bank decided First Alliance wasn’t breaking any laws. Lehman went on to lend the mortgage company roughly $500 million and helped sell more than $700 million in bonds backed by First Alliance customers’ loans. But First Alliance later collapsed. Lehman landed in court, where a federal jury found the firm helped First Alliance defraud customers.

But wait a minute: Why does this need to be explained to leading financial journalists?

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. Follow him on Twitter at @ryanchittum.