The New York Times goes long on the conflict machine that is Goldman Sachs. It’s a devastating synthesis of what’s wrong about how the firm does business, with plenty of new information to serve as fodder for future investigations.

Gretchen Morgenson and Louise Story continue to push on the story line of the cultural changes that Goldman has gone through in the last decade, and how that’s resulted in the bank being on both sides of the ball. What once was an investment-banking culture that at least had a legitimate claim to putting its clients first, now is a trading culture:

It urges Goldman workers to embrace conflicts and argues that they are evidence of a healthy tension between the firm and its customers. If you are not embracing conflicts, the argument holds, you are not being aggressive enough in generating business.

The Times has some interesting news here: It’s got a hold of a 2007 training manual from Goldman’s mortgage department. Can anyone tell me why this is not insider trading (emphasis mine)?

In addition, the manual explains how Goldman uses information harvested from clients who discuss the market, indicate interest in securities or leave orders consisting of “pretrade information.” The manual notes that Goldman also can deploy information it receives from a wide range of other sources, including data providers, other brokerage firms and securities exchanges.

How does that play out? The Times explains via Goldman’s Timberwolf deal, a particularly toxic transaction that the firm sold to Bear Stearns shortly before shorting Bear’s stock:

Goldman, however, benefited from the problems its securities helped to create, Congressional documents show.

That’s about as succinct an explanation as you’ll get.

The Times also reports that Goldman pressured Thornburg Mortgage and AIG for collateral, saying “they were aware of transactions that were not broadly known on the Street.” And Goldman was aggressively taking down AIG by demanding collateral, while at the same time buying credit insurance that soared in value because Goldman was aggressively demanding AIG collateral. What a racket!

And of course:

Even as Goldman pressured Thornburg for cash, a Goldman banker pitched Thornburg to hire the firm to help it raise new funds. Thornburg turned elsewhere.

Morgenson and Story talk to a New Jersey legislator who is suspicious of Goldman’s doings:

A 59-page collection of trading ideas that Goldman put together in 2008, and which was reviewed by The New York Times, shows the firm recommending that customers buy insurance to protect themselves against a debt default by New Jersey. In addition to New Jersey, Goldman advocated placing bets against the debt of eight other states in the trading book. Goldman also underwrote debt for all but two of those states in 2008, according to Thomson Reuters.

Mr. Schaer complained to Mr. Blankfein in a letter in December 2008. A response came back from Kevin Willens, a managing director in Goldman’s public finance unit; he argued that Goldman maintained impermeable barriers between its unit that had helped New Jersey raise debt and another unit that was urging investors to bet against the state’s ability to repay that debt. Mr. Schaer replied that he doubted the barriers were impenetrable.

I’m glad the paper brings this up. The idea that these guys are separated by an “impermeable” Chinese wall is ludicrous. What you have here is a company trying to get folks to buy a state’s bonds with one hand and telling people to bet against it with the other hand. In other words, Goldman has to spit-shine New Jersey’s finances while Goldman is also talking them down. No wonder these guys speak with a forked tongue. It’s not their fault: They have multiple-personality disorder. That raises all sorts of concerns, not least of which is who gets told which piece of advice. Sorry to be cynical, but I suspect it’s the widows and orphans getting the former (buy!) and the John Paulsons getting the latter (short!).

If you believe in this Chinese wall, Goldman’s got an ancient Chinese counting device they’d like to sell you.

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