Stephen R. responded to yesterday's column:

"There is sometimes a difference between doing what is legal and what is ethical. Goldman Sachs seems to believe that you can do anything that is legal, even if unethical. Thus, they set up AIG to fail. They help Greece defraud the European Union. They sell products into the marketplace and then bet on them failing, when they knew they would fail in the real world.

At some point in time people recognize that they are dealing with unethical, immoral charlatans and they stop doing business with them. If you know your business associates are crooks, eventually you go somewhere else."

I couldn't agree more. And I also think it is clear why firms like Goldman continue to attract business. It's greed. I remember when the Bernie Madoff scandal broke. Some of his investors confessed that since his reported returns were so consistently above average, they figured he must be gaming the system. And that actually attracted them, because they wanted a piece of the action, too.

A similar dynamic is in play with Goldman Sachs. Of course, when you play with fire...

If you haven't read up on how Goldman helped Greece fudge its books to gain entry in the European Union, here's an op-ed piece from Bloomberg that describes it pretty well.

I have to admit, I disagree with the author's conclusion that Goldman "...is innocent in Greece's swap crimes."

This paragraph, in particular, is cause for concern:

"The trick Goldman Sachs employed to help Greece massage its debt figures hinged on using historical, rather than prevailing, currency rates in a series of swap transactions. While that undoubtedly comes under the heading of fast-and-loose, it's not illegal; swaps are over-the-counter contracts between consenting adults, so no matter how divorced the values are from reality, it really isn't anybody else's business."

As I write today's Daily Profit, the Dow Industrials is down 158 points. Part of the reason stocks are selling off is that investors are worried about the debt issues in Greece. I, for one, don't want to hear that swaps Goldman helped Greece employ isn't my business. When investment banks knowingly act in a way that destabilizes the global economy just to make a buck, it absolutely is my business.

As Stephen R. pointed out, sometimes there is a difference between legal and ethical.

Oh, and did you know the Fed is now investigating Goldman and other investment banks for using swaps to bet that Greece would default on its debt? It's like accepting payment to help a bank robber escape, and then calling the cops to report the robber's hideout and collect the reward.

There is an article at Slate.com making the rounds in the financial press. Warren Buffett's partner at Berkshire Hathaway, Charlie Munger, penned a parable about America's rise and fall, called "Basically, It's Over."

The article details how a young, fiscally responsible country called Basicland got caught up in the "casino" of speculation, ignored its export economy, and essentially went bankrupt.

While perhaps a bit simplistic, Munger's piece is intended as a warning about rising government debt and an over-reliance on risky financial speculation. This speculation is intended to make up for the lack of manufacturing as a major component of GDP.

Some of the statistics he throws out are a bit scary. He says "The winnings of the casinos (investment banks) eventually amounted to 25 percent of Basicland's GDP, while 22 percent of all employee earnings in Basicland were paid to persons employed by the casinos."

I haven't verified those numbers, but they certainly suggest an economy that's out of balance.

As I read Munger's article, I thought immediately of yesterday's story about how Goldman Sachs and other investment banks may knowingly used mortgage-backed securities and CDOs to set-up AIG.

I'm sure we all believe it is any company's right to take advantage of another company's weakness. At the same time, however, it seems to me that at some point, a company must ask itself "at what cost?"

In the case of the housing bubble, investment banks knew the mortgage-backed securities they were selling were junk. Not only did they set AIG up for a fall, these casinos, as Munger calls them, essentially cannibalized America to make a buck.

Munger's answer? Listen to Paul Volcker. Keep banking separate from investing. And "…produce and sell items that foreigner's [are] willing to buy."

Let's hope that our elected officials are not so ensnared in the casinos' tentacles that they can make the changes that America needs.