Listening to the Senate hearings on the alleged sins of Goldman Sachs (NYSE: GS), one can be forgiven for thinking that Goldman Sachs is primarily a trading outfit. Obviously, they do quite a bit of investment banking business, and we wondered lately what the banking side of the firm--and some of the older Goldman Sachs alums who worked there in a different era--feel about the new Goldman Sachs.

But there are those who believe that the firm has been exposed: That the narrow mentality of CEO Lloyd Blankfein (Lloyd Blankfein news) and other top executives reflects the trading world and little else, that as a trading shop it is no different from any other, that the idea of valuing a client means something else for these guys. Certainly, they did themselves no favors before the Senators.

Georges Ugeux, chairman and CEO of Galileo Global Advisors, says this in the Huffington Post: "Lloyd Blankfein is a trader: He does not really know what is in his balance sheet, cannot articulate one sentence to express an idea and is totally unaware of the way his firm dealt with rating agencies. When Senators were asking them questions about 'selling' assets and 'shorting' Lloyd did not even realize that what they had in mind is the primary sale of new issues. That is why he did not answer the basic question: 'Does Goldman Sachs have any sense of the need to disclose that they purposely created instruments that collapsed after a few months and sold to their clients with the sole intention to short them?'"

The idea that Goldman Sachs is giant hedge fund (hedge fund news) is harder to scoff at now. One has to wonder if this is a turning point for the bank. Reputationally speaking, can it ever recover?

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