David Brooks' New York Times op-ed column today on Tim Geithner (mentioning in the lead my Portfolio cover story) misses the point, I think.

The problem with Geithner's approach is not whether or not the banks are recovering because of the TARP program, but the degree to which the profits of the biggest banks have not been matched by a commensurate ability to lend.

Once upon a time I called Goldman Sachs (GS) to see if I could get cooperation for a story I was working on. Goldman was not the subject of the story, but played a role. The spokesperson's response was enjoyably candid: "What's in it for us?" The answer was no.

These people are sweethearts and always have been. It surprised me that Matt Taibbi's "vampire fish" article, flawed as it was, received such an unfavorable reception from the financial press, given the storied arrogance of this company.

Readers of this blog may find this article in Slate's The Big Money of interest, particularly the last part, in which I cite an academic study that debunks the theory that Bear Stearns and Lehman Brothers were brought down by naked shorting.

The study was based on "fails to deliver" data, which naked shorting conspiracy theorists have been using as a proxy for naked shorting.

Will wonders never cease?

This isn't likely to get much notice, but it's pretty big news: the SEC actually enforced one of the most crucial regulations preventing public companies from cooking the books, known as Regulation G. The agency reached a settlement yesterday with SafeNet Inc. and two former senior officers, for Reg. G and options backdating.

The 536 exhibits released by the SEC Inspector General late Friday on Bernie Madoff don't seem to contain any explosive new revelations, but underscore an essential point about SEC investigations: if you are the target of a probe, just lie, again and again.

The SEC won't check up, even if it's obvious.

Notes of Bernie Madoff's interview with the SEC inspector general were released on Friday, and they make fascinating reading--as long as you keep in mind that Madoff was lying through his teeth, primarily to protect people.

Here's the SEC exhibits page, and here (PDF) is the record of Madoff's interview.

It's still unclear how many former BusinessWeek editors will be hired by Bloomberg L.P., but one thing is increasingly clear: it could have been a hell of a lot worse. Peter Kafka describes the nightmare scenario: a purchase by private equity bloodhounds ZelnickMedia that would have been only marginally better than a simple shutdown of the magazine.

This is how one-sided the Zelnick offer would have been: McGraw-Hill (MHP) would have wound up paying Zelnick to take BW off its hands. In return, BW would have been ripped limb from limb, and the entire staff would have been laid off.

That was fast. Steve Adler's resignation from BusinessWeek was announced late Tuesday, and according to Keith Kelly it is likely to be followed by others. Kelly makes it seem as if the staff is in chaos, with one other top editor likely to go and the status of another unclear.

Bloomberg has a reputation for being no-nonsense in such matters--in contrast to McGraw-Hill (MHP), which kept the magazine's top masthead in stasis even as it drowned in red ink. Still, I was expecting a bit more of a transition period.

There is, or should be, a furor over a gent named Storch being named as the first chief operating officer of the SEC enforcement division.

No, not this Storch:

Bloomberg L.P. officially became the buyer of BusinessWeek today, as expected. Here's a memo to the BW staff by the soon-to-be-former owner, and here's a Bloomberg press release.

A few things are left unclear in the official pronouncements, and they're not minor:

Continuing the maddeningly inconsistent coverage of the sale of BusinessWeek, Reuters reported that McGraw-Hill (MHP) is "leaning heavily" toward selling BusinessWeek to Bloomberg.

Meanwhile, Keith Kelly reports in the New York Post that all is quiet on the Bloomberg front: ". . . the board has yet to meet to consider the Bloomberg offer or any other offer. The board is not expected to meet in the next few days."

The first issue, Sept. 7, 1929

Most publications would haul out all the trumpets for their 80th birthday, but BusinessWeek, ailing and for sale, has confined its trumpeting (so far, at least) to an online feature a couple of weeks ago. I think that's a shame.

The White House isn't the only building in Washington with a hotline

Patrick Byrne has a new conspiracy theory to explain why his corporate crime petri dish Overstock.com (OSTK) is under investigation by the SEC. Seems that short sellers, in addition to having a fax machine at CNBC, also have a hot line to the SEC, in which they bark out orders to start investigations against innocent CEOs like Byrne.

My old colleague Bruce Nussbaum, BusinessWeek's innovation guru, has an interesting blog post that is pretty much a first: a current BW staffer publicly engaging in soul-searching about the magazine's troubles, rather than just blaming it on the recession and exonerating the people who have been in charge for the past four years.

You have to go to the video to get Bruce's thoughts on this. He says:

I've chronicled in this blog how my alma mater BusinessWeek has been decimated in recent years, with layoffs that have ousted its most experienced writers and editors. That, combined with an ill-conceived redesign and other missteps, has hurt the magazine editorially and been a commercial flop.

Word emerged yesterday that McGraw-Hill (MHP), apparently to spiff up BW to make it more appealing to buyers, has a plan to decimate the staff even further. Following up on her article from Monday, Stephanie Clifford of the New York Times lays out plans on a Times blog to fire one-fifth of the staff.

The New York Times today has a sobering article that remedies a deficiency in coverage of BusinessWeek's recent troubles and pending sale. Rather than focusing on "suitors" and the broad numbers, Stephanie Clifford describes exactly how BW got in this mess. There's some disturbing stuff in this article.

I've long been impatient with the tendency to exonerate top management from responsibility for my alma mater's troubles, and to blame the whole thing on the economy. As the Times points out. BW's "share of the ad pages among competitors — Fortune, Forbes, Inc. and Fast Company — has fallen in the last six years."

Great news for my alma mater: According to Keith Kelly at the New York Post, Bloomberg L.P. has tossed its hat in the ring for BusinessWeek (MHP).

Until now, the outlook for BW was bleak. The only bidders on the horizon, except for Joe Mansueto, were private equity shops that would have unhesitatingly ripped the guts out of BW -- even more than its guts have been ripped out under its inept current management. Bloomberg might actually turn it into a viable magazine again.

Bloomberg reported the surprising news that BusinessWeek was drawing the interest of 93 potential buyers. The basis was a televised interview with the CEO, Terry McGraw.

Paid Content immediately tossed cold water on that, and Business Insider weighed in with a report saying that BusinessWeek morale is, surprise surprise, "dangerously low."

There was weeping and wailing and blubbering among inept CEOs across the land in recent days as a federal court judge threw out a junk lawsuit against hedge fund manager SAC Capital Advisors and Gradient Analytics by the veteran underperforming blame-shifter, Biovail Corp (BVF).

In retrospect it was one of more well-engineered blame-shifting lawsuits of recent years, as this cruddy little pharmaceutical company carefully targeted one of the least sympathetic hedge fund managers in creation. Biovail even managed to con 60 Minutes into a brain-dead segment celebrating its cause. But at the end of the day junk is junk, and out the suit went.