Here's your daily Wall Street-related laugh -- after getting busted for knowingly selling self-described "sh*tty deals" to clients, Goldman Sachs has now decided that it must stop employees from using naughty words in company emails:

The New York company is telling employees that they will no longer be able to get away with profanity in electronic messages. That means all 34,000 traders, investment bankers and other Goldman employees must restrain themselves from using a vast vocabulary of oft-used dirty words on Wall Street, including the six-letter expletive that came back to haunt the company at a Senate hearing in April.

"[B]oy, that timberwo[l]f was one s— deal," Thomas Montag, who helped run Goldman's securities business, wrote in a June 2007 email that was repeatedly referred to at the hearing.

Mr. Montag, who couldn't be reached for comment, wouldn't be allowed to send that email under Goldman's sanitized communications policy, which is being enforced by screening software. Even swear words spelled with asterisks are out.

Oh, now where's the fun in that! How can get an accurate picture of the Real Wall Street works if traders aren't allowed to email each other messages such as "LOL OMG I CANT BELIEVE THE DUMB-A** C***S***ER BOUGHT THAT S****Y M*****F***ING DEAL I CAN'T WAIT 2 SHORT THAT B***H ROFL!!!!1!"

Man, it's hard out here for a pimp these days. Continuing:

A Goldman spokeswoman said: "Of course we have policies about the use of appropriate language and we are always looking for ways to ensure that they are enforced."

"We always tell our f***ing traders not to mouth the f**k off about the s****y deals they make over email," he added. "That sort of talk must be reserved for company restrooms only."

The new edict—delivered verbally, of course—has left some employees wondering if the rule also applies to shorthand for expletives such as "WTF" or legitimate terms that sound similar to curses.

Traders are now banned from writing things like, "OMFG THAT MF HAS NO IDEA WTF IS ABOUT 2 HAPPEN LMAO! I PURCHASED CDS ON THOSE POS SECURITIES FIVE MINUTES AFTER HE BOUGHT THEM FROM ME -- NOW WHEN HE BLOWS UP I WILL BE EFFING RICH LOLOLOLOLOLOLOLOLOLOL!!!!"

This new Goldman policy is a classic example of what we professional philosophers call "Missing the damn point." No one is taking offense at the fact that they used four-letter words in company emails. The offensive thing is that they allegedly designed collateralized debt obligations filled with crappy mortgages and then sold them to unwitting clients and then shorting securities in the CDOs through credit default swaps.

This sort of behavior, needless to say, is much more offensive than using the s-word over and over again in emails.

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Krugman points out (again) that the administration should have nationalized troubled banks. They didn't, and the under-regulated, undisciplined banking industry is hurting everyone else as a result:

Ask the people at Goldman, and they’ll tell you that it’s nobody’s business but their own how much they earn. But as one critic recently put it: “There is no financial institution that exists today that is not the direct or indirect beneficiary of trillions of dollars of taxpayer support for the financial system.” Indeed: Goldman has made a lot of money in its trading operations, but it was only able to stay in that game thanks to policies that put vast amounts of public money at risk, from the bailout of A.I.G. to the guarantees extended to many of Goldman’s bonds.

So who was this thundering bank critic? None other than Lawrence Summers, the Obama administration’s chief economist — and one of the architects of the administration’s bank policy, which up until now has been to go easy on financial institutions and hope that they mend themselves.

Why the change in tone? Administration officials are furious at the way the financial industry, just months after receiving a gigantic taxpayer bailout, is lobbying fiercely against serious reform. But you have to wonder what they expected to happen. They followed a softly, softly policy, providing aid with few strings, back when all of Wall Street was on the ropes; this left them with very little leverage over firms like Goldman that are now, once again, making a lot of money.

But there’s an even bigger problem: while the wheeler-dealer side of the financial industry, a k a trading operations, is highly profitable again, the part of banking that really matters — lending, which fuels investment and job creation — is not. Key banks remain financially weak, and their weakness is hurting the economy as a whole.

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This is interesting. The administration's new regulation proposal contains procedures that will essentially quarantine financial companies in trouble, making it easier for the feds to step in and isolate problem operations. The devil, of course, will be in the details:

They are the biggest of the big — the Citigroups, the Goldman Sachses, the AIGs and other financial behemoths. The Obama administration doesn't want so many around anymore.

Financial regulations proposed by the president would result in leaner and simpler institutions that don't carry the weight of the system on their marble columns.

Around Washington and Wall Street they have come to be known as TBTF — too big to fail. It's not just size, though. These companies are so far-flung, so intertwined and so precariously leveraged that a single one's collapse can create systemwide tremors that imperil the finances of millions of Americans.

With that fear in mind, the government stepped in to bail out Citigroup Inc., Bank of America Corp. and American International Group Inc. with tens of billions of public money last year.

Looking to avoid such a costly intervention, President Barack Obama's regulatory plan calls for large, interconnected companies to pay a heavy price for the systemwide risk they pose.

So far, however, congressional debate has centered on the administration's plan to put the Federal Reserve in charge of these "systemically significant" companies. Less attention has focused on the potential effect on the institutions and the financial system's hierarchy.

Under the administration's proposal, companies such as Citi, Goldman Sachs and others in a broad top tier engaged in complex transactions would face stricter scrutiny and have to hold more assets and more cash as cushions against a downturn.

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