Actually, as a former trader, bid rigging is a big no-no. There is a fine line, ofcourse, e.g. the IPO process's inherent factoring of IPO investors over the issuer or M&A process'a tendency to work off bankers' relationships. But this is unambiguously wrong.
Where this becomes classic Taibbi is in his implication that this is business as usual on Wall Street (it's the only place in America I know of where someone's word is worth billions of dollars, with the paperwork coming after a verbal agreement much of the time).
Sure and there are chinese walls etc but if there is the possibility of making huge amounts of money someone within the structure will attempt to subvert those controls. The question is to what extent firms seek to root out those practices or if they become part of the culture and (unofficially of course) accepted.
The current cases involving LIBOR rigging (http://www.bloomberg.com/news/2011-11-23/london-banks-seen-r...) seem to mirror this article and the debate over Goldman Sachs possible collusion with hedge funds trading against CDOs in 2008 seem to point to the need to ask serious questions about how banks and investment firms conduct themselves.
Where this becomes classic Taibbi is in his implication that this is business as usual on Wall Street (it's the only place in America I know of where someone's word is worth billions of dollars, with the paperwork coming after a verbal agreement much of the time).