Matt Cutts in the past has always maintained that Negative SEO is not really possible. Only recently he is changing his statement. He also keeps on saying Penguin update is not associated with any 'penalty'. So, just to test it out, I blasted about 4 different sites ranking in the top page of Google for keywords with search volume around 6000 per day - with 10,000 xrummer links. All the sites went from 1st page to nowhere in just 2 days .. They have not recovered even after a week. If the new algorithm really pushed good authority sites to the top, these sites should not go down so easily with just 1 blast of xrummer. It also shows that Google is not discounting bad links, but penalizing the sites. It just shows how Google's penguin update is so vulnerable to Negative SEO. It also shows the lack of foresight of Google engineers who were involved in designing these new updates.