Goldman Sachs: Bank Can 'Practically Mint Money' And 'Never Loses'

[Me.]

…snip…

“But McLean's piece also uncovers some of the overlooked claims against Goldman Sachs. McLean writes that with its competitors crippled -- especially Merrill Lynch and Lehman Brothers -- Goldman was one of the only firms able to profitably effectuate the sale of a huge amount of Wall Street assets. As the financial system imploded last fall, Goldman emerged as something of a centralized trading nexus for the industry's less-favored securities.

She writes that the bank was enabled by "spreads -- the difference between the price at which you sell and buy a variety of securities -- were wider than they had been in years, meaning that Goldman could practically mint money."

McLean spoke to two financial insiders who had a far more colorful way of putting it:

"People worry that they're in my business, and they're better than I am," says one money manager. Asks another hedge-fund trader, "Are they the Yankees? No, the Yankees actually lose! Goldman never loses. And people say they are a hedge fund! This ain't no hedge fund. Hedge funds lose money." When I ask him if he does business with Goldman, however, he replies, "Of course we do business with them. We have to. It's like the Mob who picks up the garbage. You pay their fees, because you need your garbage picked up."

Goldman's transition from a traditional investment bank, McLean writes, into a firm that earns the vast majority of its profits through trading may have also changed the way it treats its clients. Actually, that's putting it nicely. A recent series of articles by McLatchy accuses the bank of divesting its own positions from the mortgage market, while selling $40 billion in shoddy mortgage securities to its own customers.

In short, Goldman may have sold a bill of goods to its clients. McLatchy spoke to one banking expert who argues that this could constitute a criminal act:”…cont…

http://www.huffingtonpost.com/2009/12/01/goldman-sachs-vanity-fair_n_375468.html

[yurbud]

1. like the mob, Goldman Sachs should get their feet in a bucket of cement and be dropped into

the East River.

[Me.]

2. No Wonder They're Arming Themselves

As if there wasn't reason enough already

[Me.]

3. Kick