When You Realize That Goldman Sachs Management Tries To Rationalize Their Scheming, The Word “Scum Bag” Comes To Mind

Is it any wonder that the average person you talk to today says they feel their odds are better betting on sporting events like football than investing in the market? After all, hasn’t the market turned out to be a type of shell game?

The shell game (also known as Thimblerig, Three shells and a pea, the old army game) is portrayed as a gambling game, but in reality, when a wager for money is made, it is a confidence trick used to perpetrate fraud. In confidence trick slang, this famous swindle is referred to as a short-con because it is quick and easy to pull off. - wiki

Is Goldman Sachs (NYSE:GS) not today’s version of the thimblerigger?

They refer to one of their “fair dealing” practices as a “trading huddle” - I call it fraud. In the so-called “huddle”, the Goldman Sachs analyst meets with a small and select group of the firm’s proprietary traders and key clients to announce in advance what the printed research report will unveil a week later. They huddle because there is a difference between what the analyst has previously represented as the firm’s position on a stock and what that analyst is soon to publish.

Wall Street Journal today has published an article headlined “Goldman’s Trading Tips Reward Its Biggest Clients”.

http://online.wsj.com/article/SB125107135585052521.html

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According to WSJ, this practice started two years ago, after, we know, the Bear market became full-blown and Humungous Bank & Broker (HB&B) was scrambling for ways to stay afloat. Obviously they turned to fraud. Is there any other name for it?

Part of Speech: noun

Definition: trickery, deception

Synonyms: artifice, bamboozlement, barratry, blackmail,cheat, chicane, chicanery, con, craft*, deceit, double-dealing, dupery, duping, duplicity,extortion, fake, fast one, fast shuffle, flimflam, fourberie, fraudulence, graft, guile, hanky-panky, hoax, hocus-pocus, hoodwinking,hustle*, imposture, line, misrepresentation, racket, scam, sell, shakedown, sham*, sharp practice, skunk, smoke*, song and dance,song*, spuriousness, sting, string, swindle, swindling, treachery

Antonyms: fairness, honesty, justice

When you realize that Goldman Sachs management tries to rationalize their scheming, the word “scum bag” comes to mind.

(WSJ) Goldman Sachs Group Inc. research analyst Marc Irizarry’s published rating on mutual-fund manager Janus Capital Group Inc. was a lackluster “neutral” in early April 2008. But at an internal meeting that month, the analyst told dozens of Goldman’s traders the stock was likely to head higher, company documents show.

The next day, research-department employees at Goldman called about 50 favored clients of the big securities firm with the same tip, including hedge-fund companies Citadel Investment Group and SAC Capital Advisors, the documents indicate. Readers of Mr. Irizarry’s research didn’t find out he was bullish until his written report was issued six days later, after Janus shares had jumped 5.8%.

Every week, Goldman analysts offer stock tips at a gathering the firm calls a “trading huddle.” But few of the thousands of clients who receive Goldman’s written research reports ever hear about the recommendations.

At the meetings, Goldman analysts identify stocks they think are likely to rise or fall due to earnings announcements, the direction of the overall market or other short-term developments. Some of their recommendations differ from ratings printed in Goldman’s widely circulated research reports. Some Goldman traders who make bets with the firm’s own money attend the meetings.

Critics complain that Goldman’s distribution of the trading ideas only to its own traders and key clients hurts other customers who aren’t given the opportunity to trade on the information.

Securities laws require firms like Goldman to engage in “fair dealing with customers,” and prohibit analysts from issuing opinions that are at odds with their true beliefs about a stock. Steven Strongin, Goldman’s stock research chief, says no one gains an unfair advantage from its trading huddles, and that the short-term-trading ideas are not contrary to the longer-term stock forecasts in its written research.

These people have to be demented if they think the public won’t be outraged at what is obviously front-running. Flash trading, front-running… obviously Goldman Sachs believes that as a “made” organization they can treat society with total disrespect.

The ball is now in the SEC’s court.

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