Sunday, December 16, 2007

Goldman Sachs: A windfall, but at what cost?

To many, Goldman Sachs defines the term “Chutzpah”. While some investors admire the power house bank for avoiding the mortgage fiasco by effectively going short subprime debt; others question the integrity of a firm pimping these structured assets as great investments to customers while simultaneously shorting the entire market with its own capital. A common place duplicity which highlights the misbehavior of Wall Street in the minds of many regulators and industry analysts.

“Goldman's success at wringing profits out of the subprime fiasco, however, raises questions about how the firm balances its responsibilities to its shareholders and to its clients.”

“Why did Goldman continue to peddle CDOs to customers early this year while its own traders were betting that CDO values would fall? A spokesman for Goldman Sachs declined to comment on the issue.”

A recent article gives an excellent overview of the structured products trading group that saved Goldman’s bacon.

How Goldman Won Big On Mortgage Meltdown