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peaceandlove · 08-25-2009, 09:20 AM

America Is Running Out Of Rope

Monday, August 24. 2009
Posted by Karl Denninger in Editorial

Oh no, we don't cheat: Goldman's Trading Tips Reward Its Biggest Clients http://online.wsj.com/article/SB125107135585052521.html

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.

Nothing like selling bonds out the front door and shorting them on your prop desk, right? Oh wait, Goldman did that too!

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.

Riiiight. And I'm the Easter Bunny.

The tips usually go to top clients who have expressed interest in having the information and have short-term investment horizons, he says. Goldman doesn't want to overload other clients with information that isn't relevant to them, he says. "We are not in the business of serving thousands of retail customers," he says.

Let me guess: They also go to the proprietary (inside) traders that are gambling with the firm's money (and your "liquidity guarantee" as a taxpayer, since they're a BANK now.) Am I right?

Research-department employees prepare telephone scripts, then call top clients, typically several hours after the meeting has ended. Goldman says its in-house traders are prohibited from trading on the tips until after they've been relayed to clients.

Documents reviewed by the Journal indicate that anywhere from six to 60 clients are contacted, depending on the investment.

Continues: http://market-ticker.denninger.net/a...t-Of-Rope.html

Also available in BLOG TALK RADIO: see right hand side of link above

08-25-2009, 09:20 AM	#6
peaceandlove Avalon Senior Member Join Date: Sep 2008 Location: Turtle Island Posts: 2,776	Re: Goldman sachs ... Is the economic crisis America Is Running Out Of Rope Monday, August 24. 2009 Posted by Karl Denninger in Editorial Oh no, we don't cheat: Goldman's Trading Tips Reward Its Biggest Clients http://online.wsj.com/article/SB125107135585052521.html 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. Nothing like selling bonds out the front door and shorting them on your prop desk, right? Oh wait, Goldman did that too! 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. Riiiight. And I'm the Easter Bunny. The tips usually go to top clients who have expressed interest in having the information and have short-term investment horizons, he says. Goldman doesn't want to overload other clients with information that isn't relevant to them, he says. "We are not in the business of serving thousands of retail customers," he says. Let me guess: They also go to the proprietary (inside) traders that are gambling with the firm's money (and your "liquidity guarantee" as a taxpayer, since they're a BANK now.) Am I right? Research-department employees prepare telephone scripts, then call top clients, typically several hours after the meeting has ended. Goldman says its in-house traders are prohibited from trading on the tips until after they've been relayed to clients. Documents reviewed by the Journal indicate that anywhere from six to 60 clients are contacted, depending on the investment. Continues: http://market-ticker.denninger.net/a...t-Of-Rope.html Also available in BLOG TALK RADIO: see right hand side of link above