MoneyShow.com asks: What is Goldman Sachs for? Investors no longer know, the main reason the former Wall Street titan’s stock is down 36% this year. Goldman, memorably caricatured by a Rolling Stone writer as the “vampire squid,” at least used to have its tentacles in all the right places.
It helped hedge-fund manager John Paulson make billions betting against subprime mortgages, and made a pretty penny on the trade itself before getting bailed out by the Federal Reserve and Warren Buffett from the unforeseen consequences of its profiteering. It helped Greece hide billions in fiscal deficits that would ultimately spark Europe’s debt crisis. In its heyday, Goldman was the biggest dealer in the global financial casino—and one of the savviest gamblers as well, divvying up billions in trading profits among its partners.
In some ways, Goldman is still the squid—a nearly dead one stinking up the marketplace. It was the subject of at least four market-moving stories yesterday, and on days like that stocks hardly have a chance. You know it’s bad when the least damaging Goldman story of the day has to do with the settlement it reached with the Fed over (in Fed’s words) “a pattern of misconduct and negligence” by Goldman’s mortgage servicing unit, which Goldman agreed to sell in June for little more than half of what it paid for it four years earlier...
Find out more at http://www.minyanville.com/businessmarkets/articles/goldman-sachs-vampire-squid-banking-sector/9/2/2011/id/36704
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