In a disclosure destined to focus more unwanted attention on Wall Street, Goldman Sachs reported Monday that its traders made money on all 63 trading days of the first quarter of 2010—the first perfect quarter in Goldman's history. But with the Wall Street giant already facing government action for allegedly defrauding investors, the news threatens to "exacerbate criticism that Goldman has an unfair advantage in the markets." A Goldman spokesman says the stellar quarter simply proves the firm is good at assessing risks. Is Goldman playing fair?
Clearly, Goldman's cheating: Sure, Goldman has "plenty of exceptionally talented people," says Larry Doyle in Daily Markets, but it's galling for the firm to attribute its astounding success primarily to trading skill. In fact, Wall Street has become an oligopoly in which Goldman and other giant institutions "control, if not outright manipulate, prices." It's even worse than Vegas, where the house is humble enough to take an occassional loss.
"Goldman's perfect quarter indicates game is fixed"
Goldman's just good at what it does: The fact is that investors depend on Goldman's "strength and intuition," says Don Vialoux in Canada's National Post. So when Goldman says buy, people buy. When Goldman does well, investors feel more confident, and they buy even more. So don't curse the firm's success—as Goldman goes, so goes the market.
"As Goldman Sachs goes, so goes the market"
No matter why it happened, this could hurt Goldman: "It's growing tough for Goldman to convince a jaundiced public it isn't unfairly benefiting at the expense of others," says Liz Moyer in Forbes. Not only did it make money on every trading day, but it made $75 million or more on 51 of those 63 days. That kind of consistency defies belief, so no matter how it happened, Goldman's "slam dunk" quarter could just hurt its already "tarnished public image."
"Will Goldman's perfect quarter hurt them?"