Dear Goldman, it is you again?

Thanks to the lawsuit the SEC brought against Goldman, more emails have been leaked by Senate regarding how Goldman made money even when everything fell apart back in 2008. Armed with these valuable information, New York Times has written another block-buster article which I strongly urge everyone to read. There are a lot of new finance jargon popping up in this article, namely conflict management, pre-trade information, client arbitrage et al. Some excerpts for busy people to digest:

(1) Some former insiders, who requested anonymity because of concerns about retribution from the firm, say Goldman has a 15th, unwritten principle that employees openly discuss. It urges Goldman workers to embrace conflicts and argues that they are evidence of a healthy tension between the firm and its customers. If you are not embracing conflicts, the argument holds, you are not being aggressive enough in generating business.

(2) Even Goldman’s mortgage department compliance training manual from 2007 acknowledges the challenges posed by the firm’s clients-come-first rule...... In addition, the manual explains how Goldman uses information harvested from clients who discuss the market, indicate interest in securities or leave orders consisting of “pretrade information.” The manual notes that Goldman also can deploy information it receives from a wide range of other sources, including data providers, other brokerage firms and securities exchanges.

Last but not least, I can’t resist but to quote Mr. Kerry K. Killinger, then CEO of WaMu, commenting on Goldman. “I don’t trust Goldy on this. They are smart, but this is swimming with the sharks.”