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Shock! Goldman favours big clients

Susanne Craig uses 2,200 words in today’s Wall Street Journal that state the obvious: Goldman Sachs treats big clients better than small ones.

In any other industry, a company giving favourable treatment to its best customers would stand accused of nothing more than sound business practice.

So it is a measure of the dysfunctional state of Wall Street investment research – not to mention the frenzy of interest in the vampire squid – that Goldman’s activities are considered worthy of such scrutiny.

Here’s the nub of Craig’s case:

Every week, Goldman analysts offer stock tips at a gathering the firm calls a “trading huddle.” But few of the thousands of clients who receive Goldman’s written research reports ever hear about the recommendations.

Regulation as will and idea

It is somewhat strange that a disgraced elected official has now repositioned himself as an expert commentator on financial regulation, but that is exactly what Eliot Spitzer, the former New York governor, has done.  His most compelling article for Slate to date is a critical look at the Obama administration’s proposed financial overhaul.

Regulators failed in the financial crisis not because they lacked the proper tools, Spitzer says,  but because they lacked the “will to use existing power.”