Another "Crazy Goldman Sachs Conspiracy Theory".

You want to hear the latest nutty Goldman Sachs conspiracy theory?  Check it out;

• Goldman equity analysts put ratings out on individual stocks for investor consumption.  For example, they may rate stock XYZ "neutral".
• Then they have meetings with the firms traders, including the proprietary trading desk, where the analyst gives his or her opinion that runs counter to the published rating.  For instance, the analyst may tell their desk that XYZ is actually a buy.  However, so as not to appear untoward, the analyst will flag XYZ as "up" as opposed to buy. The same works for "sell".  That is called "down".
• Goldman then calls select clients, like gigantic hedge funds and also gives them the "up" recommendation. 
• While most of the investing public still thinks Goldman is neutral on XYZ, Goldman proprietary traders latch on to the select big hedge funds to take XYZ "Up".  Perhaps during this time, investors not privy to the select "Up" call, see the run up in a stock that Goldie is lukewarm at best on (after all, that is what the equity analyst reported) and sell into this "Up" move. 
• Then, after a few days, the Goldman equity analyst changes his official "neutral" rating to "buy". 

Pretty slimy isn't it.  Where did this crazy rumor come from?  Rabble rouser Matt Taibbi?  www.goldman666.com? The "Communist Daily Worker?  How about the Wall Street Journal!  Have a read.  Goldie may be in real big trouble here.  They may even get a whopping $50 million fine from the SEC!!  Here's the WSJ piece Goldman Trading Tips Reward Its Biggest Clients.  

Comments

[John McLeod]

We recycle. I've already had some fun commenting under this story here.
http://blogs.reuters.com/commentaries/2009/08/25/facing-both-ways-on-goldmans-research/

What's probably worrying GS more is Sen. Kaufman's recent demand that the SEC actually have a look at HFT. His letter to Mary Shapiro reads like a ZeroHedge post (heck, here it **is** a ZeroHedge post)
http://www.zerohedge.com/article/full-kaufman-letter-mary-schapiro

[eric]

Dear Lord. I wrote the title in jest.

[Fred]

better get your heads out of your asses boys. GS was and is the cause of all things bad in the working mans economy.