Give Goldman Credit......

...For being excellent traders. Lets not for a second take them off the hook for being the governments proxy for a healthy financial system. Lets also not let them off the hook for issuing tax payer backed debt to finance their trading book. There is many ways we can keep hammering GS, but this one singular things that cant be minimized is that the guys and of course gals at Goldman are great traders.

Why?

What makes them great is everyone else lost their shirts except for Goldman. Think about it! Morgan Stanley got destroyed, and they are still not taking risk. Citigroup and Merrill are obinations. Lehman & Bear Stearns are dead. We don't even need to go into BNP Paribas, SocGen, CSFB, UBS, and the nitwits at RBS. Barclay's also had severe write-offs, but never took any government money, although toxic securities on their balance sheet were guaranteed by the government. All in all, all of these firms had traders who made millions previously, but lost 10X more when things got dicey, all except Goldman. We in the trader community are always judged by the last trade we put in, and the last trades that traders generally executed were the derivative, CDS, MBS, and the exotic variety. Most of these trades went the nuclear route leveling their respective firms and wrecking both the economy and credit system. Goldman Sachs was never hurt by AIG, Bear Stearns, or even Lehman. They made more money on their respective demises. There is absulutely nothing wrong with profiting from another's demise, you have a problem with that? Move to Tibet! Trading is a zero sum game, for every trade there is a counter party, for every trade a loser and a winner. What makes a market is buyer and seller. It takes two to tango. Let me just tell you AIG took it on the chin because Goldman was the main counter party for their ludicrous trading decisions. Should we hammer Goldman for that? Being smart and correct? If Merrill, Citi, Lehman, Bear, and even JP Morgan had simply stopped drinking the sub prime cool aid, they too would have escaped the carnage. But they didn't. All of these guys kept putting in bad trade after bad trade, levering up and doubling down on crap mortgages. Goldman never did that. They knew better, they were agnostic to the market. They traded what they saw, not what they believed. They had no opinion what so ever. You can say they were negative and short sub prime, but that was only after the market told them that. This information was out there for everyone to see, Goldman traders and executives were the only one who executed on it.

You cant keep telling me they are bankrolled by the government, they have drones everywhere in government, conspiracy this...conspiracy that. You could even say, they created the sub prime market, sold out their inventory of sub prime junk, then went short. All of which is 100% true! To this I say...So what! Why didn't JP, MS, Citi, Lehman, Bear, and the other so called great investment banks do the same? Why didn't AIG hedge just a little? Don't tell me that they couldn't or it wasn't available. Ridiculous! They simply didn't want to. They acted like morons because they failed to properly guage the market and the corresponding risk associated with it. They were themselves believing their own flawed thinking backed by models that didn't work. The traders at most financial firms never were able to adjust to the changing environment. That doesn't make them bad traders, but they can longer call themselves great traders or even good traders just by the amount of money they previously made. Good/Great Traders execute!

This comes down to simple behavior of human beings to act responsibly and to execute properly.
The best traders are not right more then they are wrong. They don't make more money on great trades, then lose less money on bad trades. It has nothing to do with leverage and risk taking. Nothing to do with your academic pedigree, or what secret handshake you use when you walk unto the desk every morning. Its all about making adjustments, adjusting your thinking and trading style to fit what's happening in changing dynamic situations. Great traders are the ones who get it right real quick when they are wrong. Great Traders don't need to be reminded that their positions are going against them, they have already figured that out and gotten out, before the losses multiply. Its all about executing in a dynamic changing environment. These changes happen 10 seconds after you make the trade, knowing your wrong is not admitting failure, its admitting that the trade and market is bigger then you, and can crush you. Great traders make quick decisions that are painful not only to their P/L Ledger, but also quite painful to their own ego. But making these tough decisions with no ego and bravado involved is what made Goldman escape the crisis. Although they show a lot of ego, arrogance, and bravado at bonus time. That's OK as well. To the victor goes the spoils. Where I have a problem is when irresponsible traders who murdered the system get equal amount of bonus money. No one! I mean no one should get a dime of bonus money on Wall Street except for the guys at Goldman. The Merrill and AIG traders should be publically flogged for their absurd behaivor.

All of the public attitudes and opinions of GS is implicitly and explicitly true. I agree the bonus money being paid out to Goldman bankers and traders is vulgar. That's the society will live in. You don't like it! Again...move to Tibet! but more anger should be pointed at AIG, Lehman, Citi, and the other 8 dwarfs. They are the ones who totally cluster screwed the system, Goldman just sat there and made money off the collateral damage. Nothing wrong with that. Just imagine if Goldman did the same as AIG and Merrill? Where would we be?