(2009-03-19) Goldman Conspiracy

It's all too easy to believe a Conspiracy Theory that Goldman Sachs is going to be a big beneficiary of the Bail-Out game.

Barrons (Andrew Bary) on how Goldman and Morgan Stanley are poised to do great. Look at what has happened on Wall Street. Lehman is gone. Bear-Stearns is part of J P Morgan (JPM). Merrill Lynch merged into Bank Of America, which bought Merrill for its retail brokerage network, not its institutional business. CitiGroup (C) is wounded. Most European banks are on the ropes, including UBS (UBS), which has been scorched by enormous U.S. mortgage losses. A year ago, about a dozen financial heavyweights were scrapping for U.S. debt, equity and advisory business. Now there may be just three committed and deep-pocketed rivals: Goldman, Morgan Stanley and J P Morgan.

Umair Haque sees the AIG Bail-Out in these terms, too. Bailing out AIG's looters is worse than Crony Capitalism - it's crony socialism. Your money's being transferred directly to - let's see, who's at the top of AIG's counterparty list? Why, it's none other than Goldman Sachs, who, just a few months ago vehemently denied any significant exposure to AIG. Goldman, is, of course, Henry Paulson's former employer, and apparently the home of one of Tim Geithner's most influential mentors.