Is this ethical and how does it differ from what Goldman did?

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I haven't spent much time acctually following the SECOND complaint against Goldman or what they are alleging that was done. Recommending trades to your customers and then taking the other side because you are convinced of the outcome.

Let's say I'm a retail broker, and I call 100 clients and convince them to get LONG pork bellies, and after they do so, and I make my transaction fees, I go SHORT in my own personal account. If I'm correct about the market, the clients win, and I get to make more and more transaction fees, but lose in my personal account. If I'm wrong, my clients lose and I make money in my personal account.

How is what Goldman is alleged to do any different than this?

Welcome to Wall Street?
 
How about: No stock to borrow, broker calls me up and suggests I go long. I buy x shares which he can now lend or short for his "other" client.
 
Under the doctrine of caveat emptor (buyer beware), the buyer could not recover from the seller for defects on the property that rendered the property unfit for ordinary purposes. The only exception was if the seller actively concealed latent defects or otherwise made material misrepresentations amounting to fraud.

Before statutory law, the buyer had no warranty of the quality of goods. In many jurisdictions now, the law requires that goods must be of "merchantable quality". However, this implied warranty can be difficult to enforce and may not apply to all products. Hence, buyers are still advised to be cautious.
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GS was equally short as they were long. They were 1% net short. This is not materially short. You people ignoring GS' defense without hearing them out are ignorant leftists who do not have the moral high ground.
 
Quote from nutmeg:

How about: No stock to borrow, broker calls me up and suggests I go long. I buy x shares which he can now lend or short for his "other" client.
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And you'd be an idiot to take up his offer on his advice alone. You'd also be naive to think that a broker that lives on commissions isn't going to be a salesman, rather than a genuine advisor.
 
Completely different. CDOs and especially synthetic CDOs are opaque, illiquid, and difficult to value. The problem was deceiving clients regarding the product itself-they misrepresented a highly risky asset as being basically riskless. Pork bellies are pork belies and barrels of oil are barrels of oil. So the analogy does not work.
 
Quote from Mr J:

And you'd be an idiot to take up his offer on his advice alone. You'd also be naive to think that a broker that lives on commissions isn't going to be a salesman, rather than a genuine advisor.
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Bingo. I was an idiot. It gets worse but (sigh) we won't go there.:D
 
Quote from Petsamo:

GS was equally short as they were long. They were 1% net short. This is not materially short. You people ignoring GS' defense without hearing them out are ignorant leftists who do not have the moral high ground.
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Are you for real ?

You believe Goldman defense. You actually believe what they are saying.

Gosh there is a sucker born every minute :cool:

What about Goldman cheating on High Frequency Trading.

Front running orders.

What ??

Never heard of that one eh sucker :cool:
 
Quote from nutmeg:

Bingo. I was an idiot. It gets worse but (sigh) we won't go there.:D
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We usually are until we're forced to think. Not that thinking is much help to most of us :eek:.
 
How can you defend gs, these assholes knew what was gonna happen, how many lifes got destroyed, countries going broke because of their scheme, they should hang them right front of their building.
 
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