Talk about a Catch-22. Turns out Goldman Sachs didn’t have a single day of trading losses during 2010Q1. That’s great news for anyone, except:
The lack of trading losses could add to the perception that Goldman Sachs has an unfair advantage in the markets, one shareholder said.
“It will reinforce the heads we win, tails you lose mentality that people think actually exists and promotes the concept of an unfair advantage,” said Douglas Ciocca, a managing director at Renaissance Financial Corp. in Leawood, Kan. “It’s too politically charged not to. How is that possible that they only make money?”
Even though (as evidenced by the article) it will be perceived that Goldman literally never lost, that is not what this means at all. Only that on net, their winning trades outweighed their losing trades. The EMH cannot be reached for comment.
Does Goldman Sachs have an ‘unfair advantage’ in the market, or an ‘unfair advantage’ in rent seeking through the government? I lean toward the latter.
[H/T Mark Thoma]