The REAL Scam continues- Goldman

Massachusetts Secretary of the Commonwealth William Galvin has subpoenaed Goldman Sachs for more information about its "trading huddles"--the internal meetings in which analysts produce near-term trading ideas that are given to the firm's proprietary traders and a select group of clients but not disseminated broadly.

Galvin's concern? This is selective dissemination that benefits Goldman and its biggest clients and screws everyone else.

Our guest Susanne Craig broke the Goldman story for the Wall Street Journal that led to Galvin's investigation. She thinks Goldman's "huddle" practice raises several important questions, such as whether the select group of clients are being "tipped" about future ratings changes.

If that is in fact what is happening--explicitly or implicitly--the practice should be investigated. But as a former Wall Street analyst, I think there is a much more important lesson here:

* It will never be a level playing field.
* The best clients of firms like Goldman Sachs will always get better information from to the firm's traders and analysts than small investors. Big investors will always get better access to companies than small investors. Big investors will always be able to afford better research, better analysis, and better trading systems than small investors. (Just one example: The facial expression of a CEO when asked a tough question is often more revealing than a hundred-page SEC filing).
* By implying that the playing field should or can be level, regulators encourage small investors to think that it usually is. This is crazy. The sooner small investors learn that the better.

Follow up on Article I posted -FDIC on Fumes

http://news.yahoo.com/s/ap/20090826/ap_on_bi_ge/us_fdic_shrinking_fund