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Gold/Mining/Energy : CPN: Calpine Corporation
FRO 23.65-0.4%3:38 PM EST
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To: Clement who wrote (265)2/1/2002 3:53:58 PM
From: Raymond Duray  Read Replies (1) of 555
 
Hi Clement,

Re: Frankly, I find it puzzling what all the fuss is about.

Well, let me be perfectly frank about it. Wall Street has a huge credibility problem. Goldman-Sachs is not unique, but it was just the latest example to cross my screen.

Here's the issue. There is a huge and unreconcilable conflict of interest between GS as an underwriter of equity and bond offerings, and its role as an analyst/advisor to its retail clientele. This is a pairing of roles that ought to is completely unbridgeable, and ought to be strictly illegal.

I saw the devastation to the retail investor in the final blow-off days of the dot.comedy era. Goldman-Sachs was sending crap out into the marketplace as IPOs, supporting the stocks for a brief period and then completely letting go. Many asserted at the time that GS traders were actually taking the short side on companies that they had only months earlier trotted out to a salivating public. I can't prove that, for obvious reasons.

But my point is this. If a company is engaged in underwriting, any sane and sensible retail investor/speculator better realize that any "analysis" from the same firm is no better than ad copy, touting the product du jour. Simple. Wall Street lies. And looks out for its own benefit at tremendous cost to the individual investor. The investor has no friend in the SEC, so it is truly "caveat emptor". And one of the first things the investor needs to learn is that the Goldman-Sachs of this world are not his friend and not on his side. Except as a cutaneous parasite.

-Ray
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