Transcripts

"Two Ways To Play"-Kevin Depew of Minyanville

SUSIE GHARIB: Goldman Sachs is taking heat for giving trading tips to its biggest customers. Tonight's two ways to play looks at whether this is the proverbial mole hill of which mountains are made. Here's Kevin Depew of Minyanville and Minyanville's Kevin Depew.

KEVIN DEPEW, EXECUTIVE EDITOR, MINYANVILLE.COM: Once again people are furious at Goldman Sachs, this time about the firm's practice of holding weekly meetings where trading tips are shared with some of its biggest clients. These tips usually involve expectations for short-term moves in stocks. And you'd better sit down for this, sometimes these stock tips are different from the official ratings on the stocks. Naturally, Goldman's smaller clients are upset by this. The appearance is that the firm is saving the top shelf research for its big clients and giving everyone else the cheap stuff. OK, outrage at Goldman Sachs, what else is new? But these short-term- trading ideas are not related to longer-term stock opinions issued by the firm and so they're not doing anything wrong. Think about it like this. If you go to Vegas and spend $10,000 bucks gambling, you're going to get a free room. Spend a hundred bucks, well, good luck with that. Don't get me wrong, There are plenty of reasons to be outraged at Goldman Sachs. Start with the $10 billion they got from the government right before reporting their richest quarterly profit in history. Just don't blame them for doing what all businesses do, providing extra services to their best clients.