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Earlier this month Bloomberg gave us this headline:

Today they give us this one:

Does anyone else see the irony here? Goldman doesn't have even one single losing day in the entire first quarter but it's clients, on the other hand, lose money on the firms' “top trades.”

There is only one explanation for this and you will find it in any of the 'behind the scenes' financial books written by former insiders. The big investment houses make it a common practice to keep profitable trades for themselves while pawning the losing trades off on their customers.

In his classic “Liar's Poker” Michael Lewis writes about his very first trade as a bond salesman for Salomon Brothers:

My first order. I felt thrilled and immediately called the U.S. treasury trader in New York and sold him three million dollars' worth of treasury bonds. Then I shouted over to the London corporate bond trader, “You can do three million of the ATTs,” trying, of course, to sound as if it really weren't that big a deal, just another trade, like going for a walk in the park.

There was in every office of Salomon a systemwide loudspeaker, called the hoot and holler or just the hoot. Apart from money, success at Salomon meant having your name shouted over the hoot. The AT&T trader's voice came loudly over the hoot: “Mike Lewis has just sold three million of our AT and Ts for us, a great trade for the desk, thank you very much, Mike.”

I was flushed with pride. Flushed with pride, you understand. But something didn't quite fit. What did he mean, “Our AT and Ts”? I hadn't realized the AT&T bonds had been on Salomon's trading books. I had thought my trader friend had snapped them up from stupid dealers at other firms. If the bonds were ours to begin with . . .

Dash was staring at me, disbelieving. “You sold those bonds? Why?” he asked.

“Because the trader said it was a great trade,” I said.

“Nooooooo.” Dash put his head in his hands, as if in pain. I could see he was smiling. No, laughing. “What else is a trader going to say?” he said. “He's been sitting on that position for months. It's underwater. He's been dying to get rid of it. Don't tell him I told you this, but you're going to get fucked.”

Lewis didn't get fucked but his customer did. Salomon's great trade was it's customer's big loser. Is this starting to sound familiar?

On main street this would be seen by anyone as, if not fraud, just plain bad business. On Wall Street, however, it's just business as usual.