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How'd Goldman Pull It Off?

A Friday Wall Street Journal articleraised questions about Goldman Sach's success during the subprime meltdown while other banks suffered immense losses. But it was just a matter of hedging, Cramer said during Stop Trading!.

Goldman's mortgage department was underwriting collateralized debt obligations, securities based on pools of subprime mortgages, at the same the firm's structured-products trading group was betting the value of those CDOs would fall.

But Cramer called it smart investing, saying that if Goldman Sachs were long mortgages, "we would just call them bums."

"If they were so unethical," Cramer asked, "then why are they everybody's number-one broker?"

Citigroup was up Friday, thanks in part to a note from Goldman Sachs that said Moody's credit-rating cut is a boon to Citi's bonds. Citi can also take advantage of the Fed's money auction. But Cramer pointed out that Wall Street might be discounting the talk of Citi cutting its dividend.

"If you don't get it," Cramer said, "the Meredith Whitney's of the world are going to have to change what they're saying."

Jim's charitable trust owns Citigroup and Goldman Sachs.

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