GO
Loading...

The Case Against Goldman

Despite reporting quarterly profits that nearly doubled, investors sold Goldman Sachs on Tuesday. Should you be greedy while others are fearful?

And there’s no question about it – investors are fearful. Perhaps with good cause.

On Tuesday British regulators followed their American counterparts in launching a probe into alleged fraud related to subprime mortgage investments.

And according to the Financial Times, AIG may also be taking aim at Goldman, too -- to the tune of $6 billion they paid out in insurance deals on Goldman’s mortgage-backed securities.

As you likely know, on Friday our own SEC filed civil charges, alleging that Goldman did not tell investors "vital information" about a financial instrument made up of subprime mortgages.

Of particular concern to the SEC was the fact that the hedge fund run by John Paulson was involved in choosing which securities would be part of the portfolio.

Goldman responded to the charges, saying they were "completely unfounded in law and fact."

But whether they’re guilty, innocent of something in-between strategic investor Dennis Gartman tells us what matters most is that the lawsuits will drag on for years.

“Think about the asbestos makers,” reminds Gartman. “That hung over them for years.”

Gartman’s biggest concern is that the lawsuits could drag on for such a long time that the focus among top Goldman management will shift away from the core business.

“Every lawyer is going to try and find some way to bring a suit against Goldman, and they’re going to have to defend themselves. I hope there are no problems long-term but history tells me there will be,” he concludes.

*Find out what the panel has to say about the market chatter about CEO Llyod Blankfein and whether he’ll survive the scrutiny. Watch the video now.

______________________________________________________
Got something to say? Send us an e-mail at fastmoney-web@cnbc.com and your comment might be posted on the Rapid Recap! Prefer to keep it between us? You can still send questions and comments to fastmoney@cnbc.com.

Trader disclosure: On April 20, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders Scaramucci Owns (AAPL), Skybridge Owns (AAPL); Scaramucci Owns (BAC), Skybridge Owns (BAC); Scaramucci Owns (C), Skybridge Owns (C); Scaramucci Owns (GE), Skybridge Owns (GE); Scaramucci Owns (GS), Skybridge Owns (GS); Scaramucci Owns (IBM), Skybridge Owns (IBM); Scaramucci Is Long U.S. Dollar, Skybridge Is Long U.S. Dollar; Najarian Owns (BP); Najarian Owns (C) Calls; Najarian Owns (GOOG) Calls; Najarian Owns (JNPR) Calls; Najarian Owns (LVS) Call Spread; Najarian Owns (MCD) Calls; Najarian Owns (YHOO) Call Spread; Terranova Owns (C) May Calls; Terranova Owns (XCO), (SWN), (TER), (HES), (AXP), (MOS), (YHOO); Terranova Is Short (BRE); Terranova Is Short (LCC); Nations Owns (MSFT); Najarian Owns (C) Calls; Najarian Owns (YHOO) Call Spread; Najarian Owns (MCD) Calls; Najarian Owns (GOOG) Calls; Najarian Owns (ALL) Calls; Najarian Owns (CLF) Call Spread; Najarian Owns (TCK); Najarian Owns (MRVL); Edwards Owns (VXX); Cortes Is Short S&P 500 Futures; Cortes Is Short (LVS); Cortes Is Short (WYNN)

For Joe Terranova
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLI)

For Patty Edwards
Edwards Owns (AAPL) For Clients
Edwards Owns (BAC) For Clients
Edwards Owns (GE) For Clients
Edwards Owns (GOOG) For Clients
Edwards Owns (IBM) For Clients
Edwards Owns (INTC) For Clients
Edwards Owns (JNJ) For Clients
Edwards Owns (JPM) For Clients
Edwards Owns (KO) For Clients
Edwards Owns (MCD) For Clients
Edwards Owns (MS) For Clients
Edwards Owns (MSFT) For Clients
Edwards Owns (RIMM) For Clients
Edwards Owns (RIG) For Clients
Edwards Owns (TOT) For Clients
Edwards Owns (UNH) For Clients
Edwards Owns (WFC) For Clients
Edwards Owns (SPY) For Clients
Edwards Owns (QQQQ) For Clients
Edwards Owns (PGM) For Clients
Edwards Owns (GLD) For Clients
Edwards Owns (VXX)

For Yair Reiner
Oppenheimer & Co. Is A Market Maker In (AAPL)

GE Is The Parent Company Of CNBC

Symbol
Price
 
Change
%Change
GS
---

Featured

Contact Fast Money

  • Showtimes

    Halftime Report - Weekdays 12p ET
    Fast Money - Weekdays 5p ET

Halftime Report