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Bob Moon: "Fellow shareholders." That was the start of today's eight-page letter from the heads of the Wall Street Bank Goldman Sachs. A letter that mentioned the word "client" more than 50 times. Goldman's motives were clear.
After a year of public outrage over the firm's huge profits in the wake of the financial crisis, it wanted to assure shareholders that it's been acting in the best business interest of its clients. It is, after all, an "investment bank."
But as Marketplace's Jeremy Hobson reports from New York, the vast majority of Goldman's business these days is trading for itself.
JEREMY HOBSON: If you don't want to read the entire eight-page Goldman Sachs letter, just know that the message to clients is basically the same as this 1991 Bryan Adams hit.
BRYAN ADAMS: Everything I do, I do it for you...
But wait a minute. Goldman Sachs made 76 percent of its revenue last year from the investments in its own accounts. So how can that be good for clients? Well today's letter said quote: "In these cases, we are executing transactions in connection with our role of providing liquidity to markets."
CORNELIUS HURLEY: Well there's a certain amount of truth to that. I mean they are an intermediary, and they do help firms issue shares and debt. That's what they're supposed to do. They're a utility in that respect.
That's Cornelius Hurley, who directs the Morin Center on Banking at Boston University. He says what's puzzling is that they're patting themselves on the back for providing liquidity to the markets.
HURLEY: They don't admit in the letter that every day they open their doors for business, they receive a government subsidy in the form of a lower borrowing cost because you and I, and other taxpayers, stand ready to bail the firm out and creditors know that.
In other words their liquidity is just Washington's liquidity, repackaged.
Chester Spatt is a professor of finance at Carnegie Mellon. He says Goldman's penchant to trade for itself is the new normal for investment banks.
CHESTER SPATT: Many firms are in the business of being basically dealers. And inherently what a dealer does, is the dealer takes the opposite side of what the customer wants.
And Spatt says you can't blame Goldman for ending up on the winning side of many of those trades. Even if they have to mention clients 56 times in their shareholder letter to make up for it.
In New York, I'm Jeremy Hobson for Marketplace.