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In the case of Goldman it could be deal flow.

• leroy_masochist 8y ago
  In the case of Goldman it's because they do better work than other firms on behalf of their investment banking clients and keep getting rehired, which is why they've had the world's strongest IB franchise for several decades
  • staticautomatic 8y ago
    Unless you count Goldman taking the other side of those same IB deals against their own clients...
    • FabHK 8y ago
      Yeah, when the trading side rose to power at GS (vis-a-vis the (client-focused) IB side), the gloves came off.
    • leroy_masochist 8y ago
      That wasn't banking, it was sales and trading. While Birnbaum and the other individuals involved in Abacus acted especially douchey in front of Congress, the point that was apparently lost on many people was that when a market maker sells something off their prop books, they are inherently short that thing
      • FabHK 8y ago
        Plus, when they make a big deal, the trading desk will naturally hedge themselves (that's their job!), so they'll "take the opposite position of what they recommended their client". Sounds bad, but is normal and appropriate business practice.
      • staticautomatic 8y ago
        It's funny that you write are if they're separate companies.
        • leroy_masochist 8y ago
          They contribute to the same company's P&L but functionally speaking they're separate, as specifically dictated by numerous securities laws