The Twilight of Goldman Sachs

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Goldman Sachs was once legendary for its trading prowess.

The traders were so admired and envied on Wall Street that people were convinced they had some kind of edge over their counterparts at other firms.

The theories varied, depending on who you asked. They were front-running hedge fund clients, manipulating markets, or using government connections to game policy. Other folks just thought the Goldman traders were smarter than every one else. People said that Goldman was a hedge fund disguised as an investment bank.

That all changed after the financial crisis.

Lawmakers passed rules to clamp down on proprietary trading by regulated banks. Goldman (NYSE: GS – News) reorganized itself to be, or appear to be, more client oriented, shutting down some internal hedge funds and eliminating proprietary trading desks. Trading at Goldman was no longer supposed to be about Goldman betting its own money, but about Goldman servicing client orders.

Whatever it was that once made Goldman the envy of Wall Street traders seems to have taken flight.