Discuss why Goldman Sachs was a disciple of Albert Carr's theory of "business is a poker game and we are all bluffing."
Students should discuss the "toes to the line" approach of Goldman on analysts vs. strategists and sophisticated investors. Also, Goldman managed to interpret the law so that it did not disclose its position in the Abacus deal nor did it disclose until AFTER the collapse of the market that it was taking positions against those of its clients. Goldman also did not disclose its role in setting prices in the auction-rate securities markets. The students should discuss whether this was a card up the sleeve or whether this was simply bluffing. The case indicates a split in views between Goldman and outsiders on whether they behaved ethically and honored their fiduciary duties. The case is, therefore, a classic illustration of one of the flaws in Carr's theory – we all don't share the same perception as to what is bluffing and what is a card up the sleeve.
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