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Goldman Sachs (GS) will lose the case the government is bringing against it.

 

If there were a betting line on the trial of the Securities and Exchange Commission vs. Goldman Sachs, the SEC would be the overwhelming favorite.

That's because unless Goldman gets a jury of its peers who live at 800 Fifth Avenue, the people who will debate the evidence most likely will side with the government. How could they not? When you have the government vs. public enemy No. 1, who would you think gets the benefit of the doubt? Who on Wall Street do you think is guilty until proven innocent these days, least of all the firm that President Obama and the SEC seem to love to hate?

 

Tight consumer spending has hurt all areas of the economy -- including the beer business. Once thought of as recession-proof, alcohol sales have suffered along with just about everything else. 

 

But 7-Eleven is defying the sales slump with the launch of its own private-label beer called "Game Day," produced by City Brewing of Wisconsin. Privately held 7-Eleven is mum on the details aside to say the beer is a premium offering with a budget price.

 

So will consumers pop the top, or is this a venture that's doomed to fall flat as beer sales have suffered in the last year?

 

 

Soon after passing one hurdle and getting approval from the Commodity Futures Trading Commission, movie-futures trading hit a snag in Congress.

Sen. Blanche Lincoln, D-Ark., who oversees the commission and is chairman of the Senate Agriculture Committee, on Friday added a provision to financial reform legislation that would ban the commission from licensing firms to offer trading based on box office receipts.

Lincoln unveiled a new version of her proposed Wall Street Transparency and Accountability Act that includes a movie-futures trading ban.

Lincoln's proposal was praised by a coalition

 

A picture is worth a thousand words -- and in the case of a select few growth stocks, 1,000% or more.

 

If you want to understand why a stock generates these sorts of gains, look no further than helpful visual of Wal-Mart's growth since its founding in 1962.

 

The graphic is stunning in its telling of the Wal-Mart (WMT) story. From very humble beginnings in Arkansas, the company executed a very careful expansion strategy based on proximity to its first locations.

 

• Three earnings breakout stocks for the second quarter

 

That story was repeated by other companies, including Starbucks (SBUX), McDonald's (MCD) and Home Depot (HD), that also generate huge returns.

 

How expensive (or cheap) are stocks right now?

 

That's the question that scores of strategists and pundits have been trying to answer lately, and they are coming to a variety of different conclusions. That's not surprising; valuing the broader market is, in fact, always tricky because of the array of methods you can use. Even within the often used price/earnings ratio there are a number of possibilities -- do you use trailing 12-month earnings? Projected earnings? Five- or ten-year average earnings?

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But one perspective I found particularly intriguing came this week from Jeremy Siegel, the Wharton professor and Stocks for the Long Run author. In an interview with Knowledge@ Wharton, Siegel said investors need to take into account that we're coming out of a deep recession when they value the market. Right now, he said, stocks are selling for about 15.5 times projected 2010 operating earnings -- about the historical average. But coming out of recessions, Siegel says, the average market P/E for the next full year has historically been about 18.5. "That’s why I still think there is room for stocks to run up,” he says.

 

Siegel's not the only guru I follow who believes that -- though there are certainly others who disagree.

 

 

By Jim Cramer, TheStreet

 

If Goldman Sachs (GS) owned a piece of Abacus, it is hard for me to believe this case is as open-and-shut as the government is making it. Yet that is my understanding of the situation. In other words, what is Exhibit A against the government's case? That Goldman believed in the paper itself.

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I also think that there is simply an important issue here that the government is leaving out. Goldman does not sell washing machines. They do not sell vacuum cleaners. They sell pieces of paper that are fully disclosed, and you can go long or short them based on the info. There is no guarantee. There never has been.

 

The Securities and Exchange Commission has charged Goldman Sachs (GS) with securities fraud, and the whole market has sold off. 

Friday afternoon, the Dow Jones Industrial Average ($INDU) was down 126 points or 1.1%. The Standard & Poor's 500 Stock Index ($INX) was off 1.6%. Goldman's shares tumbled 12.8%.

• Video: How to trade on Goldman scandal
  

What is the SEC charging and why is this such a big deal?

 

By Dan Freed, TheStreet

 

The American public wanted a head, and its president finally delivered what may be the only one that would suffice.

 

No single firm can be said to symbolize Wall Street in the mind of the public as much as Goldman Sachs (GS), which was accused of fraud by the Securities and Exchange Commission Friday.

 

Whatever corporate America may think, President Obama wasn't looking to make Wall Street CEOs into his enemies. If that were his mission, he wouldn't have hired Tim Geithner as his Treasury secretary. Geithner likes to brag about how he has never worked on Wall Street, but a profile of Geithner by Gary Weiss makes the best case I have seen that Geithner was a tool of the big banks he was supposed to regulate as New York Federal Reserve chairman.

 

Just when lawmakers were starting to recover from the health care battle, along comes another hot-button issue: Wall Street reform.

Democrats have been working on legislation that attempts to more tightly control the financial industry -- hoping to avoid the reckless behavior that helped bring about the mortgage-fueled crisis of the last two years.

Now, all 41 Republicans in the Senate are united in blocking the Democrats from bringing the legislation to the Senate floor. Sen. Harry Reid had planned to bring the bill for debate and to add amendments, The Huffington Post reports.

This is a tough spot for Republicans to be in, 

By Heidi N. Moore for The Big Money

 

Can money be made on Wall Street without manipulation? These days, if you believe it can, you're in lonely company.

 

Take the remarkable example of the Securities and Exchange Commission's case announced today against Goldman Sachs (GS). While Goldman headlines are as rare as air molecules, the Securities and Exchange Commission nonetheless got everyone's attention with this one: "SEC Charges Goldman Sachs With Fraud in Structuring and Marketing of CDO Tied to Subprime Mortgages."

 

Here's what the SEC alleged: that Goldman Sachs helped create a type of security based on subprime mortgages that was designed to fail, and didn't tell investors the details in any of the documents it used to sell the thing. That's a big offense. Here's how it worked:

 

The vampire squid is in serious hot water. Goldman Sachs(GS) gets hit with a major lawsuit and fraud charges by the U.S. Securities and Exchange Commission.

Market Dispatches has the dirty details. And it seems like everyone has come out to comment on the matter.

Here's what some notable voices are saying today:

Weak case? Henry Blodget thinks the SEC's case is actually kinda weak. 

By Robert Holmes, TheStreet

 

Goldman Sachs (GS) shares tanked Friday, dragging financial stocks down, after the Securities and Exchange Commission accused the bank of fraud.

 

Goldman Sachs plummeted 13% to $160.29 after the SEC charged Goldman and one of its vice presidents for defrauding investors by failing to disclose to vital information about a synthetic collateralized debt obligation, or CDOs, tied to the performance of subprime residential mortgage-backed securities.

 

"The product was new and complex but the deception and conflicts are old and simple," said Robert Khuzami, the SEC's director of the Division of Enforcement.

 

 

By Laurie Kulikowski, TheStreet

 

Citigroup (C), which reports first-quarter results on Monday, has been cleaning up its balance sheet and catching up to other banks. But now that it's battled back, where does it go from here?

 

The improvement began in early March when a number of respected voices, notably fund manager Bruce Berkowitz and independent research firm CreditSights, made favorable comments about the company. The trend has continued on the success of the company's Primerica (PRI) initial public offering. 

 

Bank stocks in general have outperformed, buoyed by the perception that the economy is on stable ground, and Wall Street's belief that credit costs reached an inflection point in the first quarter.

 

After steep declines in February video game sales, we learned late this week that March video game sales were up 6% over last year, breaking the steep declines seen after the holiday season.

According to the NPD Group, video game sales hit $1.52 billion for the month and featured a more than 10% jump in video game software sales -- much better than the +3% gain that was expected.

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Some folks were surprised by this -- but that’s because they don’t know the industry.