1) The stock-market itself is theoretically a zero sum game. So regardless of the instrument being trade someone is always betting against a trade. ex. over and above a long/short combo, even if person X is going long and person Y is booking profits. Person Y is theoretically betting against X.
2) GS is a clearing house among other things. Hence there is a high probability that on any given day they have hundreds of transactions that are long/short withing the same client pool.
3) Most transactions take place on a level 2 platform, i.e. the maximum someone can see if which company cleared the transaction, not which client etc.
4) Even if it is the same advisor, it would be illegal to disclose the transaction details of a client to another client.
5) I have never come across a retail investor that invests in CDOs and other exotic instruments.
6) There is a difference between hedging and naked/un-hedged trade. If someone is smart enough to be willing to trade an exotic instrument in the later category they better have the ball s to take ownership of the losses.
7) I wonder if people would have whined at all if GS did not make money on the hedge, since that happens in the majority of cases. Even in the case of GS. Like a number of other activities/sports a 30% win rate can be awesome.
8) This article is baseless is theory and practicality...
Because(Opinions):
a) Either they are trying to say, hedging should not be allowed. If it should be allowed the ones hedging should not make a profit(??). If they do make a profit they should feel sad about it.
b) If making a profit is a bad thing then, I guess they are trying to promote a way to eliminate losses. If thats the case I wonder what they would like to do. More bailouts or close the stock markets completely.. what would be the use if no one should make a profit??
c) I guess to make the article/issue clearer the next thing they could say is underwriting of any kind is also an illegal practice, since the institution assuming the risk is only entitled to risk and losses, go forbid if they make a profit, well we can see GS getting bashed for now :)
d) Anyone who lost money, even if they were GS's clients ought to have done their own due diligence too, if the people investing do not understand the inherent risks involved with doing business they are better of staying away from the markets as much as possible.
e) lastly, IMO the intent of this article is not to do anything but upset people who lost money or know someone close to them who lost money (includes all most everyone)to help gracefully without opposition let others implement speculative unhedged measures to curb speculation, hedging, profit making, angel funding etc..
Cheers!!