By Pam Martens: June 21, 2012

Goldman Sachs put out a research call today recommending shorting the S&P 500, which is synonymous with shorting America. That’s gratitude for you.

As you might recall, it was a mere four years ago when the U.S. government bailed out AIG to the tune of $182 billion and $8.1 billion of that flowed to Goldman Sachs. Goldman had used AIG as a counterparty on credit default swaps. On top of that, Goldman received a $10 billion TARP loan from the U.S. taxpayer. And then there was that $69 billion that Goldman secretly borrowed from the Fed on December 31, 2008, unearthed only because Bloomberg News filed a Freedom of Information Act (FOIA) lawsuit.

Within a week of Lehman Brothers’ collapse, the Federal Reserve wrapped Goldman in its loving embrace and made it a bank holding company. Goldman owns an insured depositor bank called, what else, Goldman Sachs Bank USA. Here’s how its web site describes it:

“GS Bank accepts deposits, lends to individuals and corporate clients, transacts in derivatives (including interest rate, credit and foreign currency products), and provides securities lending, custody and hedge fund administration services. [Note it’s trading derivatives in the insured bank. Didn’t we just hear a lot of bad stuff about that?]

“GS Bank deploys capital to help transform distressed communities into sustainable and vibrant neighborhoods of choice and opportunity.” [It’s doing God’s work — again.]

So we have an FDIC insured bank that is required to take all due measure to ensure the safety and soundness of the banking system, whose parent is putting out a call to short the market, driving down the price of bank stocks knowing full well that ratings downgrades on major U.S. banks were imminent from Moody’s. (According to the Wall Street Journal this afternoon, those downgrades could come within the next 24 hours.)

The next time Goldman needs a handout, I can think of a mono syllable reply from the taxpayer.

Below is the full short recommendation from Goldman Sachs, as reported by the Wall Street Journal:

We are recommending a short position in the S&P 500 index with a target of 1285 (roughly 5% below current levels) and a stop on a close above 1390. This morning, the Philly Fed print of -16.6, down sequentially and worse than expected, provides further evidence that weakness has extended into June.

Although yesterday’s FOMC delivered easing as expected, with a dovish statement, positive risk sentiment ahead of the FOMC had already buoyed markets. And we now think, with incremental US monetary policy on hold, the market will need to confront a deteriorating growth picture near term.

The risk to our recommendation is that the data soon reverts to the 2-percent growth path our economists expect, that China growth turns, or that European policy-makers’ rhetoric buoys risk sentiment further from here, with the upcoming end-of-June summit a focal point on this count.