No good deed goes unpunished, as the saying goes.

One of the more surprising things about accusations that Goldman Sachs created a CDO specifically so that Paulson & Co could short via the instrument's credit-default swap, is that Goldman Sachs could do something so utterly nice for someone else. Better still, for one of its hedge-fund clients.

Such an act of unmitigated decency for a hedge fund, should make Goldman Sachs a shoo-in for AsianInvestor's Best Prime Broker title (not that we're suggesting it will, mind you).

So how could such client-focused proactivity cause such misunderstanding?  

Well, there are plenty of other commentators who love to bash Goldman, and they will be droning on about whether it is ethical to create a mortgage-related product for one set of clients to buy, at the behest of other clients who want to short. 'Ethics' is not this correspondent's area of personal expertise, so read about the morality of it elsewhere.

What is a problem for the alternatives industry is that hedge funds have been tarred with this brush. For the duration of the crisis, we have been able to depict hedge funds as being unconnected with systemic risk and say that their shorting activities are healthy expressions of a free market, while seeking to drive honest Lehman Brothers execs like Dick Fuld and Joe Gregory out of town.

Now hedge funds have shown to be in it for the dough, and apparently such money-grubbing is slightly distasteful and vulgar.

Not only that, but they have been caught in flagrante delicto 'leveraging the brand' of Goldman Sachs, the world's most successful money-making machine. In the past that would have been a good thing, but nowadays, well, perhaps not so much.

The good news:
Tomorrow, Goldman Sachs will have a queue a mile long outside its doors of new prime-broking clients who want them to share their short-time love.

The bad news:
Hedge funds were in it for the money all along.