Is Goldman Sachs just a big, risky, US-backed hedge fund?

Goldman Sachs, the biggest US investment bank, is back making a billion dollars a month, same as it was in 2007. Its share price is back in the $160s, same as it was before Lehman Bros. blew up.

Is that a good thing? Depends on whether you see Goldman as America's premier dealmaker whose health is important to getting American business moving again - or as a giant hedge fund that's taking bigger-than-ever risks, now financed with public money, writes Bloomberg's Christine Harper here.

What's so special about Goldman? Unlike rivals Citigroup, JPMorgan Chase & Co., Bank of America Corp., at Goldman "only millionaires can open checking accounts...

"Goldman Sachs exists to serve large corporations, governments, institutions and wealthy individuals. It makes money for them and for itself by trading assets ranging from stocks and bonds to oil futures and credit derivatives. In the first nine months of 2009, more than 90 percent of the company's pretax earnings came from trading and principal investments, which include market bets, stakes in corporate debt and equity, and assets such as power plants."

How the US helped Goldman: "The 140-year-old company received $10 billion in capital, guarantees on about $30 billion of debt and the ability to borrow cheaply from the Fed. The Fed's bailout of American International Group Inc., and its decision to pay the insurer's counterparties in full, funneled an additional $12.9 billion to Goldman Sachs."

What the US got from Goldman: "Goldman Sachs repaid the $10 billion it received in October 2008 from the U.S. Treasury's Troubled Asset Relief Program, and taxpayers got a return: $318 million in preferred dividends and $1.1 billion to cancel warrants to buy company stock the government was granted. Goldman Sachs says that's a 23 percent annualized return for U.S. taxpayers."

How the US is still helping Goldman:  "Other forms of support linger. By the end of September, Goldman Sachs's $189.7 billion of long-term unsecured borrowings included $20.9 billion guaranteed by the Federal Deposit Insurance Corp. under a program started in October 2008 to unfreeze credit markets."

Most important: "The Federal Reserve agreed on Sept. 21, 2008, to allow Goldman Sachs and smaller rival Morgan Stanley to become bank holding companies, giving them access to the Fed's discount window and granting them a cheap source of borrowing traditionally reserved for commercial banks...

"Those benefits, along with a drop in the Fed's benchmark borrowing rate to as low as zero, have slashed Goldman Sachs's interest costs to the lowest this decade." So in the three quarters of 2009 reported to date, even as its debt has grown, Goldman's interest costs are down more than 80%, to $5 billion, from $26 billion a year earlier, making it cheaper and easier for Goldman to raise its bets in all markets.

Goldman denies it's a hedge fund; spokesman says "we are in business primarily to facilitate transactions for our clients, and over 90 percent of our revenue and earnings come from doing that."

But Harper shows Goldman's "fixed-income, currency, commodity and some equity trading" which Goldman does with, for and against its clients "blurs the line between client-driven transactions and proprietary wagers."