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Now, it may seem funny that I'd single out Goldman Sachs (NYSE:GS) as my pick for the world's scariest stock, since just more than a week ago I fingered Goldman as the bank I'd be most interested in buying.

Am I completely contradicting myself? Hardly. Something can be scary and attractive all at the same time. (Lady Gaga, for instance.)

Goldman may not be lighting up the music charts with catchy tunes, but it's been lighting up the earnings picture with massive profits. The company's apparent prowess in navigating the dark alleys of the trading world gives it a unique attractiveness in the financial industry. As long as the markets are trending up, it's hard to doubt that Goldman will continue to churn out cash.

At the same time, Goldman's business chills me to the bone. It may be the company most representative of one of my favorite topics -- the lack of change in the world of finance following the recent crisis. Goldman may even be scarier than the much-derided duo Citigroup (NYSE:C) and Bank of America (NYSE:BAC).

The cloak of darkness
When we talk about lack of transparency in the banking sector, we could just as easily be talking about JPMorgan Chase (NYSE:JPM), Morgan Stanley (NYSE:MS), or Citigroup. But of the entire sector, Goldman is probably the bank that most typifies massively profitable cloak-and-dagger trading operations.

Take the company's most recent earnings report, for instance. Goldman reported more than $12 billion in net revenue and $3 billion in profits during the quarter. Where did it all come from? A mere $1.9 billion of Goldman's revenue came from its investment banking and asset management businesses -- operations that are somewhat easy to understand.

For the $10 billion that came from trading and principal investments, we get shrouded statements like "strong performances in credit products and mortgages" and "strong net revenues in derivatives." They might as well say, "We did something that we're not going to tell you about, it worked out well, and we made a lot of money." I'm not holding my breath for a more detailed rundown.

Transparency is far less of an issue when it comes to nonfinancial companies like Wal-Mart (NYSE:WMT) or Research In Motion (NASDAQ:RIMM). We can easily understand trends in purchasing at Walmart stores, or the competitive environment that RIMM's BlackBerries are facing.

But what of Goldman's opaque trading operations? What exactly are its brokers doing to make those massive sums? Is the profit it's pumping out sustainable? Is it even legal? Now that we've seen how horribly wrong shenanigans in the financial world can go, a teeth-chattering reaction to Goldman's secrecy is much more understandable.

If you're Edgar Allan Poe, fear of the unknown is a great thing. But if you're an investor in one of the world's largest financial companies, it's far less desirable.

Blood money?
Closely tied to those opaque trading operations are the huge sums that Goldman Sachs employees are paid. During the third quarter, the company set aside $5.4 billion for compensation, which works out to almost $155,000 per employee -- for that quarter alone.

I don't have a problem with good employees being paid large sums for value-added contributions to the business, but do we even know that's the case? Does Goldman really have an eye toward building long-term value for shareholders? Or is it simply rewarding its people for making as much money as possible right now -- regardless of how they make it.

This quarter's compensation line works out to about $620,000 per employee for the whole year. That's an awful lot of money, and I'd bet that there are a lot of people who would do a lot of scary things to get their hands on that kind of cash.

Conspiracy theorists unite
And I'd be remiss if I skipped over the immense political connections at Goldman Sachs. We could, of course, look at this from the perspective that the company would prefer: It's a civic-minded business that encourages its employees to take government positions after they leave the company. But can we really overlook the huge benefit that government-employed alumni give the company?

Goldman alums include former Treasury Secretary Hank Paulson; former Treasury Secretary Robert Rubin; current Treasury Secretary Timothy Geithner's chief of staff, Mark Patterson; Geithner advisor Dan Jester; Paulson advisor Kendrick Wilson; former TARP overseer Neel Kashkari; Undersecretary of State for Economic, Business, and Agricultural Affairs Reuben Jeffery; President of the Federal Reserve Bank of New York William Dudley; former George W. Bush Chief of Staff Joshua Bolten; World Bank President Robert Zoellick; and the list goes on and on.

Savvy moneymaker or scary specter?
Has Goldman Sachs unjustly been vilified, or is the company more frightening than a real-life version of the Saw movies? Jump down to the Motley Poll below and make your call.

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