The bad news keeps piling on top of Goldman Sachs and other top banks. The latest: Bloomberg reports that Goldman Sachs in particular has angered officials in New Jersey, Wisconsin, California and Florida by recommending CDS transactions that amount to a bet against the states' ability to stay current on bond payments. Goldman is not the only investment firm recommending such a move, Morgan Stanley is as well. The issue has been simmering ever since the LA Times and other outlets reported about such investment advice, even though the firms had made millions underwriting the bonds in the first place. As of late, muni CDS spreads have been widening, reflecting nervousness about state finances.

For more:
- here's the LA Times article
- here's the Bloomberg article

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