The backdoor funnels of taxpayers’ money used to bolster banks’ share prices allowed Goldman Sachs to issue $5 billion in equity last month at what a cynic might call “artificially high valuations.” You have to hand it to Government Sachs (a moniker we believe fits like a glove given the almost seamless blending of the bank and the feds). This double-teaming is a great way to run up a stock.

On March 4, GS shares hit a low of $73.95. By April 13, they had risen to $130 – a gain of 75% in just five weeks. This allowed Goldman to price its $5 billion share sale at $123/share.

It also allowed the bank to reduce the dilution to its shareholders by 40%. In other words, GS only had to issue 60% of stock at the $123 price than it would have been forced to do at about $74/share.

As China-based securities analyst Ben El-Baz recently pointed out on Seeking Alpha:

Anyone who thinks this is just plain good luck for the financial giants at Goldman should probably avoid investing in the stock market. The big players have immeasurable influence, and this needs to be understood by small investors trying to gauge what’s going on.

El-Baz rather generously calls this “finessing” the markets. It’s certainly one way of putting it.