StockFetcher Forums · General Discussion · Goldman Sucks<< 1 2 3 >>Post Follow-up
10,157 posts
msg #91365
Ignore johnpaulca
4/18/2010 12:36:43 PM

Source:Thomas J. Bowley

" Adding to the bears' fuel on Friday was the announcement that the SEC is alleging that Goldman Sachs (GS) defrauded investors out of $1 billion relating to mortgage investments. I'm not going into the details of the allegations, but help me with the math here. GS lost $23 per share on Friday, or $12 billion in market cap, because of $1 billion defrauding allegation? Is there more to it than what was provided in the initial news release or was this a complete overreaction on options expiration day? I guess we'll find out soon enough.

But here's the really ironic part of the GS story. GS has market making operations. Does anyone else see the irony in this being announced on options expiration Friday? Let me tell you that prior to Wednesday, the largest daily spread of equity calls traded vs. equity puts traded was 1.5 million contracts. After Intel (INTC) reported better-than-expected earnings on Tuesday, the spread of equity calls vs. equity puts skyrocketed to 2.0 million contracts on Wednesday. On Thursday, that spread was 1.8 million contracts. In other words, options traders have NEVER been so optimistic about the short-term market prospects and when everyone is buying up those calls, who is on the other side of the trade? Well, it's one of the responsibilities of the market maker - to provide liquidity in the marketplace. My proprietary relative complacency ratio hit 29% by Thursday's close. This is a useful sentiment indicator based on equity options trading and it marked the second consecutive day over 25%, which are the only two days it's ever been that high. Relative complacency generally marks tops. I've never seen the market print extreme readings like the ones on Wednesday and Thursday. So now let's discuss the timing of the SEC's Friday announcement. While GS likely stands to be slapped on the wrist at some point in the future for these alleged violations, I can only imagine how much the timing of the SEC's announcement cost all those call buyers on Wednesday and Thursday and helped turn profits at market making units like Goldman Sachs'. Let me just guess that it's more than $1 billion and leave it at that. I'm calling it the 2010 financial bailout, as if they needed another. "

671 posts
msg #91372
Ignore miketranz
4/18/2010 5:18:17 PM

Goldman controls the stock market.After Fridays fiasco,it's a wonder why anyone would ever want to invest in stocks again.Yes,pump & dump on a much grander scale.The rich get richer.They're laughing all the way to the bank.......

10,157 posts
msg #91402
Ignore johnpaulca
4/19/2010 9:18:17 AM

I'll never forget not long ago when Goldman Sachs's CEO Lloyd Blankfein referred to bankers as doing "God's work" after the economic crisis had wiped out a number of Wall Street companies like Lehman Brothers. Well, if cheating investors out of their money is holy work, then one can only imagine what label Blankfein might put on "honest" bankers.

Look, the fact that Goldman may have bilked investors out of a billion dollars is really chump change compared to the way all of Wall Street and banks in general have operated for a long time. Think about it. Once you obtain a bank charter, you pretty much have a license to print money, and with virtually no risk.

Look at it this way. When you make a deposit in your checking account to pay your bills, you don't receive any interest to speak of and the bank takes those funds, often leveraging them up, and invests in a variety of instruments, from government bonds to exotic - and as we've seen, sometimes toxic - securities. If they do nothing more than invest in government bonds, given today's accommodating Fed policies, they will make a handsome profit. And, since the funds you deposit are guaranteed to be paid back by the government in the event of a bank failure, you, being the depositor and taxpayer, are pretty much on the hook to ultimately guaranty the safety of your own funds. How about that?

Now, when a bank starts using your deposits to invest in instruments like Collateralized Debt Obligations (CDO's) and other risky securities, it gives them the opportunity to make even bigger returns for YOUR buck! Of course, if you find yourself in need of a loan and have seen your credit has suffered like so many other individuals over the past few years, your banker won't have any interest or desire to work with you, even though YOU, as a taxpayer, are the ultimate backer of the bank should it fail. How about that one?

The fact is, that most of the banks who received many billions of taxpayer backed dollars in order to stay afloat, did not deserve to be saved. The same banks who are now reporting huge profits - such as JP Morgan who wants to increase shareholder dividends - have no interest in helping those individuals who could really use funds, from small businesses, to individuals who can't find work - even though their own financial houses were in ruins.

One important thing I learned growing up and that I ascribe to as a basic tenet of being a decent human being is to treat others fairly. Tell me how the banks' stacking the cards against the very same people who make it possible for them to succeed is in any way fair? Instead, what we are seeing before our very eyes is the epitome of greed and deception. Maybe Goldman's less than honorable actions are just what we needed to finally expose the questionable practices that took our country to its knees.

Source: John S. Hopkins, Jr.

439 posts
msg #91410
Ignore petrolpeter
4/19/2010 1:47:40 PM

Where's Hank Paulson in all of this?He's the one who chopped Lehman with a samurai sword vanquishing a long time enemy.These banks are much bigger now and can pick America's ,especially Obama's pockets.I would like to see these big banks dissolved and proceeds used to pay off the national debt.All of these evil overhangs would be gone and the market would probably return to normal in about a week.

Doesn't this seem like old fashioned Chicago extortion where Obama admin. demands a fat pay line(Gov. fines and tax)from Goldman to fund his own operations or you know what comes to you next kapeesh.

4 posts
msg #91459
Ignore rjcabernet
4/20/2010 9:52:22 PM

Anyone who did not get to see the Goldman Sucks youtube video before it was deleted, check out the Glenn Beck rendition of it..... it has all the same info:

10,157 posts
msg #91460
Ignore johnpaulca
4/20/2010 10:07:55 PM

Thanks rjcabernet for posting, it makes shorting GS so much more sweeter.

6,396 posts
msg #91872
Ignore karennma
4/30/2010 9:22:59 PM

A Wall Street Broker says F#*&*% You to "the little guy" ...

After reading this ....

Listen to this ...

6,396 posts
msg #91892
Ignore karennma
5/1/2010 9:17:34 AM

I like this guy ... William Black
Check him out on YouTube ...
(this is a longer version of the previous video I posted)
(scroll past the first 3 minutes of Moyers' whining)

4,577 posts
msg #91896
Ignore Eman93
5/1/2010 11:41:53 AM

- Ignore rjcabernet 4/20/2010 9:52:22 PM

Anyone who did not get to see the Goldman Sucks youtube video before it was deleted, check out the Glenn Beck rendition of it..... it has all the same info:


This how this country and most countries are run...... it has always been this way.

10,157 posts
msg #92296
Ignore johnpaulca
5/7/2010 12:41:19 PM

The NYT is reporting that A.I.G. has dismissed Goldman Sachs as an advisor:

“A.I.G., the insurance giant that planned to retain Goldman to help reorganize its businesses, has replaced Goldman as its main corporate adviser, according to three people with knowledge of the matter, which was not intended to be public. Instead, the insurer is turning to Citigroup and Bank of America.
The move is the first in what some analysts warn could be a series of defections among Goldman’s clients after accusations — vigorously denied by Goldman — that it defrauded customers in a complex mortgage investment.”

I don’t buy into the Goldman defections — yet — due to the fraud allegations.

This smells like a little payback for Goldman’s role in the AIG collapse.

Don’t get me wrong, Goldie didn’t kill AIG, the insurer committed suicide. They were were reckless in their embrace of derivatives and had horrific risk management. As noted in Bailout Nation, the head of AIG FP, Tom Savage, actually said “The models suggested that the risk was so remote that the fees were almost free money. Just put it on your books and enjoy.”

So I don’t want anyone to think I am blaming Goldie for AIG’s demise.

But they were the first vulture to arrive at the site of the wounded body, and they began tearing at AIG’s flesh before it was even carrion. Almost $20 billion in transfers took place from AIG to GS — BEFORE their collapse, BEFORE the bailouts. The rest of the taxpayer gift — at 100 cents on the dollar — was simply free money.

So, if you were in AIG’s shoes, and you had an opportunity to kick Goldie when they are stumbling around a bit — why wouldn’t you give them a swift knee to the groin?

Payback is a bitch . . .


Love it....what goes around comes around.

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