Editor's Note: If you want to read it like it is, you need to follow Karl Denninger. He prepared a piece titled Goldman (and other banks') "Hedges" - What Karl points out is just how easy it was for Goldman Sachs to rip off the system or at least work within rules that filled their pockets with money they claimed . . . not to be material. Here is an excerpt from Karl's piece.
Because if that's how Goldman hedged they got paid twice and the taxpayer literally got robbed.
Someone in Congress needs to look into this now; there are already rumblings of investigation. Those rumblings need to get a lot louder and turn into subpoenas, not "polite inquiries."
If in fact Goldman (or anyone else) was "hedged" against a possible credit loss from their CDS with AIG and they were able to collect on that hedge (no matter what it was) those payments through AIG need to be clawed back immediately as nobody is entitled to be paid twice for the same risk and reap what amounts to a windfall profit by quite literally engineering a multi-billion dollar transfer of funds from the Taxpayer to the firm!
This is not small potatoes either - we're talking $100 billion+ in aggregate with these various banks on a worldwide basis.
We the people deserve answers on this right now and if persons in our government handed these banks $100 billion dollars of our tax money for what was a covered bet, allowing them to collect twice on a risk that had not yet been realized (when at most they were entitled to collect once via their private hedging activity) every single person involved in that scandal must be immediately removed from office, prosecuted if possible, and every nickel of those funds must be clawed back by whatever means are necessary.
Read the full article - Goldman (and other banks') "Hedges"
Your talking down Goldman Sachs and, at the same time, shorting the stock.. Hmm, I wonder if you have an ulterior motive for having this blog.
ReplyDeleteShort sellers should be put in jail for what they do to companies.
I'm not a big fan of Goldman or any other bank for that matter. They're economic vampires. But short sellers are, in my view, the scum of the earth..
I just discovered your site today ; even from France we can consider your role to contest the power of a handful of big players such as Goldman Sachs is extremely sound for our democracies.
ReplyDeletePreventing our societies from any oligarchy must be encouraged; big financial institutions are probably among the most developed ones.
salutations.
FG
PARIS
Mike
ReplyDeleteAre you going to be in on the conference call after GS reports first quart earnings?
If so, ask them how much of their record profits originated from AIG, or any other conduit of taxpayer money.
Also, looks like your blog is going viral after the lawsuit - ( LOL @ dumbf*ck lawyers)
Thanks, Mike.
ReplyDeleteKarl's TickerForum is aware of your plight and message.
Expect some more help to come your way.
Keep up the good work. You're not alone.
Keep exposing them!
ReplyDeleteIm gonna put up an article about Goldman Sachs trying to remove your website so you get more views.
Anon @ 5:54, do you understand short selling in the least? Are you perhaps confusing naked short selling with ordinary short selling?
ReplyDeleteanonymous short selles the scum of the earth ? LOOL
ReplyDeletefor you information short sellers exist since the markets exist - that is for more than 300 years now (stock markets) - and for that time there was ALWWAYS short sellers, and never we were in a position like this... so you now tell us the problem is short sellers? yeah sure...
I LOVE this site. It's exposing what I've felt all along; Goldman is too close to the Government, the bailout was NOT a bailout of AIG but a bailout of it's trading partners (specifically Goldman). Paulson totally gamed the systems for his former firm and it's partners.
ReplyDeleteEnough is Enough. Shut these guys down, take back the US Taxpayers $$.
To salvador,
ReplyDeleteHuh. So short sellers a hundred years ago (or even 50, for that matter) had the massive, market-shifting capitol behind it that these black box hedge funds have? Come on. That's like comparing a pea-shooter to an M-1 Tank.
If you think the balance of power hasn't shifted, then you're missing the larger point.
Short selling of TARP recipients was suspended for awhile; I didn't keep up with it. The point being that Fed/Treasury/SEC was keeping it controlled. Short selling is a problem ONLY if it is being done for criminal manipulation otherwise it is part of the game. Goldman sells short ONLY to manipulate. The problem isn't shortsellers. It is partly shortselling by Goldman to manipulate both the low side and the high side. But that is only one symptom of the very large problem we face.
ReplyDeleteThere is more than enough probable cause to indict Goldman and its executives with fraud under several sections of Title 18 (the Federal Criminal Code). Congressional investigations are shams. They produce absolutely nothing and they make criminal prosecution difficult.
As a former foreign exchange dealer I often heard the expression that “trading is a zero sum game”. That is for each trader who has a gain there exist a trader with equal and offsetting loss. The net gain to the system is zero (i.e. energy can neither be created or destroyed). I always replied with the caveat that “as long as the Federal Reserve stays out of the picture” -- as the Fed can always print new money.
ReplyDeleteI am reminded of this fact in the continuing saga of the AIG case. As a risk manager I find it so unbelievable that risk manager would expose the firm to financial risk that would far exceed that capital capabilities of the firm. The size of the losses are just so staggering. With some of the smartest people around running these firms I now believe that this risk was deliberate and intentional.
Consider the risk managers of Goldman Sachs, Deutsche Bank and other financial institutions firms whose bets are on the other side of AIG’s derivative transactions. How could the credit (not financial) officers of these firms allow such a massive counter –party exposure to AIG’s balance sheet? Clearly they know that AIG could not possibly fulfill the obligation if the bets went sour. While our political officials skew AIG for lack of financial controls, why are they not investigating the counter parties’ lack of credit controls? Both parties must be equally guilty and each has equal and offsetting risk.
It is often said that if an event occurs that is so improbable then something more sinister must be happening. These traders and not idiots;they are high educated and intelligent. I believe that the traders of AIG were in collusion with traders at Goldman Sachs, Deutsche Bank and etc and that they knew that if they were all in too deep in this mortgage fiasco and they needed a solution. These firms essentially bet that if they can chose a fall guy, AIG, then they can be assured that the Federal Reserve would have to step in to prop up the market. The traders of the failing firms would be assured new jobs and bonuses at the surviving firms.
An Inconvenient Truth
ReplyDeleteWhile our political leaders have been busy this past decade passing laws that circumvent the United States constitution, supposedly in an effort to protect “WeThe People” and our way of life from terrorist attacks
These same leaders have through neglect of oversight of financial entities and outright fraud have caused more harm damage,suffering and heartache to our country that any 10 terrorist attacks could have.
Goldman hedges (shorts) AIG to guarantee they get taxpayer moolah (through AIG) to post obscene profits to hook more suckers on an offering to "give" back the tarp dough to expose the weak hands so they can snap them up with our money. Buncha crooks.
ReplyDeleteGoldmanSachs666 is a dis-info site put up by Goldman, to tell us all the obvious facts, that we already know, thereby distracting us from the real conspiracy of GS crashing the market in 08!
ReplyDeleteHere is how I see it.
1. GS shorts the ABX(subprime) in 07. Makes a Billion or 2. Sends a ripple in the markets.
2. GS men at the Exchanges raise margin requirements forcing massive liquidation in JULy 07, not to mention cornering the oil market.
3. GS men at the SEC raise margin in 08, lower regulation increasingly over entire tenure.
4. There man Hank Paulson took Lehman in the other room, executation style. That really got things rolling (downhill)
5. Then, GS influence at Mood'yS(warren buffet) slashed AIG rating forcing them to find Billlions overnigth,
6.Then Hank Pauslon shows up with his $700 Billion ransome note. After stock markets crash around the world for 10 days, congress gives the big five banks their money.
7. Jim Cramer, former partner of GS, after watching the market crash for 10 days, tells America to sell everything. If we see a rally this year, you know Cramer is in on it
8. Rubin was a trojan horse on Citi's Board, encouraging them to get long and heavy in realestate.
9. AIG and Citi were made fall guys from the beginning, "to big to fail" was the plot
10. It's possible that GS even inflitrated Freddie and Fannie. It's obvious IndyMAc was a front to push liars loans.
I agree that Goldman and JPM Chase are the corporate face and major players in this world- cartel banking structure that is "The Federal Reserve". The freedoms we have forfeited since 1913 by way of a monetary regime that is neither “Federal” nor holding any “reserves” is disgusting. Early on in this post 1913 shell game, even Henry Ford once quipped, “It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.” So, now that more people ARE understanding "it"…we lucky few must lead the charge...let's roll!
ReplyDeleteTwo things I will proffer on "rocking the bestial power structure":
1) Buy gold and silver bullion to protect yourself and your family from the coming annihilation of the USD$, the world reserve currency to be replaced (in est. 1-3 years_ by some new world currency cocktail. Given the actual above ground world “supply” which is miniscule in comparison to a mountain or essentially “worthless paper”… this simple action will also help speed the demise devaluation of a “dead man walking” US currency.
2) Despite the temptation to do so…do not make trades based on ideology. For instance, TODAY…I would buy Goldman and JP Morgan Chase, not because I like them...but because on the short term, they are relatively cheap AND too big to fail as evidenced by the bail-out money they are socking away...and stealing! - However, AT THE RIGHT TIME IN THE FUTURE…I would short them with total impunity AFTER this huge short covering bear market rally runs its course.
We, the bloggers- the informed minority must educate through our actions- the enemies of the Fed are gold and silver- as well as the very existence of free markets.
It's 2009, and sadly, we no longer have “free markets”…but we can move the ball in that direction by further removing more “supply” of gold and silver off the primary market through steady and increasing private accumulation.
If the trend is up for Goldman and JPM Chase (and it now is) then you should intelligently make money on the long side of these self same "evil" companies- Then. when these "evil" companies top...You sell! Last, (if you are so lead,) plow a portion of your tangible “profits” back into education and causes that are working to expose the Federal Reserve's covert agenda!
And one last thing...who are "they"? Who does Ben Bernanke work for? Who is watching the “Watchman”? Simply WHO is the Watchman? The Illuminati? CFR heads? The Rothschild's Schiff's...others? What PROOF can be presented? I want NAMES! Seriously….who are THEY? If you know...please share with me and other readers here...because it past time that these “financial vampires” be dragged out into the light to answer for their deception and duplicity!
And one last thought…by some miracle…of the Federal Reserve cartel is upended and vanquished…pray tell, what new “system” replaces it? New greenbacks? Backed by what? And who exactly controls the new “what”? Would it be a bloodless velvet FINANCIAL revolution scenario? Who is thinking about what comes after what “might” {by some miracle of “democratic grassroots creative destruction”} come next? It would be a shame to win…only to be sucked into a vacuum of dysfunction because the new “alternative” was being developed by a Congressional committee?