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The End is Nigh: How Goldman Sachs Triggered the Apocalypse
In case you’re wondering, that whistling sound you hear is the sky falling. When Erin Burnett stays late to host a special report on something, you know it’s a “game-metamorphosizer”. Why else would all bank stocks tank because a firm they’re not affiliated with was charged with non-criminal fraud in one transaction after months of SEC digging? Why else, at this very moment, are traders in Tokyo and Hong Kong counting down the minutes to when they can sell every last security on the planet ahead of the rest of the world this weekend? Why else would the price of gold – the ultimate refuge in times of uncertainty – be falling?
The simple fact that the market knows is that there is no uncertainty: Armageddon is upon us, and thus all the gold in the world has no value.
In its infinite wisdom, the always-rational, level-headed market knows that Goldman is finished once and for all. In fact, it’s already just a memory. A civil case whose maximum damages, including treble damages for fraud, are $3B could easily bankrupt a firm that had only $45B in revenue last year. Especially since there’s no chance this case will be settled without a trial for a small fraction of that amount. Why else would the only Google search term related to GS that’s more popular than “Goldman Sachs fraud” be “Goldman Sachs careers”? Everyone knows that the imminent liquidation will require lots of manpower and overtime. And even if, by some miracle, GS emerges from the SEC and inevitable investor litigation without resorting to Chapter 7, no one will ever do business with them again, which will cut their revenue to $0.00, which will require them to resort to Chapter 7.
And GS deserves to be destroyed for this particular transaction. To put their egregious behavior in the complicated CDO market in perspective, let’s break it down in terms of equities:
Let’s say a sophisticated investor – call him “Johnny the Jackal” -- tells an investment bank – call it “Dewey Goldmanthem & Howe” -- that he thinks a select group of stocks in the Russell 2000 index is a real dog. He asks the investment bank to create a new ETF that tracks the performance of the stocks he selected so that he can short it. The investment bank agrees, takes a fee, and unveils the newest ETF, the “Bow Wow 30” (ticker symbol: WOOF). Now let’s say a second sophisticated investor comes along – call it “Head-Up-Our-Ass European Bank” -- and says they believe the Bow Wow 30 represents the best companies on earth, and they want to go Hail Mary long. Even if DG&H doesn’t have a crystal ball, and even if it’s not sure which way the Bow Wow 30 is heading, it has a make-believe fiduciary duty under the pretend law to tell Head-Up-Our-Ass European Bank that there’s another investor who thinks the Bow Wow 25 is flea-ridden. Sure, Head-Up-Our Ass has analysts, lawyers, consultants and accountants who could do their homework on the companies in the Bow Wow 30, but it’s up to DG&H to tell them Johnny the Jackal knows better than them. That’s why every time you want to buy a security your broker sends you a list of all the people who've shorted it. GS broke the law because it didn’t provide the short list.
In addition to being the polite thing to do, this rule serves the important public policy of dissuading potential investors from investing whenever another investor disagrees with their judgment. The efficient functioning of the capital markets is all about no one buying when someone else wants to sell and no one selling when someone else wants to buy.
Not that politeness, public policy or capital markets matter now that the end of days is apparently Monday. (Unless you live in Asia, in which case it’s Sunday). Time for everyone to get their affairs and souls in order.
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no, that wasn't me.
just doesn't stop.
you probably figured out i am always late to the party.
a bagged babe, kiss kiss.
i was disappointed in regards to the ipad piece. no one commented on me trying to use the vibrator app on my iphone. doesn't work. seriously!
http://www.woodycreekcellars.com/VeloBabe.html
oh wait, i am the party†
an absolutely brilliant piece, only at ZH
+1
agreeed - the only thing you can hope for is to bring back the glass steagall
but thats closing the barn doors after every animal left and it burnt down already too
There is no way the government is going to reverse their position on glass steagal
They are too fuckin stupid...and were paid way too much to get rid of it....
Some of you need to take a chill pill and appreciate the lost art of satire. Mr. Ben Dover III had me bending over laughing hard, but at the end of the day, I am still buying this dip!
with your money? Ah hell, its only paper, go ahead . Monday , like past mondays will be up.
Right? LOL
I give this clown one (hind) leg up
Are you guys too daft to realize this is a joke? Or am I missing out on more sarcasm?
I'm not the brightest bulb in the room by any means, but my impression is that the post is intended to poke fun at those who believe that the GS story is serious, and that some of the comments on here are in disagreement with the premise of the post. Please feel free to correct me if I'm wrong.
You are correct. And if this case coming from the, according to William Black, completely and hopelessly outclassed SEC fails in court it will completely blow the credibility of the SEC and any case which that effectively useless agency brings to court, assuming that any more are brought. Thus, the games that got us here and which will completely destroy us at some point in the future will be fully legitimized.
If the neon blue zapper light goes off in the middle of the night at a fish shop does anyone hear it ? I failed finger-painting at kindergarten so this is all double Danish to me...I'm going back to playing a dusk till dawn session of Call of Duty. This will be followed by a super session of World of Warcraft and then a week of Second Life. My South Korean playing mate Kwok O Chit will not let me leave the computer. These detours to Zero Hedge are made whilst scoffing down a Red Bull and when KOC is busy slaughtering aliens. My wife and I haven't seen our six months old child for a week, but I'm sure our Avatar is taking care of her. How do you say "multitasking" in Korean ?
H2O is water.
Gatorade is better.
Is it really Dewey, Goldmanthem & Howe's job to tell Head-Up-Their-Ass Bank that they really shouldn't buy a product, as the Jackal is on the other side of the trade? Question seriously asked.
This is the funniest post I've seen in a while.
It is not an ethical question, it is a question of law, and if Dewey broke the law, then Dewey should pay, regardless of what the word 'is' means.
There's no law-breaking to be found here. This isn't front-running equities, or taking government subsidies in the form of a 0% haircut on AIG contracts, or any of the other questionable items that make some banks the enemy of all that is virginal and righteous.
My point is if you take Goldman and Paulson out of the story, there is no outrage. This is an issue of a dumb-ass buyer not bewaring, and a seller being chummy with a client.
If you are going to gun down Goldman for this, then you need to gun down Paulson. He knew what was going down too... by perverse logic he should have warned people not to be on the other side of his trade. Reduction to the absurd.
Be outraged at Goldman Sachs for legitimate reasons. This ain't one of them.
I wouldn't be surprised if Goldman gave them this one. SEC says we have to give the "people" something (elections coming up), throw us a bone.
Give GS enough heads up that they can short the market and fleece enough money to pay the fines and damages.
GS gets a slap on the wrist "don't do it again" pays the fine and damages, they ban "Fabulous Fab" from securities business for ten years, paint Paulson as the whistle blower hero and wrap it all up after the November elections. Warren Buffet volunteers to be the "Ethics Czar" at GS. Lloyd Blankfein makes a special appearance on Mad Money defending all actions of GS as God's work, while a kneeling Cramer kisses his ring.
That's not a ring he's kissing. Not a piccolo either.
Agree... big boys need to do their own homework, and stop crying to the government when they don't, and the inevitable happens: someone screws them.
It's not. It can't be. Otherwise it's all red tape forever. It's unethical, perhaps, to know, and not say, it's bad if you want them back as customers and you don't tell them something like that. But it can't be their legal duty seeing as how you'd have to define just what constitutes what and where is the line, and forget about enforcing it.
let me enlighten, no pun intended, it's a bust on the whole concept of the situation.
1) it says that of course they wouldn't tell, they're going to make money. duh.
2) it says, why would they, and anyone that supposed they would, is stupid.
3) it's admonishing those who don't do their own homework, and then bitch when it costs them money.
I'm pretty sure the reason you can make money investing is because there is a risk that you might lose it.
I am not a financial competent, let alone genius, and I get it :)
Short Zero Hedge submission quality.
This guy has it so wrong thinking this is somehow a "pivotal" point in history. I have come to learn that anything that happens in politics or the media, does NOT happen by chance! With that understanding, a better insight is the following. This is a mere offering of a"sacrafical lamb" that Goldman Sachs will be offering up as a result of
fraud charges pending against them.
This is pure "theatre" at it's best. The real "crime" is that Goldman Sachs "cornered" the
real estate market and then crashed it with the help of hedgfe fund manager Paulson.
This explains why Paulson, hedge fund trader was in the winners circle with Goldman Sachs
with the trade of a lifetime. Profiting almost 10 billion from shorting subprime.
A few months later, Paulson is again in the winners circle again with Goldman Sachs,
this time betting against Greece.
It is as if Paulson, is colluding with Goldman Sachs on these trades. Paulson is getting "inside"
information from Goldman, about Goldman's intent to crash the real estate market?
Is it possible that Paulson, is actually trading Goldman's money for them, so Goldman would not have to
show a 20 billion dollar profit betting against subprime, and sparking the liquidity crisis?
The idea is not that far fetched. Months before the credit crisis, Goldman Sachs unloaded
a bunch of AIG goodies to Deutch Bank and Gerneral Society in order to knock themselves down from
the number 3 spot from number one in terms of the AIG payouts as this post at zerohedge reveals.
Keeping my eye on the prize,
Inspector Asset
Goldman has been offloading crap, not goodies on general society for a while. Would you happen to mean Societe Generale for these particular instruments?
Perhaps. Warren Buffett's star is waning, and they need a new star. But Paulson isn't enough of a "people's" choice.
Art, maybe you should check out the contributors over at Barry ("I`m a Wall Streeter") Ritholtz`s blog
Enough talk about "submission quality", is it in fact true that you have two sheds?
No, no. Look. This shed business -- it doesn't really matter. The sheds aren't important. A few friends call me Two Sheds and that's all there is to it. I wish you'd ask me about the music. Everybody talks about the sheds. They've got it out of proportion -- I'm a composer. I'm going to get rid of the shed. I'm fed up with it!
Well then I hope one of them is a "woodshed".
What happened to your other shed?
Sorry ,"Arthur" is taken Two Shed
I couldn't give a shed !
on a sidewalk ,, as you walk ,, there are clear spots ..brick spots , wet spots , high spots, low spots.
and at time dog poo.
and continued satire
You are not in Paris maintenant by any chance, non ?
I have maintained for many years that if enlightened aliens landed on Planet earth today and visited many western cities they would have trouble working out who the real leaders are and what the power dynamics are. Adult human beings being led by this little furry creature with four legs who defecates everywhere and the human being picks it up in a little plastic bag and then deposits it in a bin with the smell of the exo-toxic moon from whence Baron Vladimir Harkonnen hails from. The little yapping creatures then proceed to be fed, washed and given a perfect place to sleep in a large structure by the human beings. It would be understandable if said aliens decided there was no intelligent life on the planet and decided to move on to greener pastures. Strange world we live in. The global expenditure on dog food could sustain many small nations.
Ditto. If aliens landed here, they would have kept moving on.
Do you remember this rich bitch who died, and left her $5 billion estate to "dog causes." Her family fought with lawyers and amongst themselves, but it all went to dogs.
I say if a dog can be pee outdoors, than so can I, I will continue to do so. Your yard might be next.
Patrick the Painter
Once while walking a street in Nice I noticed there was a young boy making fun of my friend and I for being American. As we passed each other on the street I noticed he was about to step in a big steaming pile. I anticipated it by looking him in the eyes. As he continued to mimic our speech, "I am Amereecon, hamburgurger, hamburger" he stepped right into it. I pointed it out to my friend and we could not help but laughing. You believe in D-g so I thought you might like that one.
Thanks for the anecdote. Those Frenchies...See Nice and die !
Why is ZH giving this fucktard space to post this crap?
Why is ZH giving this fucktard space to post this crap?
OMG!!!!!! Octavia has taken over the US Government!!! No more US debt!!!
www.theonion.com/video/us-government-stages-fake-coup-to-wipe-out-nationa,14356/
Euro Dude, take your Bentley/Fastarossa out for a nice drive south of France. It'll all be fine. Really, it will.
Ben Dover is the name of a British pornographer as well. I was looking to see if Robotrader had some competition.
because we are too serious. Well done.
Have you heard of satire? Burlesque? The court jester who mocks the king, but hey, it's just a joke, please don't cut my head off? It is a fine tradition and often the cutting edge of cultural critique.
The Onion?
Daily Show?
Colbert?
Ben D Over?
Welcome back Ben.
South Park clubs all of the aforementioned.
Well said!
War of the worlds then? Is this a satirical site? Where has this pussy ever used the name ben? au didnt drop fucking 25$? Asia is not to going to sell off? Serious ppl have already compared this to Drexel and Millikin.(Obvious stretch but its being done) Your boyfriends discription of the cdo fun was (nearly) verbatim from the complaint. Harry Wanger made a few of you cry the other day for a comment about the market going higher and CD told him to fuck off for not showing a hint of sarcasm. uh...Ben d over jr is a fuctard and the pussies that junk something should be forced (threat of death) to explain why. pussies.
"Is this a satirical site?"
They often run humor pieces. Even the headlines of the real stories are often edgy funny. You have been here 37 weeks and did not know that? Wow. And you missed Ben's punny name? Wow again.
There is another poster who goes by "Phil Grahm" who we have not seen in a while. I'll go ahead and save you the trauma, he too is a satirical gag character that sings the praises of the status quo. Don't get pissed if we ever hear from Phil again.
Friend, I say this without animosity, I don't think you are stupid. Are you ready for it? What I'm going to tell you is much worse.
YOU ARE WOUND TOO FUCKING TIGHT. GO HAVE A DRINK, SMOKE SOME DOPE, GET LAID REALLY WELL, SOMETHING. You are running on anxiety and fear, it is rotting your internal organs. I mean this. Cortisol is a bitch.
That's Ben's real name. He has hosted various talk shows in the DFW area for years. And is the co-author of a book that helps people stop creditors from illegally harassing them.
http://www.amazon.com/Stop-consumers-effectively-collection-harassment/d...
Benjamin N. Dover III
This satirist did their homework.
I was wondering the same thing.
hm, are you suggesting I call in sick on Monday ? lol