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Goldman Default Risk Surges, CDS Hits 160bps

Submitted by Tyler Durden on 04/26/2010 09:36 -0400

No, you are not looking at Portugal or Greek CDS. BofA starting to rumble too: CDS hits 163.

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Mon, 04/26/2010 - 09:38 | 317827 AccreditedEYE

That's so beautiful I almost want to cry...lol

Mon, 04/26/2010 - 09:40 | 317833 Quintus

+1000

Mon, 04/26/2010 - 09:48 | 317855 Cookie

Thank you God!!!

Mon, 04/26/2010 - 09:41 | 317834 Cursive

If there is a God in Heaven....

Mon, 04/26/2010 - 10:27 | 317935 4shzl

Matt Taibbi is driving the stake home big time in this morning's Guardian:

Morally, however, the Goldman Sachs case may turn into a final referendum on the greed-is-good ethos that conquered America sometime in the 80s – and in the years since has aped other horrifying American trends such as boybands and reality shows in spreading across the western world like a venereal disease.

When Britain and other countries were engulfed in the flood of defaults and derivative losses that emerged from the collapse of the American housing bubble two years ago, few people understood that the crash had its roots in the lunatic greed-centered objectivist religion, fostered back in the 50s and 60s by ponderous emigre novelist Ayn Rand.

While, outside of America, Russian-born Rand is probably best known for being the unfunniest person western civilisation has seen since maybe Goebbels or Jack the Ripper (63 out of 100 colobus monkeys recently forced to read Atlas Shrugged in a laboratory setting died of boredom-induced aneurysms), in America Rand is upheld as an intellectual giant of limitless wisdom. Here in the States, her ideas are roundly worshipped even by people who've never read her books or even heard of her. The rightwing "Tea Party" movement is just one example of an entire demographic that has been inspired to mass protest by Rand without even knowing it.

Gotta love this guy.

http://www.alternet.org/story/146611/

Mon, 04/26/2010 - 10:53 | 317986 aheady

Humorous addition to that:

http://trueslant.com/matttaibbi/2010/04/24/will-goldman-sachs-prove-greed-is-god/

Mon, 04/26/2010 - 11:54 | 318077 Cursive

and in the years since has aped other horrifying American trends such as boybands and reality shows in spreading across the western world like a venereal disease.

Taibbi is brilliant. Just brilliant. He could make John Wayne weep for what America has become.

Mon, 04/26/2010 - 13:57 | 318323 ajax

It was published in Saturday's edition. The LSE website Will Hutton - another Guardian contributor - lectures are worth a look in.

Mon, 04/26/2010 - 20:14 | 318903 SWRichmond

Taibbi is just giving his left-wing paymasters a knobber. The goldman story isn't only about greed, it's about regulatory capture and failure. Taibbi and his handlers on the left can never, and will never admit that it was the failure of the regulatory state, and the certain knowledge of being bailed out by the state, that enabled all of this abuse. Hence their calls for more state power over the markets. "Regulation failed, so let's have some more regulation" is the same thing as "leverage failed, so let's have some more leverage."

Regulation provides cover for abuse. It lulls the unwary into a state of relaxation and ease. Regulation says "trust the marketplace, the state is on duty!." False, unwarranted and baseless trust. Cui bono?

Mon, 04/26/2010 - 13:02 | 318216 Cindy_Dies_In_T...

Yep. a choir of angels.

Mon, 04/26/2010 - 09:41 | 317838 Mercury

It's a trap!

Mon, 04/26/2010 - 09:42 | 317843 swmnguy

There's got to be a way they've rigged this themselves.

Mon, 04/26/2010 - 09:43 | 317844 BorisTheBlade

<<This

Mon, 04/26/2010 - 09:54 | 317872 SWRichmond

Amen

Mon, 04/26/2010 - 10:43 | 317967 Alienated Serf

come on man, i used that line in the GS everything is fine, carry on post. don't bite my lines bro!

i'm always tempted to use the "Almost there, Almost there" line when i'm with the wifey, but then i think better of it.

Mon, 04/26/2010 - 11:31 | 318033 Mercury

Sorry, I really didn't see that.

It's just too obvious I guess.

I pretty sure keeping Goldman banter out of sexy-fun-time is a good thing too.

Mon, 04/26/2010 - 11:33 | 318039 Alienated Serf

lol, well more star wars speak then goldman, but yeah, either one will kill the mood.

Mon, 04/26/2010 - 09:42 | 317839 doggis

OMG...i am moist.......waaahoooo!

Mon, 04/26/2010 - 09:42 | 317842 Sudden Debt

So short BAC?

Mon, 04/26/2010 - 09:44 | 317849 Turd Ferguson

If Goldman were still a private partnership, I would rejoice at their demise.

The snakes have already made their millions. If they go down now, the only losers will be the poor schleps who own the common.

Mon, 04/26/2010 - 09:50 | 317860 Cursive

Well, you buys your ticket and you takes your chances. Everybody is high on moral hazard. We need a reckoning.

Mon, 04/26/2010 - 09:53 | 317868 thewhigs

GS traders are probably purchasing gobs of puts thus if GS goes to zero, GS makes billions of ever-increasing valueless $$$$........can't lose situation if one asks me....

Mon, 04/26/2010 - 09:55 | 317875 Turd Ferguson

No sht. That'll be next.

Goldman goes to 0 while Blankfein et al make billions on the CDS they bought.

Mon, 04/26/2010 - 09:54 | 317873 ZackAttack

Have to imagine this is fallout from one of the sovereigns. Probably exposed to British/German banks that own Portuguese/Greek debt or the like.

My question is: How many years have they had these bad sovereign positions on? Could they consider a radical trading strategy like, oh, selling enough shit that no one position can torpedo their books?

Mon, 04/26/2010 - 09:56 | 317877 wagefreedom

Those guys are sharp. This is clearly self-manipulation.

Mon, 04/26/2010 - 10:13 | 317911 LeBalance

Under the supervision of the SEC, that's all these folks do anymore, isn't it?

Mon, 04/26/2010 - 09:56 | 317879 BernankeFed

It might be because it looks like Blanche Lincoln's ammendment of requiring GS and JPM etc to spin off their OTC trading could be in the final bill. I love how Mr. WB is now lobbying to preserve his weapons of mass destruction.

Mon, 04/26/2010 - 10:13 | 317892 virgilcaine

credit events lead the common, bet one of the tbtf's goes down with piig ship.

Mon, 04/26/2010 - 10:07 | 317896 John McCloy

It is over for them. All it takes is a run on their liquidity which is being considered and occurring:

1) If I were a hedge fund I would pull my assets from them out of fear other hedge funds will pull their assets from them causing them to have a Lehman moment.

2) Being an minion of GS is transforming from "genius" status to thief which equates to a black mark. If the charges become more serious in coming weeks and lawsuits bombard the company along with a foreign ban of GS banking it is better to leave the company early in the game as opposed to when it becomes a black mark.

3) Someone is gonna write a book and the first one out with a book is going to make million and ramp up the GS anger.

4) Financial regulation in even mild form hurts these leveraged bets

5) Must be a few whistle-blowers around the corner preparing to offer some interesting details and past example of GS fraud that are not as gray area.

Mon, 04/26/2010 - 10:09 | 317900 ZackAttack

Here's a really simple proposal... $1m whistleblower reward for evidence of every $1b in fraudulent transactions at IBs.

As long as we're dealing with sociopaths, we may as well do so in a way that makes them marginally valuable to society.

Mon, 04/26/2010 - 10:20 | 317925 John McCloy

The SEC needs to become the most feared agency in all the land. If I were Pres that would be no.1 on my agenda is restoring fear and respect for an SEC that is well budgeted and let them go after super stars of finance like free agents. I would get rid of the name SEC and create a new label for the agency and within 5 years they would be more terrorfying than the IRS.

Your idea of paying whistleblowers money is great and actually would save the financial world considerably more in the future. Members of the new SEC should also get bonuses for how much Squid and Morganite arse they kick.

Mon, 04/26/2010 - 10:24 | 317931 brooklynlou

The only way they can go after the superstars of finance is if the SEC attracts the superstars of finance and the only way they can do that is if they distribute massive Wall Street level bonuses for discovering fraud.

Mon, 04/26/2010 - 10:52 | 317983 ZackAttack

Turn the sociopaths one against another - 'You nail this guy, you get whatever we can claw back of his bonus.'

Good incentive to gun for the head motherfucker.

Mon, 04/26/2010 - 12:48 | 318195 SteveNYC

So if someone nails Bernanke do they get his printing press? That's where we should be aiming, Mr. Moral-Fucking-Hazard himself.

Mon, 04/26/2010 - 11:57 | 318084 Cursive

+1 Said very same thing this weekend. I fully authorize my tax dollars to be put into a $10B fund for the legal team that would take down these banksters.

Mon, 04/26/2010 - 12:05 | 318097 John McCloy

It is only logical from this perspective. If you have dozens of firms running rampant with an incentive to commit fraud for financial gain because the Fed, Politicians, media, prosecutors and SEC let them operate with impunity it only seems sensical to create a super agency who brings balance to the equation by making their living fining these guys billions.

If anyone should be receiving 4 billion a year it is the guy that prevents 45 billion in fraud. The system is upside down. Cops must be paid the same is criminals. Also this would look great on a resume. Just imagine the kind of fear that would run through Wall Street's veins knowing that if New SEC discovers insider trading gains they can extract the entire sum plus a flat billion dollar fine of which the New SEC stars see 20%..WOWZERS.

Mon, 04/26/2010 - 13:03 | 318219 Cindy_Dies_In_T...

Qui Tam it, darling.

Mon, 04/26/2010 - 10:06 | 317897 truont

I guess God's work isn't easy, is it?

Mon, 04/26/2010 - 10:13 | 317909 The Rock

LOL. Although his God is Satan.

Mon, 04/26/2010 - 10:15 | 317917 Crab Cake

Wake me when the crooks in GS, among others, are swinging from lightpoles or behind bars.

Mon, 04/26/2010 - 21:04 | 318977 ambrosiac

Big Swinging Dicks?

Mon, 04/26/2010 - 10:32 | 317920 virgilcaine

At this stage of the credit cycle with weakened structure any event is enough to push it over. Recommend reading the article at nake capitalism on the 1931 Creditanstalt bank failure.. very similiar to today.

Greece and co to be our creditanstalt?.

Mon, 04/26/2010 - 10:18 | 317922 GS is short Gold