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GSAM Pitches 2007 Emerging Market Highs As A Tangible Goal For "Quant Investors"

Tyler Durden's picture


In other words, the HFT algos are about to go into turbo overtime: Goldman has given the green light.


CC_ERominger_GSAM_Sep09 final_TPD -


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Wed, 09/16/2009 - 19:26 | 71774 Anonymous
Anonymous's picture

alright. this is scary. they are showing this to clients? they are going to rape not just the peasantry, but the clients in the coming "adjustment"?

man, they are packin' the seats tight on the titanic. lloyd is going to have to buy a country, not an island, for the employees to save them from the masses at the gates when this is done.

Wed, 09/16/2009 - 20:37 | 71830 Anonymous
Anonymous's picture

The clients always get screwed. They're the easiest to scam. By definition they're dumb and have money. The peasantry are dumb, but they don't have any money.

"Where are the clients' yachts?"

Wed, 09/16/2009 - 19:29 | 71777 leathaface
leathaface's picture

i had to stop on page 7.  "majority of deleveraging completed"  you have got to be fucking kidding me!  and the result being "stocks trading more on fundamentals".

I am fucking losing it!

Off topic: there was some chucklehead on CNBC today w/ top 20 companies ready to go bankrupt.  One of the was Textron!  what the hell is going on.  the stock is up close to 100% in 2 months due to Goldman Shits upgrade, and now this Son of Bitch says they are going belly up?!  How can there be that much disparity in opinions of a company. 

Wed, 09/16/2009 - 19:40 | 71784 Howard_Beale
Howard_Beale's picture

Simple...actual balance sheet analysis vs getting paid fees for underwriting more debt after upgrading the company to a buy. Bankruptcy call may be way too early--he also talked about AMD going that route. But Weiss called the GM bankruptcy in 2005 just based on it's balance sheet. Some things take time.

Wed, 09/16/2009 - 19:31 | 71779 Mos
Mos's picture

Be interesting to see what the reports they released late 2007 and 2008 before the crash say.  Can you trust someone who didn't see any of this coming to forecast the future with any accuracy?

Thu, 09/17/2009 - 07:00 | 72117 Anonymous
Anonymous's picture

SPX 1650 was Abby Cohen's 2008 target IIRC.

Wed, 09/16/2009 - 19:38 | 71781 BobPaulson
BobPaulson's picture

Everybody with a life jacket climb aboard the Titanic!!! Pay no attention to those men in red suspenders getting in the life boats...

Wed, 09/16/2009 - 19:39 | 71782 Lothar the Rott...
Lothar the Rottweiler's picture

Not for distribution to the general public.  That's nice to know!

Wed, 09/16/2009 - 20:09 | 71802 deadhead
deadhead's picture

aaah, but ZH is not the general public.  ergo, all's good.

Wed, 09/16/2009 - 20:14 | 71806 Lothar the Rott...
Lothar the Rottweiler's picture

Don't tell anyone, but I have to use a calculator to get past the math questions. :)

Thu, 09/17/2009 - 07:20 | 72125 Glen
Glen's picture

Thank god I'm not the only stupid person here.

Wed, 09/16/2009 - 19:40 | 71783 kevinearick
kevinearick's picture

The jig is up.

They hired a bunch of yes men with phony "quant" degrees. Now they are priming a dead pump, while they randomly try to find a solution.

In the meantime, they are liquidating all the pension funds.

Macroeconomic Outlook

Conclusion: Wealth does not disappear. The intelligent kids have simply transformed it into investment in their new economy. It will be interesting to see what these talented kids have in mind for us next, when the prudent bankers regain their dominance over the banksters, and the old families extend credit directly to the regulars forming the backbone of the new economy.

Question: Who participates in a rigged lottery economy?

The Chinese are not dumb. They are stockpiling for good reason, and hoping they can keep their own peace long enough for this situation to implode in the US first:

no inflation?

The markets are up 50-100% in 6 months, largely on bankrupt products guaranteed by government. I would call that inflation. If you multiply dollar depreciation by total dollars outstanding, you will see the corresponding deflation. Someone must absorb the inflation, with deflation, and there is little left in the way of liquidating labor. From the perspective of ownership, labor assets are fully depreciated to salvage, with no means of reclamation.

In round figures, there are 350M people in the US, 125M working semi-real jobs, and 225M depending on interest and dividends, which provides the corporate, government, and non-profit crony jobs, along with associated welfare transfer payments. The economic return on unskilled labor is down to 15%. The skilled labor numbers are not really skilled labor; they largely reflect protected crony labor, more appropriately assigned to agency, delivering a false "promise" of rising living standards. Labor must get a minimum of 50.1% to run a sustainable economy.

Cronyism employed technology, low wage immigration, outsourcing and import/export price control to implement wage arbitrage from above, driving wages down to the least common denominator globally, and compliance-based education to reinforce the necessary behavior modification domestically, from below. The boomer assets were thereby liquidated to provide temporary income, resetting the entire system to a lower wage threshold, under the corporate agency watch of republicans and the government agency watch of democrats.

Leaving behind an economy of temporary, part-time, $10/hr jobs in their demographic wake, the boomers cannot expect the kids to pay a $700 social security contribution; a $1400 medicare contribution; crony corporate, government, and non-profit overhead; as well as the investment required to sustain their own families.

The bill on all the debt is due now, which is why the Treasury is doing what it is doing. Good luck getting the kids to pay the $100 Trillion domestic debt on the old clunker they have been left as their inheritance ($500T globally).

It's all in the IMF Outlook report, for anyone who cares to read between the lines.


Family Law shifts investment & savings, to consumption. Shift family law onto resulting demographics, onto resulting private asset liquidation, onto resulting agency income, onto interest & dividends, and adjust volatility and momentum for cartel equilibrium action. This has been going on for a few thousand years now, before Jesus, before the pharaohs. Burn, then turn, first the males, then the females, to interrupt new family formation, the perceived threat of replacement to agency.

Economists, like doctors, and the moneychangers in Herod's Temple, created a system in which they were paid to identify symptoms, and treat them with drugs, causing additional symptoms. Different doctor, different drug. Naturally, with increased use, the drug, unearned monetary expansion, printing money, becomes ineffective. Printing money within computer accounts, beyond public view, increases the level of misdirection, but doesn't change the outcome, because the kids are much better programmers than the banksters.

The banksters can no longer expand credit among the intelligent kids, who employed the Internet as a transient university, to build a far superior output gap information system, while the banksters were feeding the old university complex with credit, hoping to capture them along with the cronies and the deadheads.

Welcome to reality re-entry...

We can expect a psychological epidemic. There's a reason the German army fought with guns both in front of them, and behind them. The greatest irrationality of WWII was the banksters who profited from the exercise.

Banksters make a living on people who want something for nothing. Speculators serve a useful purpose to the extent that their activities shed light on the process, and give such people an opportunity to examine their result in real time.

People are people, symptomatic results; a little History, the thread, helps to cut through the fog. A lot of History, the misdirection, only serves to confuse. All empires, capitalist, communist, socialist, and fascist, die in a fit of cronyism.

It's all in the UN corruption reports.

Management Practice:

Best-business-practice, replication, is the mechanism that spread the financial cancer, and objective-based-management was the accelerant that put patient recovery out of reach.


The kids could care less. Recognizing the true nature of the problem, they have already left the barn, for greener pastures.

Wed, 09/16/2009 - 21:19 | 71859 Anonymous
Anonymous's picture

sorry to swear, but that's fucking brilliant.
absolutely fucking brilliant analysis.

if we would continue to choose to be a speculator after reading this, we would buy 100 calls that you are one of those kids amigo...but we'd rather go with ya and grow some veggies and let the deadheads play dead with their own heads and burn their own man.

time to make some compost.

dear lady marla, please invite sir kevin here to be a contributor.

those pastures he's pointing to
that's where the TAZ be now

Wed, 09/16/2009 - 21:55 | 71896 Anonymous
Anonymous's picture

sorry, disagree, that is just a pile of random nonsense trying to appear intelligent.(and trying too hard to do it in a style of other contributors. too much groupthink here).

Wed, 09/16/2009 - 22:45 | 71942 Anonymous
Anonymous's picture

in what way do u think
anon disagreeing with itself

Wed, 09/16/2009 - 22:54 | 71951 Anonymous
Anonymous's picture

and ah, anon looking at itself in the mirror, which contributors are you referring to exactly?

the closest contributor it resembles to this anon is a curious cat over at herr setser's old blog at the council not to be named...

Thu, 09/17/2009 - 03:22 | 72082 kevinearick
kevinearick's picture

The real eaquation for economic growth is:

(C + I) / G; it's a fulcrum, with a growing platform, so long as it is balanced properly. Durable family formation creates durable durable goods orders, which creates durable jobs, which is the golden goose. Everything else is consumption. Think about the quality of goods that different types of populations buy, and where those goods originate. As always, follow the money.

Wed, 09/16/2009 - 19:48 | 71791 Missing_Link
Missing_Link's picture

Remember, this is from Goldman Sachs.

So you have to use quadruple-reverse logic for anything they publish.

Which means since they are telling you it's OK to buy, the plunge will come at any moment.

EXCEPT, they expect you to think that, so it really is time to buy.


Wed, 09/16/2009 - 21:24 | 71864 Crab Cake
Crab Cake's picture


Wed, 09/16/2009 - 21:24 | 71865 Anonymous
Anonymous's picture

... they expect everything EXCEPT their stock price hitting 1 3/4 again like it did when their CEO testified before the Pecora Commission ...

Wed, 09/16/2009 - 20:07 | 71800 deadhead
deadhead's picture

I stopped at the part that said "majority of deleveraging completed" and "stocks trading more on fundamentals".



Wed, 09/16/2009 - 20:18 | 71811 Anonymous
Anonymous's picture

It's hard to take this report seriously when it says "stocks are trading more on fundamentals", and then a few pages later highlights how the rally has been driven by garbage stocks.

Here's a new disclaimer for larger investment firms:

"This firm may release research which contradicts itself."

Wed, 09/16/2009 - 20:25 | 71814 putbuyer
putbuyer's picture

Like funda-mentalcases. The derangement syndrome is rampant. But let me say this Dead. In our days - today I notice a shift from the use of the moniker Dude to the more relevant Brother. I ask myself why? What do you think?

Wed, 09/16/2009 - 20:15 | 71807 Anonymous
Anonymous's picture

Actually, there's a gem in this report and it's on page 8.

They call it "Opportunity: Quality businesses have not rallied", suggesting they will rally. But my position would be - "Only garbage companies rallied. And the bigger garbage it was the more it rallied".

Check it out.

Wed, 09/16/2009 - 20:17 | 71810 Anonymous
Anonymous's picture

that piece of "work" would do Mckinsey proud, except that even McKinsey has moved away from 1990s-style sell-side reports

Wed, 09/16/2009 - 20:35 | 71827 Anonymous
Anonymous's picture

I have read the whole Shakespheresque missive and it is exactly what I will personally relate to the UBS office division head when he questions my investment philosophy during "personal" meeting this Friday afternoon. I fully expect his head to pop off his shoulders after he queries me about his red stapler.


Wed, 09/16/2009 - 20:36 | 71829 SteveNYC
SteveNYC's picture

What a crock! "Emerging markets are a good buy". What the f*ck? You have China, the bulk (by far) of the "emerging markets", that is blowing a massive (admitted by its own government) Jurassic-size bubble in stock and real estate prices.

Yet there "is real value" buying the sh*t stock of those companies? Yeah, count me in Goldman!

Thu, 09/17/2009 - 07:10 | 72120 ratava
ratava's picture

China (Shanghai) bottomed out in November, went up steadily and had a 40% retrace in August. US bottomed in March, shot up like a rocket with largest retrace around the 10% mark. Talk about bubbles some more.

Wed, 09/16/2009 - 20:46 | 71834 AN0NYM0US
AN0NYM0US's picture

EDIT - duplicate deleted

Wed, 09/16/2009 - 20:51 | 71838 Anonymous
Anonymous's picture

Using quadruple-reverse logic...

That means 'distribute' to the general public, thereby encouraging so said public to believe that the Vampire Squid is letting them in on a little secret about the future direction of the markets.

Stop listening to the doom and gloomers, take every last red cent, invest in equities, hibernate, ignore Red October Crash.

Don't worry....Be happy.

Wed, 09/16/2009 - 20:54 | 71843 Herr Morgenholz
Herr Morgenholz's picture

You guys are tough!  You know how much work it takes to turn a mere bubble into a nuke?

Wed, 09/16/2009 - 21:49 | 71891 agrotera
agrotera's picture

Considering today's market action, it must be very strenuous to continue the pace...

Wed, 09/16/2009 - 20:56 | 71845 Anonymous
Anonymous's picture

Don't forget Goldman gave a $200 oil call as they were not only getting out of longs but going short. Anybody stupid enough to be long this market deserves what is coming. CRE coming, Israel-Iran on deck, near record lows in mutual funds, main street depression. Just because we have the Wall Street parasites making money, don't get caught up in the bullshit, patiently wait for the trendline break. I smell a crash coming. I saw 1987 first hand, called the 2000 top, caught the top in 2007, and this, by far is the most ridiculously overvalued market in the history of markets. If you think the consumer can come off the mat (or will) think again. Now this doesn't help the short term but my guess is 1 or 2 more days of ramp and we'll see what is in the tank. This is classic optimism near a peak. Bears have capitulated so be on alert.

Wed, 09/16/2009 - 21:52 | 71892 agrotera
agrotera's picture

the big top of March 2000 on the Dow was about 11, a perfect reenactment part of the plan, or will the PPT plan to go far beyond this number to stupefy us all?

Wed, 09/16/2009 - 20:57 | 71846 nope-1004
nope-1004's picture

Remember in April when one of the major banking firms said "it is time to short us now".


I forget which firm it was.  But the published shit is just a lie to the masses and the opposite is what insiders expect to really occur.

Wed, 09/16/2009 - 21:19 | 71860 Gubbmint Cheese
Gubbmint Cheese's picture

that was either Citi or Bac as I recall - TD will remember I think he posted on it.

Wed, 09/16/2009 - 21:22 | 71862 capitalisa
capitalisa's picture

Dear former Fed Chair Volcker says banks should not be making trading bets with their capital, should be restricted to trading for clients.  Well, how would the banks make any money at all! 

Wed, 09/16/2009 - 22:10 | 71907 deadhead
deadhead's picture

I saw the article, happen to agree with Volcker.

Something tells me that Volcker is just being used by Obama and is trotted on a rare occasion when Obama wants to look "tough" on cheat street.

I'd like to see Volcker publicly tell summers, bernanke, geithner and the street to go phuck themselves.  I hope on the rare times that he gets Obama's ear, he lets him know that these guys are phucking it up big time.


Thu, 09/17/2009 - 05:59 | 72111 Ned Zeppelin
Ned Zeppelin's picture

You are "dead" on.  Volcker was tempted to join, then neutralized. Another cold one, Mr. Volcker? How's that cigar?

Another douchebag.

Wed, 09/16/2009 - 21:39 | 71879 Anonymous
Anonymous's picture

What a joke; you know that none of this shit is going into the funds which manage a majority of partner funds. That is reserved for the HFT and private equity deals that have a chance of making funds. How could you possibly give your money to manage to the worlds biggest broker dealer. Chinese wall my ass.

Wed, 09/16/2009 - 22:49 | 71947 Anonymous
Anonymous's picture

V knows
O knows that V knows
V knows that O knows that V knows
O knows that V knows that O knows that V knows
V knows...?

Wed, 09/16/2009 - 23:11 | 71974 Tripps
Tripps's picture

This is the biggest PUMP Piece I have ever seen...can't believe they actually give this out and expect people to believe it

Did you see the page that said " It's not to late to get in"!!!


what the hell is up with these morons...this is scraps of paper we're talking about. the biggest gains are had already




Thu, 09/17/2009 - 07:11 | 72121 Anonymous
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