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It's Official: Goldman Waves FX Surrender Flag
Ah, the smell of Goldman surrender in the evening. Smells like... victory.
Slightly less than two weeks ago we initiated a long EUR/$ trade recommendation on the basis of three factors. First we anticipated a notable improvement of cyclical growth news in the Eurozone, second we highlighted the continued USD negative BBoP flows and finally, we assumed that the Greece risk premium in the Euro would stabilise and decline.
While broadly correct on the cyclical news, where the latest round of European business surveys point to strong momentum, we have clearly underestimated the impact on the EUR from the European sovereign crisis and perhaps also from the broader macro adjustment that it portends. The latest developments suggest the building consensus among Eurozone members is becoming increasingly difficult. These political headwinds currently matter far more for the Euro than the cyclical factors.
We were stopped out of EUR/$ for a potential loss of 2.8% (opened at 1.3740, closed at 1.3350). Given we also carry significant EUR/$ exposure in our short $/PLN recommendation, we decided to also close this idea for a small potential gain of 0.6%.
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Thanks for the offering,
It was a bit too high,
I think I'll pass it by,
Mark it down by 10,
And call me back again,
Yes thank you, bye bye.
The trade goes against them 2.8% and they bail? What cowards.
They probably had less than that actually backing it.
Every time I try to figure the exact level of recursive reverse psychology used in Goldman's statements I actually have to sit down and take deep breaths. I feel sort of like I am having an out of body experience. Or a stroke.
This is all just about too surreal for me.
my thoughts exactly :)
If only I had received this valuable information two hours sooner. LMFAO!!!
They did not say how much their prop desks boyz made from taking the other side of the long euro call? Anyhow the squids are becoming quicker at this pump and dump moves - 2 weeks is almost shorter than reaction time of some of their "clients"!
Anyway I ask people to please help keep track of all squid revisions to their S&P earnings estimate of $81 this year. These squids need to be shamed any way we can, as do the lazy and cynical fund managers who would "buy the earnings upgrade at the start of the year and then conveniently ignore all subsequent downgrades", too busy on their trips to investors conference to Bang kok or Tokyo. There is so much information on this blog and others like it, we must not let it go to waste - if the congressmen and senators refuse to take our calls, then let the god-workers at least know we are gathering evidence for the next crash lawsuits against them.
'Twas hubris. GS has gotten so used to manipulating the Lilliputian equity markets, they thought they could tame the FX. Message to GS: Don't mess with the grown-ups.
"......we will be sure to strip it from your tax returns, oh pathetic peon serf-ants!"
Fair enough, but the Euro looks a bit oversold to me at present - everyone's jumped on it over the last few days.
DavidC
(errm, this does not constitute contrarianism investing advice...)
Goldman wrong? Underestimated? What planet am I on?
goldman out of dry pow(d)er?
don't worry ... they will make it back and more by squeezing the hell out of PMI.
The question is how much did they make on the trade?
This is likely a 5th wave off the Nov/Dec high which means it may end soon... look for declining momentum for a pending reversal. Today was quite strong, however, and if momentum measures exceed their February extremes (daily RSI (14)), this may be a 1,2 (1,2) setup with the strongest price declines to come. Based on the GS decision to bail so quickly on their call, as well as their inside connections to the messes of their making, I would keep an eye on the latter... a game changing, dollar deflating Euro crash.
I guess Goldman is finally done selling Euros...
The Macro View
http://themacroview.wordpress.com
Well if they're not long the EURO are they willing to short it? Or is that not politically correct?
I guess they figured out the hard way that they can't magically whisper the forex markets like how they do with equities.
Goldman would have bet against itself for a far bigger sum.
One thing i find it difficult to understand. If Greece, Portugal etc go/get thrown out of the Euro, then the Euro should be strong. A sign that only those who can take care of the fiscal requirements are part of the Euro. Finally, of course, The Euro may be the new Mark.
With this kind of High Frequency trading levered loss expertise, my suspicion grows more and more that Goldman has been running the biggest hide your losses Ponzi scheme in the History of the World.
They're the only firm in the world that has half their revenue go out as cash bonuses and lately stock bonuses to get the heat of them.
It stinks like an Enron Power generator having exploded and ruptured a nearby septic tank.
Any bet to as whose levered assets are more worthless? GS or JPM?
http://funy1.blogspot.com/2010/03/whose-leverage-is-more-worthless-jp.html
We need to institute negative stock price possibilities to two these rogue investment banks into line.
Come work for us but if you screw up and hide debt and lie about it, each share you own you will owe money to hold.
With this concept, GS shares should be priced somewhere negative of Absolute Zero Temperatures.
http://funy1.blogspot.com/2010/03/goldman-back-to-being-levered-high.html
the euro bull market has just started
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