Goldman Takes Client Abuse To Next Level: Closes, And Reopens, Copper And Zinc Recommendations At Massive Losses

Tyler Durden's picture

We thought we had seen it all. And then comes Goldman. The firm, which continues to eviscerate its clients, just closed its Long Copper and Zinc June 2012 trades at massive losses: the first was opened on May 23 at $8,804/t, and closed on December 19 at $7,274/t, for a loss of $1,530/t, the second opened May 23 at $2,189/t, closed on December 19 at $1,891/t, for a loss of $298/t. So far so good - as all our readers know by now, one should do what Goldman does (i.e., sells to "clients"), not what Goldman tells its clients to do. This is not surprising. What however, is hilarious is that in the same report that Goldman closes its June 2012 Cu/Zn longs, it also... opens Cu/Zn longs. That's right - "While we maintain our bullish views on copper and zinc into 2012, we close out our May 23 recommendations for these metals at a considerable loss, and resetting the recommendations at December 19 prices." So somehow, while losing clients up to a blended 15%, Goldman continues holding the feet of those who still listen to them to the fire. Because this time it will be different.

In summary:

  • Closing: Long Copper June 2012 (opened May 23 at $8,804/t, closed on December 19 at $7,274/t, for a loss of $1,530/t).
  • Opening: Long Copper June 2012 on December 19 at $7,274/t.
  • Closing: Long Zinc December 2012 (opened May 23 at $2,189/t, closed on December 19 at $1,891/t, for a loss of $298/t).
  • Opening: Long Zinc December 2012 on December 19 at $1,891/t.

It really doesn't get any funnier than this.

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mc_LDN's picture

So if that logic holds true GS is"selling" Gold right now - right? Eeek. Maybe I shouldnt hold that Gold.

Tyler Durden's picture

Gold will most certainly plunge as the next deleveraging, liquidation episode grips the market.

Luckily, nobody here holds gold for investment purposes of converting fiat into fiat with a gold intermediary.


SilverIsKing's picture

I can only speak for myself.


YBNguy's picture

While gold will take its hit, my 'investment' of choice, ammo, will still climb...


Bullish Bullets for Christmas!!!!

Jack Napier's picture

Somebody once said silver bullets were the best investment you could possibly make.

If Goldman isn't long copper, then they must think the economy is heading for a slowdown. It seems to have been picking up lately though.. maybe they're just trying to make everybody look left while they zag right.

Bendromeda Strain's picture

Bullshit. Advancing a position with the intent to take delivery used to be not only a legitimate way, but also a financially sound way to accumulate physical, pre-MF.

GeneMarchbanks's picture

Um, thank you for the glance at 'pre-MF' market conditions. I'd like to add that I made some fiat with Bear Stearns a while ago... I'm not sure how that helps either you or me but it's good to know...

tmosley's picture

Only idiots own paper gold.  If gold "plunges" again, there won't be much if any physical available, just as there was hardly any to be had after the 2008 plunge.  Had to wait two months for delivery on silver I purchased then, and paid a 50% premium.

55 men's picture

People are fleeing the Euro and looking for a safe haven, which obviously they think is the dollar.  We will see how gold and silver hold. If silver doesn't hold that 28 mark then we will see 26 and if that doesn't hold it will fall further. Huge buying opportunity if this happens. Short lived but definitely a possibility.

gmrpeabody's picture

Yes..., if gold and silver can't hold at these levels, they may well go down. <sarc>

LongBalls's picture

I seem to remember those same people fleeing the Euro to the Swiss Fanc not too long ago. We all know how that worked out. King Dolla' is soon to shake the fool's. Operation debasement is a force that can't be stopped. Sure, gold and silver will take a dive. But as TMosley stated......have fun trying to get it.

Potemkin Village Idiot's picture

Luckily, nobody here holds gold for investment purposes of converting fiat into fiat with a gold intermediary.


Well if they did... They'd be pretty goddamned stupid...

donsluck's picture

To be realistic, one would one have to, eventually, convert to whatever currency is used to buy groceries, pay real estate taxes, etc.

tmosley's picture

Not all currencies are fiat currencies.  The age of universal fiat had a beginning, so it will have an end.  Those who hold gold are simply waiting for that day to come.  Gold has the side effect of transferring purchasing power through different fiat currencies in a lossless manner as a happy side effect.  If the next currency regime should again be fiat in naute, you can bet your gold will buy a lot more of it than your dollars will.  It would be ill advised to trade your gold for this new fiat beyond immediate needs, however, as fiat successors to failed currencies have an even shorter average and median lifespan than the full set of fiat currencies.

Smiddywesson's picture

Tmosley bring up an important point I discussed on Turd's site this morning, when to sell?

  • successor fiat currencies often fail
  • complete systemic collapse can still occur after a devaluation
  • In the 30s, devaluation continued in waves as they tinkered with the gold price, so you can convert into a new currency and be hit with another wave of devaluation.
  • It's unlikely, after ramping the price of their gold, central banks will allow the price to collapse.  This isn't a bubble, it's a reset.
  • Bernanke and company don't have a handbook for Operation Reset, it's been done before but never on this scale.  Therefore, they will feel their way along and debase the currency through printing and through the ramping of gold prices, but they are likely to do it in stages.
LongBalls's picture

So in conclusion; although you need fiat to run your day to day expenses/purchases continue to buy at any price. Obviously the dips are the best entry points but accumulation is paramount. DO NOT buy so much that you are forced out of it (sell) to run your day to day operation during a massive raid. These are the days you want to be overweight fiat. Balance and adjust accordingly.

Above all rest your pretty heads. Even if, on a far outside shot, this thing does not come down in our lifetime. One's family members will most certainly be able to use the gold. Don't even question how thankful they will be for your insight.

agent default's picture

There are still people in these markets on leverage? WTF? 

Global Hunter's picture

Right...I own GLD...wait whaaaaaat?

Unholy Dalliance's picture

Errrrr… I thought Dennis Gartman was an honest man and when he called a top in gold last week, I sold EVERYTHING I had to some guy named Diamond?, Demon?, oh, that's it Dimon. Jammy Dimon - no that's not it! Jamie, that's his name! Jamie Dimon! He said he'd do me a favour and take it off my hands. He only charged me 10% as it is Christmas! What a nice man and such a relief to be shot of the stuff!

DaveyJones's picture

I once had a gold fiat, it didn't work either. 

SovietCong's picture

Apparently, GS has a hard time lying about gold - just look at the Initial Value at the beginning of the holding period. 1,800/oz in October '10? Looks like a Freudian slip to me...

transaccountin's picture

Funnier? Well the 20 /es pump job since 3am on hopium is pretty comedy as well.

firstdivision's picture

If you think that is comedy, check out oil.

monopoly's picture

And what else do you expect from a Squid.

i-dog's picture

What part of "You're a fucking idiot if you entrust your investments to Goldman" do their clients not understand??

DaveyJones's picture

apparenlty the "fucking" part

Bendromeda Strain's picture

True dat - it should be past tense for the recipients.

55 men's picture

These people are incredible. There are no stops. I am just thankful I am nothing like these people. I am glad I can sleep at night.

Global Hunter's picture

Goldman is shorting so they see massive deflation

Seasmoke's picture


RobotTrader's picture

Here we go again.


Everyone is now making fun of Goldman's horrific trading recommendations.

However, when they predict a massive financial implosion in Europe or a huge U.S. recession, suddenly they are considered infalliable "experts" and those forecasts are heaped with praise here on ZH.

AngryGerman's picture

so go ahead, i dare you to open Cu/Zn longs

junkyardjack's picture

Even a broken clock is right twice a day

mick_richfield's picture

I said that to my daughter, and she had no idea what the hell I was talking about.

When the clocks in her world break, the digits on them don't light up any more.

fuu's picture

A stopped clock is right twice a day, a broken clock may never be correct.

DaveyJones's picture

how often is a crooked clock?

UnderDeGun's picture

Not if it's digital. Then it's blank.

slackrabbit's picture

I think most poeple make fun because goldman is nearly always the ' happy talk' generator.....most people here could see the economy was in trouble back in 2005

When they are down on the economy they do normally have a motive - like print more money

firstdivision's picture

So in reality, their macro outlook has been in conflict with their trading recommendations.  Seems like a great way to shift blame when things don't pan out.

kito's picture

we would love to make fun of your recommendations, but, geez, robo, youre after the fact calls are always spot on......

Potemkin Village Idiot's picture

Robo would gladly tell you what stocks did last Wednesday for a hamburger today...

EvlTheCat's picture

I prefer making fun of your horrific trading recommendations.

GS predict a financial implosion?  More like the cause of said implosion.  As I recall ZH predicted this well in advance of Goldman jumping on board.  But it does not surprise me you would remember it the other way round.


tmosley's picture

They aren't "selling" those things.  Can you really dispute the track record of their specific recommendations?

Or do you hold them to the same standard as your own dumb calls?

Potemkin Village Idiot's picture

Everyone is now making fun of Goldman's horrific trading recommendations.

Well... All I can say is when the come out and say "Fade the Robot Trader", I'll reassess my POV on them...

PulauHantu29's picture

Read Bogle's books. He openly says the only people who make money with investment funds are the brokers, dealers, executives at the borkers. Too much commissions, fees. etc he says.

Better to do your own research then rely on conflicted recommendations he least that's what I take away from his books.

I am a Man I am Forty's picture

i mean, does anybody really listen to these fuckers anymore??  and if so, who??  nobody's that fucking dumb.

slackrabbit's picture

Im glad I shorted copper.

When the squid says one thing, do the opposite and put in a stop....besides China is cratering,...