Goldman's 10 Unanswered Questions On The European Bail Out And The Revised EFSF

Tyler Durden's picture

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FunkyMonkeyBoy's picture

So people are actually buying stocks is the reason for the move up now?

I thought the ZH story for since the start of October was that this was simply a short-covering rally on fumes?... that was going to be sell-the-news event?

sqz's picture

Will the ECB continue to backstop the financial system?

We therefore think it will be crucial for the ECB to continue to play its role as fall-back option in order to prevent a systemic event...We continue to think that the ECB will remain active in containing financial market uncertainty, in particular by remaining active in the bond market through the SMP (although the size of its interventions may vary).

And so Goldman reveals its hand... For as far as anyone else understands, the whole point of the EFSF and the ESM is as a replacement for the temporary SMP purchases from the ECB.

So, GS saying S&P500 to 1360, go go go!

Dick Darlington's picture

Exactly. Germans insisted when they voted this week that ECB should stop the SMP once the new monster is ready to go. But all the banks rely on the central banks to continue their monetization schemes. I think ECB will continue because even a child can see that the emperor has no clothes. And at some point Germany will say no and either force ECB to stop or leave the euro.

disabledvet's picture

"bailouts are to ______ what military bases were to ________ during the Cold War." Insert answer atop line. And do not cheat this time either--and that includes you Madoff!

Deadpool's picture

$1.5Trillion is a lot of NEW currency units to float a tiny world market. I tell short sellers and put buyers they are fighting an overwhelming tide of dollars...Be warned, the German stock market rallied into hyperinflation in the 40's.

Tyler Durden's picture

Zero Hedge has been warning, and specifically last Friday, that the unending EURUSD short level will force a massive squeeze when it unwinds. The only driver of the market is the Euro, and today was have moved 350 pips since the bailout announcement. What you should be asking is why does the market trade tick for pip with the EURUSD? Simple: because all USD- denominated stocks are doing is preserving their value relative to dollar devaluation. The S&P when expressed in the dollars YTD is down 2%.

kahunabear's picture

Hmm, doesn't feel down today. I must not be properly hedged.

rocker's picture

If you bought Gold, Silver, Platinum, and Palladium you would have been perfectly hedged.

My largest purchase was three years ago and then two years ago. (Also have Silver from 10 years ago).  

Did not get enough of a pull back this year for me. It was close, but I waited too long.

Tyler and Zero Hedge Rock. We share many of the same thoughts. 

The best part is it still gets news nobody else will tell you.

Thanks for what you do Tyler and Crew.

Börjesson's picture

Gold is also slightly down today, if you discount the dollar devaluation.

disabledvet's picture

yeah but that wasn't TD's answer. The question is valid and so is this answer. Of course truth be told "mo mo monkey's" come in many forms and we are not least i am not here--- because i want to Seek ALFpha. I'm here for a discussion about money in its purest form--and i ain't talkin' gold since as we all know "the opposite of a hedge is leverage" and not as business school teaches us a "counter party." we can "hedge" using gold (the only hedge actually--as we all now know from Europe and all that "sanctity of contract" bullshit that Wall Street carts out)--but you ain't "levering" anything using gold (now THAT'S sanctity of contract. With GOD.) That guy's name was Rockefeller--and he was a debt market unto himself. In those days only the government had debt...and they came to New York to get money. Now "it's the other way around." Hmmmm. I wonder why that is.

Deadpool's picture

I wish I had my swissies +2.5% back but I take comfort in that they moved into Aussie. +3%

knukles's picture

YTD comparative dollar terms:

DJI     +  5.4%
PHYS  + 22.9%


acabrer's picture

oh you did...come on tyler don't be cheap with your crowd following ,which are more than likely broke or trying to cover. I for one quit taking this place serious 9 months ago, my account thanks me for it. you are pointing out ONE article.....ONE. very cheap and so is this place.

The Axe's picture

And Bonds Tyler?   yields exploding...   recession off maybe?   

mynhair's picture

My ? is how long can this squeeze last?

Dying to flame out on TZA again.....

DCFusor's picture

So, now that the news is almost here, it's almost time to sell.  Would have been dumb to sell before, no?

Fíréan's picture



disabledvet's picture

they lied. they also helped others lie. but it was was was because they ran things. "kinda ran things." it gets complicated...perhaps if it was put to music that would help?

NOTW777's picture

many more simple questions.

if greek debt can be magically cut in half with a government pronouncement why would anyone with real capital lend

is cds obsolete

broke433's picture

schiff is a deuch, ignore his ass

PaperBear's picture

Youtube Bulletin by 91177info   (31 minutes ago)

RIP Scott Olsen No f**king way.
Hansel's picture

Not that I don't think it is possible --a fractured skull will do that-- but I'd like to see confirmation.

edit: The twitterverse only says he has lapsed into a coma.

JohnG's picture

Anonymous • Send a Get Well Card to : U.S.M.C. Scott Olson, Highland Hospital, 1411 East 31st Street, Oakland, CA 94602


Mesquite's picture

Medically induced...They do that sometimes, to save the patient..!!!

devo's picture

I thought Goldman printed all lies/garbage. Is that only true when it's bullish? I mean, why should we care what Goldman says about the plan?

I know the plan is a failure because of the intent of the people who drafted it. Whether I buy stocks or not depends on if they're cheap relative to other variable. Right now they are extremely overbought. This bailout has been "priced in" for months. The suckers are buying right now.

Tyler Durden's picture

How are questions bullish? And Goldman is called out when it is wrong, not when it is bullish.

knukles's picture

Goldman's always bullish.

Imminent Crucible's picture

Not so. Goldman is bullish when they have built their long positions, and then turn bearish when they've sold and established short positions. Remember $200 oil in 2008? Goldman and Vitol worked that one like a sewing machine. Made huge money on the way to $147, and even bigger gains on the way back down to $35.


disabledvet's picture

"smartest men in the room"...and willing to say so in public. Amazingly even before Congress itself--a direct line right to you and me. The first part sounds familiar. The ending...not so much. Imagine a hearing on "un-American activities" in this day and age. Then it was the Korean War. Now "it's a war on terror." I've gone in many ways "pretty much everywhere"...but that's one place i'm uncertain if i would go. But when I see men like Senator McCain or Senator Levin of Michigan I know without a shadow of a doubt they stand with us and fight for what we believe in. Often times the hardest fight is to fight for what you believe in and not what others want or need. Doing so means you will be tortured...and i mean that literally. You will will will die. And there are men who exist to make sure you know "those three" are their raison de etre. That's their idea of a "welcome home."

Jones79's picture

i am surprised that people on here know vitol.  they are expansive and rarely in the news. 

Irish66's picture

Leverage? 50 to 1?

Mercury's picture

11. What’s the deal with sovereign CDS?

So, is CDS now just another componant of Farcism and the reality distortion field that surrounds the individual’s relationship to the state in the “free world” ??

Or is it simply the case that CDS buyers/holders are just now waking up to the fact that they are and always have been beholden to a reality that is whatever some Credit Event Determination Committee says it is.

I’ve never been much of a CDS fan as it has always seemed to me that too many fallible human beings and institutions (but no central clearing authority) stand between you and your money when what you’re insuring against actually happens.


semperfi's picture

here's what CDS is :

- Credit Default Suckers
- Credit Default Swindle

A fool and his money are soon parted

NOTW777's picture

look at the candle on $tyx,  TBT

NOTW777's picture

how are increasing interest rates and soaring energy prices bullish for recovery in debt ridden societies?

knukles's picture

And so it's all good, right?
Like my favorite androgenous FrauMeister, Angie of the Snow White Untouched Upper Inner Thighs said the othr day on the telly:

"Zair R menee detailz zat hav to B verket out, like how eet vill verk.

I'm falling in love all over again :)
Or am I just glad to see her!

Hansel's picture

It's funny that people think a European deal was announced today.  It was the same damn announcement they've been making all along.  "Details to follow."

That said, come on S&P 1300 by the close!  Get those margin calls out, cover those shorts!  LOL.

junkyardjack's picture

A lot of shorts are going to be brown's picture

When the Sovereign Nation of Goldmanistan has questions you best pay attention.  Also, regarding the GDP numbers....I spent about 3k more last month then I wanted to because I was robbed at two of my properties....had to repurchase my companies tools and we bought a video camera system.....that's some real high quality GDP BABY!!!..and we didn't call the Police because in the 10 times I have called the cops in the last decade we did not have one item recovered....

The Axe's picture

No need for Q3   now.......craziest 2 day rally ever.....

Deadpool's picture

wrong. you need to watch the 10year rate. today's euphoria is about Europe, soon the lenses will turn to America and the super-duper debt committee if CA, NY or IL don't default first.

topcallingtroll's picture

When shorts totally capitulate it will be time to worry about bad news.

People are tired of bad news and will ignore it for now.

Party on.
Emerging markets are hot! So are emerging chics.

peekcrackers's picture

well the only other investment that I can come up with,  going by what Tyler Durden posted , would be Au Ag in hand!  i cant see any other counter party risk to PMs Phys , looks like the best wat to hedge against Hyper or deflation

mynhair's picture

Guess there is no such thing as 'overbought' when hot money is involved.

gwar5's picture

Things that make you go Hmmm.....

11. Why hasn't Goldman Sachs just cooked the ECB books for them already to show they have 2.5 Trillion?


SeverinSlade's picture

GS vaguely asks this question but when we get an answer (likely at the G20 meeting) then I think that's when the SHTF again for equities.

"8. What are the implications of a leveraged EFSF for government ratings?"

My prediction:

G20 Summit announces details for today's announcement which quickly leads to a downgrade of France leading to the EFSF losing substantial firepower.  Dollar strengthens as the Euro falls.  Bernanke is then free to announce QE3 which then leads to the ECB launching it's own money printing scheme.


Everybodys All American's picture

Definately an important answer and we will find out soon enough. Another thing to bear in mind is what effect further QE has on the credit rating in the US. The Fed already levered at 53:1 means there is not a whole lot of leg room to do much more buying. We shall see son if Bernanke is still in a box.

quacker's picture

Why doesn't Goldman just say what it really wants - the whole damn thing backed by US dollars.