More on GoldmanSachs

[Craig234]

So, how do they make all these billions outsdie 'tradiitional banking', anyway?

There are many posts scratching the surface and books, but here's one link with the Euro activity tidbits.

IMO our two most important issues are the corruption of politics by wealth, and economic issues including the concentration of wealth, and Goldman Sachs in in the middle of both.

In my link there's a link for you to notify Congress, which is now debating finance reform (don't hear that much on the news), to regulate derivatives, to treats Credit Default Swaps like the insrance they are.

Sounds esoteric, why bother? Because this might be the window for years to come, and deregulating Glass-Steagel seemed esoteric at the time a decade ago.

Our democracy is broken that very few citizens will bother to get involved in this. You have an interest to get involved. Wall Street is very involved. Can democracy work a bit here?

http://www.commondreams.org/view/2010/03/02-5

 

[Zebo]

No.

 

[heyheybooboo]

Goldman is already betting against their own bundled carbon commodities.







--

 

[halik]

/facepalm

Jewish conspiracy to steal our money, they're the same thing as the fed

Also i thought posting common dreams crap here was verboten (along with free republic and similar drivel)?

On the more serious note, I don't think anyone disagrees that moving CDS to an exchange is a bad thing; it's just site like these that make that instrument seem like it's a roulette for hedge funds and such.

The better question here is whether it's the tail wagging the dog or the other way around: CDS and the underlying debt are mathematically linked, so is it investors buying up protection / selling the debt or alternative strategies funds taking speculative positions? There's definitely some degree of reflexivity in this, but we saw it as a buying opportunity.

 

[Narmer]

Those European governments knew exactly what they were doing, which was to hide their debt. The banks did nothing illegal. Also, GS is a relatively conservative company. I think a lot of this bruhaha is more envy than hatred. If you have a problem, hate the game, not the players.

 

[halik]

Those European governments knew exactly what they were doing, which was to hide their debt. The banks did nothing illegal. Also, GS is a relatively conservative company. I think a lot of this bruhaha is more envy than hatred. If you have a problem, hate the game, not the players.

I find it amusing that people try to extend the "predatory lending" argument to sovereign governments.

Think of the poor hardworking countries like Greece! These predatory banks just told them to sign on the dotted line and they'd get that shiny new house euro membership they wanted. There needs to be more regulation to protect hardworking countries like Greece from these predatory lenders!

 

[Delita]

/facepalm

Jewish conspiracy to steal our money, they're the same thing as the fed

Also i thought posting common dreams crap here was verboten (along with free republic and similar drivel)?

On the more serious note, I don't think anyone disagrees that moving CDS to an exchange is a bad thing; it's just site like these that make that instrument seem like it's a roulette for hedge funds and such.

The better question here is whether it's the tail wagging the dog or the other way around: CDS and the underlying debt are mathematically linked, so is it investors buying up protection / selling the debt or alternative strategies funds taking speculative positions? There's definitely some degree of reflexivity in this, but we saw it as a buying opportunity.

I see you've read some Soros.

 

[Delita]

Those European governments knew exactly what they were doing, which was to hide their debt. The banks did nothing illegal. Also, GS is a relatively conservative company. I think a lot of this bruhaha is more envy than hatred. If you have a problem, hate the game, not the players.

Couldn't agree more on this. Good article over on Aleph blog with a similar take:

http://alephblog.com/2010/02/27/you-cant-cheat-an-honest-man/

 

[lothar]

So, how do they make all these billions outsdie 'tradiitional banking', anyway?

There are many posts scratching the surface and books, but here's one link with the Euro activity tidbits.

IMO our two most important issues are the corruption of politics by wealth, and economic issues including the concentration of wealth, and Goldman Sachs in in the middle of both.

In my link there's a link for you to notify Congress, which is now debating finance reform (don't hear that much on the news), to regulate derivatives, to treats Credit Default Swaps like the insrance they are.

Sounds esoteric, why bother? Because this might be the window for years to come, and deregulating Glass-Steagel seemed esoteric at the time a decade ago.

Our democracy is broken that very few citizens will bother to get involved in this. You have an interest to get involved. Wall Street is very involved. Can democracy work a bit here?

http://www.commondreams.org/view/2010/03/02-5

Goldman is not a "traditional" bank.

Nothing needs to be regulated.
What Goldman esesentially is doing is doubling down their bet at the scraps table.
If they win, they win the lottery. If they lose, they lose big.

 

[ayabe]

It's all about ethics, if you feel that an institution should be allowed to fuck people as a business model as long as they don't explicitly break any laws, then you are probably a fan of GS and other houses of ill repute such as payday lenders.

 

[halik]

I see you've read some Soros.

I think he's correct on the behavioral aspects of market and the reflexive nature of speculation, especially in light of the last couple bubbles (tech, real estate, crude, gold) where you can see the asset prices get out of line in terms of their purchasing power for extended periods of time.

That being said, just about all speculation starts with an underlying issue that is real; it's just the impact of the issue that can be magnified by everyone jumping on the bandwagon.

 

[ayabe]

Goldman is not a "traditional" bank.

Nothing needs to be regulated.
What Goldman esesentially is doing is doubling down their bet at the scraps table.
If they win, they win the lottery. If they lose, they lose big.

Bullshit, they are now a bank holding company with the same access to Federal funds as Bank of America.

They can borrow money from the Fed at virtually no interest and then do whatever they want with it, including buying lots of Treasury Bonds that pay 3%. Yeah that's right, joe the taxpayer is guaranteeing profits for GS.

 

[halik]

Bullshit, they are now a bank holding company with the same access to Federal funds as Bank of America.

They can borrow money from the Fed at virtually no interest and then do whatever they want with it, including buying lots of Treasury Bonds that pay 3%. Yeah that's right, joe the taxpayer is guaranteeing profits for GS.

Which treasury instruments yield 3% overnight?

 

[Narmer]

Bullshit, they are now a bank holding company with the same access to Federal funds as Bank of America.

They can borrow money from the Fed at virtually no interest and then do whatever they want with it, including buying lots of Treasury Bonds that pay 3%. Yeah that's right, joe the taxpayer is guaranteeing profits for GS.

They're doing the same for thousands of other banks around the country. Why single out GS or Wall Street?

 

[lothar]

Bullshit, they are now a bank holding company with the same access to Federal funds as Bank of America.

They can borrow money from the Fed at virtually no interest and then do whatever they want with it, including buying lots of Treasury Bonds that pay 3%. Yeah that's right, joe the taxpayer is guaranteeing profits for GS.

So can every other bank in the country.
What's your point?

 

[MotF Bane]

Goldman is not a "traditional" bank.

Nothing needs to be regulated.
What Goldman esesentially is doing is doubling down their bet at the scraps table.
If they win, they win the lottery. If they lose, they lose big.

And if they lose big, the feds will step in and take care of them.

 

[ayabe]

Which treasury instruments yield 3% overnight?

What does that matter? I'd love to take advantage of this deal, wouldn't you?

 

[ayabe]

So can every other bank in the country.
What's your point?

You say they're not a traditional bank and therefore don't need to be regulated. Again, it's a matter of having your cake and eating it too, they are afforded the same benefits as a real commercial bank without any of the restrictions.

 

[yllus]

Think of the poor hardworking countries like Greece! These predatory banks just told them to sign on the dotted line and they'd get that shiny new house euro membership they wanted. There needs to be more regulation to protect hardworking countries like Greece from these predatory lenders!

I got a chuckle out of imagining that, thanks.

 

[Delita]

You say they're not a traditional bank and therefore don't need to be regulated. Again, it's a matter of having your cake and eating it too, they are afforded the same benefits as a real commercial bank without any of the restrictions.

You obviously have no idea whats going on here.

 

[ranmaniac]

Will be interesting how Goldman will play their cards with Spain, Portugal, Ireland etc.
I'm a bit worried about the outcome of California's budget crisis. Can only imagine the austerity measures that California will undergo, maybe a VAT on plastic surgery.

 

[jman19]

What does that matter? I'd love to take advantage of this deal, wouldn't you?

You just said GS can borrow at near nothing and get 3% on treasuries. I think Holik's question matters a whole lot actually.

 

[Craig234]

You just said GS can borrow at near nothing and get 3% on treasuries. I think Holik's question matters a whole lot actually.

Halik misrepresented what Ayabe said. Ayabe said they pay 3% - that's an annual rate. Halik misrepresented what Ayabe said in asking 'what treasuries pay 3% OVERNIGHT'? [my caps for emphasis]

Why not say misrepresenting what Ayabe an issue, instead of defendiong the misrepresentation? Isn't Ayabe's point about all this moeny being made available so cheaply for their profit the point?

 

[jman19]

Halik misrepresented what Ayabe said. Ayabe said they pay 3% - that's an annual rate. Halik misrepresented what Ayabe said in asking 'what treasuries pay 3% OVERNIGHT'? [my caps for emphasis]

Why not say misrepresenting what Ayabe an issue, instead of defendiong the misrepresentation? Isn't Ayabe's point about all this moeny being made available so cheaply for their profit the point?

I don't think you get what Halik is saying... It seems perfectly reasonable to me to compare overnight borrowing rates with overnight lending rates.

 

[halik]

Halik misrepresented what Ayabe said. Ayabe said they pay 3% - that's an annual rate. Halik misrepresented what Ayabe said in asking 'what treasuries pay 3% OVERNIGHT'? [my caps for emphasis]

Why not say misrepresenting what Ayabe an issue, instead of defendiong the misrepresentation? Isn't Ayabe's point about all this moeny being made available so cheaply for their profit the point?

That's actually my point, the fed funds rate or repo rate in question are sitting at 0-.25% for overnight term. That is, you'd have to find something with a higher yield for the same term to make profit.

There are enough institution with access to the discount window that any excess return is arbed away (ie the spread for say borrowing at the discount window and lending at overnight libor only compensates you for counterparty risk)