Here’s the full article by Simon Johnson that Joe at Business Insider referred to in the last post. One of the most outrageous aspects of the financial crisis fall-out is that we let this behavior go on and on after it became apparent, even to outsiders, that conflicts of interest, unethical activity, and perhaps out-and-out fraud, were the rules in government-financial sector marriages, no matter what the official explanations. - Ilene
At 9:30 pm on Sunday, September 21, 2008, Goldman Sachs was saved from imminent collapse by the announcement that the Federal Reserve would allow it to become a bank holding company – implying unfettered access to borrowing from the Fed and other forms of implicit government support, all of which subsequently proved most beneficial. Officials allowed Goldman to make such an unprecedented conversion in the name of global financial stability. (The blow-by-blow account is in Andrew Ross Sorkin’s Too Big To Fail; this is confirmed in all substantial detail by Hank Paulson’s memoir.)
We now learn – from Der Spiegel last week and today’s NYT – that Goldman Sachs has not only helped or encouraged some European governments to hide a large part of their debts, but it also endeavored to do so for Greece as recently as last November. These actions are fundamentally destabilizing to the global financial system, as they undermine: the eurozone area; all attempts to bring greater transparency to government accounting; and the most basic principles that underlie well-functioning markets. When the data are all lies, the outcomes are all bad – see the subprime mortgage crisis for further detail.
A single rogue trader can bring down a bank – remember the case of Barings. But a single rogue bank can bring down the world’s financial system.
Goldman will dismiss this as “business as usual” and, to be sure, a few phone calls around Washington will help ensure that Goldman’s primary supervisor – now the Fed – looks the other way.
But the affair is now out of Ben Bernanke’s hands, and quite far from people who are easily swayed by the White House. It goes immediately to the European Commission, which has jurisdiction over eurozone budget issues. Faced with enormous pressure from those eurozone countries now on the hook for saving Greece, the Commission will surely launch a…
It looks like Goldman Sachs was starting to worry about all those stories claiming that the firm trades against clients’ interest, takes positions that are different from what they told clients, and favors some clients with advance word of its market views.
So it sent an email making it perfect clear: Goldman is totally doing those things.
A senior Goldman executive sent an e-mail to clients on Tuesday warning that the firm may have shared investment ideas with the firm’s proprietary trading group or some clients before sharing them with others. It said it may trade ahead of disclosing those idea to clients, and may trade out of positions or change its mind about the ideas without warning.
Andrew Ross Sorkin at the New York Times obtained a copy of the email.
It was basically a big fat caveat emptor to clients. Some highlights:
"We may trade, and may have existing positions, based on Trading Ideas before we have discussed those Trading Ideas with you."
"We will also discuss Trading Ideas with other clients, both before and after we have discussed them with you."
"You should not consider Trading Ideas as objective or independent research or as investment advice."
"Any opinions that we express when we discuss Trading Ideas with you will be our present opinions only and we will not have any obligation to update you in the event of a change of circumstances or a change of our opinion."
We may from time to time discuss with you Trading Ideas generated by our Fundamental Strategies Group. As part of our commitment to managing conflicts of interest appropriately, this message is to explain how the Fundamental Strategies Group interacts with other parts of our organisation and how that impacts on the Trading Ideas.
The Fundamental Strategies Group is a group of cross-capital structure desk analysts employed by our Securities Divisions to assist our traders. They develop Trading Ideas in conjunction with traders. We may trade, and may have existing positions, based on Trading Ideas before we have discussed those Trading Ideas with you. We may continue to act on Trading Ideas, and may trade out of any position, based on Trading
Political pundits throughout the land are tripping over each other to compose the latest bland, uninsightful screed proclaiming the death of the Republican Party. This makes sense, because the primary purpose of a political pundit is to state the obvious years after it’s already become established fact to every...
It's time again for our weekly gasoline update based on data from the Energy Information Administration (EIA). The price of Regular and Premium five and four cents each, respectively, from last week. According to GasBuddy.com, California has the highest average price for Regular at $2.79 and San Francisco is averaging $2.96. South Carolina has the cheapest at $1.83. The WTIC end of day spot price closed at 43.13, a decrease of 2.81 from this time last week.
How far are we from the interim high prices of 2011 and the all-time highs of 2008? Here's a visual answer.
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Below looks at a chart of Silver prices over the past 8-years. After declining sharply, Silver hit its 38% Fibonacci retracement level twice at (1). After failing to break above Fibonacci retracement resistance, selling pressure picked up and Silver fell hard.
CLICK ON CHART TO ENLARGE
Silver is now testing its 23% Fibonacci retracement level and falling resistance at (2), inside of a short-term rising wedge pattern.
By Jacob Wolinsky. Originally published at ValueWalk.
Relypsa Inc (NDAQ:RLYP) — to be acquired by Galenica AG (VTX:GALN) for $32 per share in cash is soaring this morning up about 58 percent at the time of this writing in early morning. On the other hand shares of Galenica are down on the announcement by about 8 percent. What are the details of the deal? Here is what the sell side analysts are saying about the pharma news.
Relypsa Inc (NDAQ:RLYP) bid – analysts react
Relypsa will be acquired by Galenica for $32 per share, a 59% premium over the last closing price. We have thought that Relypsa would likely be acquired at some point, given the opportunity to grow Veltassa to be a significant commercial brand, ...
Companies around the world are exploring blockchain, the technology underpinning digital currency bitcoin. In this Blockchain unleashed series, we investigate the many possible use cases for the blockchain, from the novel to the transformative.
Most people agree we do not need to know how a television works to enjoy using one. This is true of many existing and emerging technologies. Most of us happily drive cars, use mobile phones and send emails without knowing how they work. With this in mind, here is a tech-free user guide to the blockchain - the technology infrastructure behind bitcoin...
After a three-year bull run that more than quadrupled its value by its peak last July, IBD’s Medical-Biomed/Biotech Industry Group plunged 50% by early February, hurt by backlashes against high drug prices and mergers that seek to lower corporate taxes.
This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible. Feel free to contact me directly at email@example.com with any questions.
Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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