Posts Tagged ‘Andrew Ross Sorkin’

Goldman Goes Rogue – Special European Audit To Follow

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  

Goldman Goes Rogue – Special European Audit To Follow

squidCourtesy of Simon Johnson at Baseline Scenario

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…
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Goldman To Clients: We May Be Front-Running You

Goldman To Clients: We May Be Front-Running You

Courtesy of Courtney Comstock and John Carney at Clusterstock/The Business Insider

goldman sachs' Lloyd BlankfeinIt 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."

Via Dealbook, here’s the full memo:

Dear client,

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


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Goldman and Morgan Stanley were this close to bankruptcy

Video: Goldman and Morgan Stanley were this close to bankruptcy

H/tips to Edward Harrison at Credit Writedowns & Prieur du Plessis

Inside story of Too Big To Fail, with Andrew Ross Sorkin

Highlights:

1. Behind the scenes moment by moment account of financial crisis.

2. The story we know becomes a human drama about what many of these people knew in advance, but didn’t tell us.

3. Big, big, big surprise, how close we were to the financial abyss.

4. Remarkable surprises--the incestuous nature of these relationships between 20 or 30 men, how those relationships ended up impacting billion dollar decisions. 

5. Dominoes of Morgan Stanley, Goldman Sachs and then General Electric would have fallen, but Paulson, Geithner "E-Harnony," and Bernanke stopped it.  

 

 


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Phil's Favorites

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

SEC May Regret the Day It Allowed Leveraged ETFs (Bloomberg)

That bit of truism is all you need to understand the rapid rise in leveraged exchange-traded funds, which were created in 2006 as a way for investors to double their exposure to stock indices.

Trump's Big Problems: Anemic Private Investment and Weak Productivity (Forbes)

Why was the Great Depression so deep, and why did it drag on for so long? According to impressive research by Robert Higgs of the Independent Institute, it was because President Roose...



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Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

SEC May Regret the Day It Allowed Leveraged ETFs (Bloomberg)

That bit of truism is all you need to understand the rapid rise in leveraged exchange-traded funds, which were created in 2006 as a way for investors to double their exposure to stock indices.

Trump's Big Problems: Anemic Private Investment and Weak Productivity (Forbes)

Why was the Great Depression so deep, and why did it drag on for so long? According to impressive research by Robert Higgs of the Independent Institute, it was because President Roose...



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ValueWalk

Past Empires That Can Tell Us About The Future In Four Maps

By Mauldin Economics. Originally published at ValueWalk.

Studying history has little practical utility in averting past outcomes. We are doomed to repeat history whether we know it or not.

The value in knowing history is not that one might prevent its recurrence. Its value is that it allows you to identify those things that don’t change and that shape events… no matter the year on the calendar.

That’s why I want to show you four maps that highlight what parts of the world looked like in the past… and that point the way toward what may come in the future.

China 

The map below simplifies a great deal of China’s ancient and imperial history. It shows seven states that fought for control of the historic Chinese heartland during the Warring States period (475–221 BC).

...



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Zero Hedge

China's Largest Dairy Operator Suddenly Crashes 90% To Record Low, Muddy Waters Says "Worth Close To Zero"

Courtesy of ZeroHedge. View original post here.

In December 2016, Muddy Waters' Carson Block said China's largest dairy farm operator, Hong-Kong listed China Huishan Dairy Holdings Co., is "worth close to zero" and questioned its profitability in a report. Today, with no catalyst, it suddenly almost is. The stock collapsed over 90% in minutes to a record low.

The sudden crash wiped out about $4.2 billion in market value in the stock, which is a member of the MSCI China Index.

...



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Kimble Charting Solutions

Gold Bugs; Stellar performance stage set again

Courtesy of Chris Kimble.

From 2001 to 2011, would you have rather owned the S&P 500 or Gold Miners (Gold Bugs Index/HUI)? If you answered the Gold Bugs index, you would be correct. The left chart below compares the performance of the Gold Bugs Index and the S&P 500. From 2001 to 2011, the Gold Bugs index out performed the S&P 500 by 1,400% (left chart below).

Since 2011, miners have been weaker than the S&P 500 by a large percent. Could the stage be for another period where the mining stocks are going to be stronger than the broad markets again?

...

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Chart School

Semiconductors Recover at 20-day MA

Courtesy of Declan.

Yesterday's selling didn't follow through with additional losses, instead, indices dug in at lows and managed to recover some of yesterday's selloff.  The best recovery came from the Semiconductor Index. It gained over 1% as it bounced off its 20-day MA. However, it wasn't enough to stop a 'sell' trigger in the MACD and CCI.


Next is the Nasdaq 100. It staged a recovery, but not from a typical support level. Unfortunately, it has a MACD trigger 'sell' from early March and a new 'sell' trigger between the -DI an...

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Members' Corner

Natterings

Check out some new posts from our friend The Nattering Naybob. 

The Big Lebowski Sequel?

Taking a "resp-shit" or "potty break" from "in the Toilet Thursday" or "Thursday's in the Loo"... One of our favorite scenes from the 1998 cult classic The Big Lebowski, the ash can scene where Walter Subchak (John Goodman) eulogizes the departed Donnie (Steve Buscemi) with Jeffrey Lebowski (Jeff Bridges) looking on.

Keep reading: ...



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OpTrader

Swing trading portfolio - week of March 20th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Digital Currencies

Bitcoin Tumbles Below Gold As China Tightens Regulations

Courtesy of Zero Hedge

Having rebounded rapidly from the ETF-decision disappointment, Bitcoin suffered another major setback overnight as Chinese regulators are circulating new guidelines that, if enacted, would require exchanges to verify the identity of clients and adhere to banking regulations.

A New York startup called Chainalysis estimated that roughly $2 billion of bitcoin moved out of China in 2016.

As The Wall Street Journal reports, the move to regulate bitcoin exchanges brings assurance that Chinese authorities will tolerate some level of trading, after months of uncertainty. A draft of the guidelines also indicates th...



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Mapping The Market

Congress begins rolling back Obama's broadband privacy rules

Courtesy of Jean Luc

I am trying to remember who on this board said that people wanted to Trump because they want their freedom back. Well….

Congress begins rolling back Obama's broadband privacy rules

By Daniel Cooper, Endgadget

ISPs will soon be able to sell your most private data without your consent.

As expected, Republicans in Congress have begun the process of rolling back the FCC's broadband privacy rules which prevent excessive surveillance. Arizona Republican Jeff Flake introduced a resolution to scrub the rules, using Congress' powers to invalidate recently-approved federal regulations. Reuters reports that the move has broad support, with 34 other names throwing their weight behind the res...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

...

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Biotech

The Medicines Company: Insider Buying

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

I'm seeing huge insider buying in the biotech company The Medicines Company (MDCO). The price has already moved up around 7%, but these buys are significant, in the millions of dollars range. ~ Ilene

 

 

 

Insider transaction table and buying vs. selling graphic above from insidercow.com.

Chart below from Yahoo.com

...

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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