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Goldmans Sachs Benifits from Global Economic Downturn


Guest RT
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More evidence today shows the global impact of Wall Streets troubles, particularly in Greece. Today United States federal chairman Ben Bernanke told a senate banking committee that the Securities and Exchange Commission is looking into Goldman Sachs and other Wall Street firms use of investment instruments to make bets that Greece would default on its debt.

 

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Guest Krypto

goldman-sachs-100bill.jpg

 

For years, Wall Street whispered that Goldman Sachs profited handsomely by trading ahead of — or even against — its own clients. On Tuesday, a Goldman executive made an unusual admission that, in some cases, the rumors were true, Andrew Ross Sorkin writes in The New York Times.

 

In an e-mail message to select clients, Thomas C. Mazarakis, the head of Goldman's fundamental strategies group, acknowledged that his unit often provided investment ideas that the firm had already traded on. Sometimes Goldman has even taken the opposite approach, betting against particular instruments that the group has recommended.

 

"We may trade, and may have existing positions, based on trading ideas before we have discussed those trading ideas with you," he wrote.

 

The statement comes as the firm faces growing criticism over its role in the financial crisis, and is a rare acknowledgment of Goldman's conflicts with certain of its clients.

 

"The way that the business is evolving is that it is laden with conflicts of interest," Anant K. Sundaram, a professor of finance at Dartmouth's Tuck School of Business, said.

 

Last month, the Securities and Exchange Commission and Congress began investigating how Goldman and other firms had created bundles of mortgages known as collateralized debt obligations, or C.D.O.'s, that were sold to investors at the same time that the banks had privately bet against the instruments. Some of these C.D.O.'s later fell in value, creating losses for those clients who bought them — and profits for Goldman.

 

Goldman also prevailed upon ratings agencies to assign the C.D.O.'s high investment grades, even as it planned to short, or bet against, the securities.

 

The e-mail message is a blunt acknowledgment of what often appeared in the fine print of Goldman's marketing materials. Lucas van Praag, a Goldman spokesman, said in a statement: "We have been providing this disclosure, which we think is best practice, for a number of years and there is nothing new in the disclosure you were sent."

 

But Mr. Mazarakis's letter also highlights the enormous clout wielded by Goldman's army of traders, many of whom make enormous bets using the firm's own capital and who provide the bulk of the firm's immense profits. Goldman insists that its trading business is done on behalf of its clients.

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Guest Nicholas

More evidence today shows the global impact of Wall Streets troubles, particularly in Greece. Today United States federal chairman Ben Bernanke told a senate banking committee that the Securities and Exchange Commission is looking into Goldman Sachs and other Wall Street firms use of investment instruments to make bets that Greece would default on its debt.

 

It was the Greek government was faking the numbers.

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Guest OC Tommy

Make no mistake my friends: Goldman Sachs benefits whether or not the market goes up, down, or sideways - they have expert mathematicians and physicists that are paid to make sure this is the case.

Anyone ever heard of getting paid on "order flow?"

It's quite interesting.

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  • 1 year later...
Guest Vampire Squid

BBC Speechless As Trader Tells Truth: "The Collapse Is Coming...And Goldman Rules The World"

 

http://www.youtube.com/watch?v=lqN3amj6AcE

 

Go to 2:37

 

Ministers from the world's richest nations are reportedly on the way to agreeing a deal for troubled eurozone countries.

 

Following the IMF meeting in Washington, the BBC understands that three elements have been discussed.

 

They include a so-called "haircut" of Greece's sovereign debt, meaning institutions holding Greek debt would have to write off half of what they were owed.

 

The plan also envisages an increase in the size of the European Union bailout fund to two trillion euros.

 

European governments hope to have the plan in place in five to six weeks.

 

But one independent market trader - Alessio Rastani - told the BBC the plan "won't work" and that people should be trying to make money from a market crash.

 

 

http://www.bbc.co.uk/news/business-15059135

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