Goldman Sachs: Wall St. Gangstas

[Ichingcarpenter]

In a scene reminiscent of the St. Valentine's Day Massacre, Goldman Sachs has emerged victorious in the recent Wall St. Gang Wars. Like all good Organized Criminals, the GS gang has high-level officials on their payroll that assist them in getting away with their nefarious deals. In this case look no further than Secretary of Treasury, Henry Paulson, the former Chairman and CEO of Goldman Sachs.


While other Wall St. firms were coming to a bloody end, the GS gang was prospering.

Excerpts from "How Goldman Sachs defies gravity" - September 20, 2007, Fortune Magazine.
As the credit markets fell apart over the summer, causing the prices of hundreds of billions of dollars of mortgage-backed bonds to plunge, Goldman Sachs had already positioned itself so that it would profit massively from a decline in those securities. Thursday, Goldman reported earnings for its fiscal third quarter that were far above expectations.

Amassing a large bearish position in mortgages would have required planning and direction from a senior level. On the conference call, Viniar said the bet was executed across the whole mortgage business, implying that it wasn't the work of one swashbuckling trader or trading desk. Of course, the prescience of the short sale would seem to confirm the view that Goldman is the nimblest, and perhaps smartest, brokerage on Wall Street.



Was this really because the GS gang was the "smartest" in 2007, or did it have insider information from the Treasury Dept. and the Federal Reserve that allowed it to time the market? Clearly the "prescience of the short sale" was a result of cheating the system. Would the GS gang place such a large "bet" without some assurances. To do otherwise would be reckless gambling. What if they lost this huge "bet"? What would have been the cost to the gang? Shouldn't Congress and the SEC be investigating this type of suspicious activity?

So the GS gang made billions on short selling in the Summer of 2007. But when the GS gang was under attack by short sellers in the past week, their man Paulson bailed them out.


http://futurenewstoday.blogspot.com/2008/09/goldman-sachs-wall-st-gangstas.html



How Goldman Sachs defies gravity
While the credit markets went sour, one investment bank made a huge, shrewd bet - and seems to have won big. Fortune's Peter Eavis explains the stunning strategy.




While several businesses were surprisingly strong in a difficult period, the chief contributor to the earnings blowout were trades that made money from price drops in mortgage-backed securities. Goldman indicated this in its press release when it said that "significant losses" on certain bonds were "more than offset by gains on short mortgage products." (In Wall Street parlance, being "short" a stock or bond means that you will make money if it goes down in price.) "Goldman Sachs showed an ability to not only protect itself from the problems in the market but also to capitalize on them," says Mike Mayo, banks analyst at Deutsche Bank (Mayo rates Goldman a buy.)

When asked on a public conference call Thursday, Goldman's chief financial officer David Viniar declined to give a number for the amount of money Goldman made on its mortgage short in the third quarter.


http://money.cnn.com/2007/09/20/magazines/fortune/eavis_goldman.fortune/index.htm

[Ichingcarpenter]

1. Sec. Poulson was the Chairman and Chief Executive Officer of Goldman Sachs.

Henry Merritt "Hank" Paulson Jr. (born March 28, 1946) is the United States Treasury Secretary and member of the International Monetary Fund Board of Governors. He previously served as the Chairman and Chief Executive Officer of Goldman Sachs.


http://en.wikipedia.org/wiki/Henry_Paulson

[crickets]

2. Kick -nt