Goldman Sachs

[NoelWatson]

Murcielago_Boy said:

3. We're going to base our hedging strategy on a government bailout of a counterparty - AIG which we know will happen because of our inside connections (Hank Paulson).

You didn't answer my question about who was shorting AIG shares. Anyway, how did GS know AIG were going to gneed bailing out in advance?

[Rocksteadyeddie]

Murcielago_Boy said:

Can someone explain to me how
a) this is ethical based on the assumption that they supposed to be providing SOUND advice to their clients?

It's not ethical. Nor does it have to be. Once a counterparty is classified as a professional investor they are owed nothing by the bank. Those are the rules of the FSA (and SEC) and will have been explained when the client started dealing with Goldmans. A professional investor is deemed to know as much as the bank selling the product. They will also have been dealt with on an 'execution only' basis so no advice will have been given. So, yes, they can go hang.

Murcielago_Boy said:

b) why it is considered fair to use inside government connections that can advise my company early, of impeding government decisions upon which I can then maximise the profits unfairly.

If this is true then they would presumably be guilty of insider trading. If there was any evidence then I would expect the SEC to come down on them like a tonne of bricks. what better way of hanging Goldmans out to dry?

[anonymous-user]

Murcielago_Boy said:

1. These are "professional investors"

yes. IKB (one of the major investors) even helped ASA select the reference assets

Murcielago_Boy said:

Professional right? So F**K 'em. They should do their due diligence. Their problem.

yep. IMO

Murcielago_Boy said:

2. We KNOW that these securities are junk

some people thought they were junk. you could KNOW house prices were going to tank in 2004, 2005, 2006 and you'd have been right, eventually, but if you'd have bet on it then you'd have been killed... at any one time half the mkt thinks somethings going up the other half thinks its going down, that is why the price is where it is. looking back and saying half the people 'knew' is absurd.

Murcielago_Boy said:

3. We're going to base our hedging strategy on a government bailout

zzz. been done a million times. CDS are collateralised. of the 12bn aig owed gs, gs already had 10bn(ish) in collateral, and further cds on aig hedging the remaining 2bn. this is really simple stuff.

Murcielago_Boy said:

Finally, my understanding is that Paulson actually had his holdings put in trust and he had to liquidate nothing.

nope he had to sell them. the real scandal is that as a forced sale they were tax free!!! http://www.marketwatch.com/story/paulson-files-to-...

for the record i absolutely no connection ever with gs and LOATHE defending them, but on these issues i think you are completely wrong.

Edited by fbrs on Wednesday 28th April 15:52

[fido]

Fittster said:

fido said:

Fittster said:

Point B. What happens in any private industry (as long as legal) should be of no interest to the state.

Rolls-Royce, a leading engine maker, bailed out by the Heath (Conservative) Government in 1971. I think most people would agree this was a good company to bailout. Do you not agree?

I don't agree. It shouldn't be for the state to make that call.

Why not bail out woolworths, ship builders, mines, rover or any other business which failed. Who knows which businesses would fail or recover?

I don't think anyone does - but sometimes the state is the only one who can afford to help out in that situation, especially if it is of strategic importance and IMO our financial services industry belongs to that category. Also a sensible judgement (i.e. not in the court of populist media) can be made when a company was profitable before - but failed due to an almighty f8ck up. Now clearly none of the above fall into this category. Woolworths - not really world leaders in anything, and we have loads of other supermarkets anyway. BL - the government did help out several times (though perhaps not in the right way).