Posts Tagged ‘goldman sachs’

In The Mood For A Flutter

December 5, 2012

Goldman Sachs, with the interest of the general public at heart, informs us that due to an improving economy, the rise in the price of gold is now over.

Except that, personally, I am in the mood for a flutter. And this is exactly the signal I was waiting for.


We’ll check back a few years down the line.


Can you see the concentration of profits?

January 29, 2011


This is the direct and inevitable result of a debt based fiat monetary system. When the inflationary tide withdraws, profit concentrates in the financial industry till it concentrates in the entities one step removed from the creator of the currency (Goldman Sachs is also in the enviable position of being both: a member of the entity that creates the money as well as a Primary Dealer which is the entity one step removed from the creator of the currency).

… and Bob’s your uncle…



October 15, 2010

Talk of fraud is now going main stream. Even previously willfully blind media companies like CNBS are now at the very least mentioning the word. Spitzer, Ratigan, the NYT, and a handful of other media companies appear, at least momentarily, to be joining the chorus too.

The trigger this time is what is now known as Foreclosure Gate. But it could have easily been any of a plethora of other things that triggered the sudden realization that fraud is a deliberate tool of the authorities.

But Foreclosure Gate, or the deliberate choice to allow banks to disregard accounting compliance, or government giving public funds to select private companies or any of a list of other actions that are blatantly and factually illegal are only symptoms of a dynamic that is well known and that leads to a logical conclusion that, too, is known. We know why this is happening and we know how it ends.

How do we know?

Because it has happened before; several times in fact. And every time it ended the same way.

So, absolutely, let’s make a big deal of Foreclosure Gate. It is right we should and hopefully someone will get indicted.

But Foreclosure Gate is only a symptom. What we need is for someone with clout to take up the matter of the monetary system. The monetary system is THE ultimate cause of this all too predictable and politically mandated debacle.




Wall Street Pay: a record $144Billion

October 14, 2010

What is lost in the soul searching and hand-wringing (or hand rubbing depending on who you are), is that this is not a surprise. It is not and should not be a surprise.

In a debt based fiat monetary system, as the dynamic of debt based currency develops, the system must gradually but necessarily become more statist. The logic of debt based money must necessarily lead to the state becoming progressively more intrusive as it gradually and by necessity becomes the largest actor in the economy.

By implication, this means two things – first: at the outset, nominal and intrinsic value are closely related but as the fiat money dynamic develops nominal value decouples from intrinsic value at increasing speed (financial value decouples from intrinsic value) – second: as financial value runs away from intrinsic, profit gradually concentrates in fewer and fewer sectors till towards the end only the financial sector enjoys any profit. This is because the financial sector is first in line to make use of the currency thus it benefits most and, as the currency implodes, it benefits last too.


Excerpts and comments:


Profits have bounced back due to government direct and indirect intervention. Direct intervention took the form of the various support programs like TARP that gave public funds outright to banks and financial corporations. Indirect intervention takes the form of preferential and exclusive accounting treatment of financial institutions that are allowed to disregard losses. Indirect intervention is in fact much more insidious and destructive because as government allows banks to appear solvent, banks can attract institutional money from pension and insurance funds for example. Thus, the public is robbed twice. The first time it is done overtly if by coercion but the second time it is done by stealth without the express knowledge of the public.


Economic conditions!? Usage of food stamps is at an all time high and increasing, unemployment as counted by U6 is at an all time high and increasing, the currency markets are in disarray, there is gross industrial overcapacity and waning demand globally, Credit Default Swaps on sovereign debt are increasing … and bank bonuses reflect market conditions???? Can you imagine what bonuses would be like if the economy was actually doing well?


Compensation is taken out of total revenue. When government allows banks to appear solvent, banks can attract institutional money thus enhancing total revenue. Do you understand how the gig works?


The main stream media as investment timing tool (or contrary indicator)

September 1, 2010

You all know I am invested in gold and have advised friends and clients over the past eight years to invest in gold too if only a part of their savings.

You all know that for the first time in 8 years I became very cautious on gold investments about two weeks ago when Goldman Sachs produced a nine page piece of “research” exhorting all and sundry to invest in gold.

Today, Business Week front page leads with gold:


And then there is also this:


…… things that make you go “hmmmm”!!!

In the above chart you can see the gold bull market began around 2000. In the two smaller charts below the main chart, you can see the evolution of the S&P 500 and of the 30 year US Treasury Bond priced in gold bullion.

The main stream media coming out at this juncture to tell everyone that gold is a good investment is not at all timely. Not by a country mile.

I am, generally speaking, still bullish on gold for the long term; that would be for the next five to ten years. But I am also mindful that when a mainstream publication finally catches on to an investment trend and talks about it, it is usually time to start taking some profits and bide your time. The clincher, in my humble opinion, is of course the fact that Goldman Sachs should be waxing lyrical about investing in gold. The rationale here is that generally speaking, since banks have been allowed to run proprietary trading desks, trading can only be profitable if someone buys an investment from you at a higher price than what you paid for it. And since banks’ trading desks have been fabulously profitable for the past few years,  that tells me that in the short term (the short term could be some weeks and/or months) GS needs to unload a bunch of positions and they will be unloading them on the people their report was aimed at.

The moral of the story is this. I am still long bullion and some mining company shares. However, I have significantly cut back on mining company shares in the past ten days and have a good chunk of cash on hand.

If I am right, I think I will be doing what Goldman Sachs is planning on doing. That is, sell a bunch of positions at the high, run them down to lower levels and get back in.

Then again, I may just be outsmarting myself here… time will tell….

More charts here: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3585763

Prosecution of fraud… cont.

May 23, 2010

In an earlier post, I wondered what might be the rationale for investigating and, eventually, prosecuting entities that, with government tacit consent and collusion, are clearly at the heart of the current crisis and have obviously not acted in the best interest of society at large. As I had no answers then, I still have no answers today. Except that today we know that no criminal charges will be brought against any AIG executives… ??? …

I would like to say this was a foregone conclusion for it is unrealistic to expect the chief enabler to investigate and prosecute its own gang. AIG now being a ward of the state, it is unrealistic to expect the state to indict itself.

So, is it all a dog-and-pony show? Is it just a way to throw the seething masses a bone? It certainly looks that way. Not that we are surprised of course but it is disconcerting nonetheless and I doubt it will serve to assuage the anger that is mounting at street level.

Here is another take from Naked Capitalism with more detail and more in depth information on indirect though equally suspect relationships as well as a good point I was not aware of concerning “secondary liability”.


The next World War

October 19, 2009






Keep that in mind.




Keep that in mind too.




















Where The Hell Is The Outrage?



My take is at the end.

Letting The Dice Roll








Geithner’s Appointment Book

The New York Times is taking A Look Inside Geithner’s Appointment Book







How Goldman Sachs Leveraged $70 Billion In Government Money






Max Keiser On Fraud



Part One

Part Two

The Goldman Tithe

Joe Peyronnin at The Huffington Post is writing Tithe Goldman Tithe








Goldman’s Public Relations Bind

The New York Times says Bonuses Put Goldman in Public Relations Bind






Another Goldman Executive Named To Key Government Post





Adam Storch COO of the SEC





Derivatives Bill’s Loophole May Exempt Most Firms






The Rich Have Stolen the Economy







Tenacious Goldman






















My Take


Let’s see how level the playing field was and still is.









The SEC Appointment




Derivatives Legislation


Influence Pedaling



Where’s The Outrage?

I don’t know about you, but I am outraged.










I am outraged at fees charged by banks receiving bailouts.







I am outraged there is not enough outrage over this.

Where the hell is the outrage?

Mike “Mish” Shedlock

A change in sentiment?

October 17, 2009

It would appear that the main stream media is in the process of becoming somewhat more critical of government action and may be willing to take a stand against what are flagrant and obvious illegal if not criminal practices.

Here is a clip by MSNBC’s Dylan Ratigan whom along with a number of other commentators I cannot recall ever questioning the actions of our “leaders” and monetary “authorities”.

I don’t know what is causing the change in sentiment in the main stream press and, for the time being, I reserve judgment.

The information provided in the video clip is factual if greatly watered down. I suspect the watering down is necessary to make it intelligible to the greatest number of people. For example, it is true Goldman Sachs have taken public money and have made a killing by acquiring assets at distressed prices at the height of the financial panic. What is not explained is how Goldman Sachs should know which assets to acquire. That, is a much more complex concept that relates to far more criminal behavior than taking public money and retaining all the profits. If you browse any of the blog sources you find on my blog such as Karl Denninger or the team at Zero Hedge or search for High Frequency Trading on my blog (HFT) you will realize that criminal behavior runs deep and involves government collusion. HFT is not the only illegal action undertaken by GS or the government. There are dozen of other instances of criminal collusion and contravention to the letter of the law. Things like the suspension of mark-to-market rules for example. How about taking over Fannie Mae and Freddy Mac two clearly private enterprises that have never been government sponsored entities? Or the riding roughshod over GM bondholders but unilaterally and arbitrarily sparing bank bondholders. How about the information black-out imposed by government on who got TARP money and how much?

The list of acts of fiduciary negligence and criminal activity is fairly long and was heralded by numerous red flags along the way.

However, what seems to escape most people is what might have caused this latest crisis. Indeed, is there one overarching action or decision or dynamic that can be highlighted and pointed at that would explain what is happening today?

If you’ve read any of my posts, I think there is.

In my opinion, this is nothing but the logical conclusion of the dynamic brought about by our monetary system. That is, what is happening today is nothing but the direct and logical consequence of the use of an unchecked fiat monetary system.

Incidentally, I wish everyone to realize that although we live in societies that are presumably steeped in economic and personal freedom, no government anywhere in the “free” West has ever asked ratification for their unilateral and arbitrary choice of monetary system.  Even worse, in our presumed economically free capitalist societies, government retains the power to set interest rates.

Once the government of a democratic society awards itself the right to impose the monetary system and manipulate interest rates, the one logical and inescapable outcome is the gradual erosion of the purchasing power of the unit of currency i.e. inflation.

Inflation is a dynamic that is both exponential in nature and, therefore, limited mathematically. Being exponential, inflation has a number of preordained and inevitable effects on society and the economy. One of the inescapable ramifications of inflation is that by artificially, pervasively and aggressively inducing inflation into a monetary system, government induces a rise in price level hence a rise in GDP. However, as GDP progression becomes ever more dependent on generating more inflation, the intrinsic wealth structure of society is progressively impaired. As the dynamic progresses, financial value runs away from intrinsic value at ever greater speed until the only way to induce more inflation requires ever greater degrees of government collusion in carrying out actions that eventually become criminal. This causes government to become an ever greater actor in the economy and eventually the existence of the political structure becomes dependent on generating ever more inflation.

But since expanding government can only subsist if it is financed by increasing tax revenue, then the generation of ever greater inflation becomes a goal unto itself.

The problem is that the logical conclusion of a fiat monetary system is known and inevitable. It has happened before. We know how it ends. Government intervention can at best stretch out the time line but cannot avoid the conclusion. In the process, government becomes a progressively larger actor in the economy. But as government is a non profit construct, its existence is predicated on increasing tax revenue thus progressively sapping the life blood of the economy.

The point at which the economy no longer generates enough revenue to service debt, that is the point at which financial value spurred on by leverage and gimmickry (i.e. hedonic adjustments, CPI manipulation, absurd leverage of 80 t0 1 )  is the most distant from intrinsic value. At that point, due to the yawning gap between what assets are worth on the market and the amount of debt that needs to be extinguished, returning to equilibrium causes social and economic devastation in the form of rising unemployment and a reduction of social services expenditure (road maintenance, mail delivery, social medicine, teacher salaries, civil servant salaries, food stamps… pensions… ).

Historically, similar junctures have resulted in world wars. We can only hope that this time will be different. But hope, as you know, is not a sound strategy.


(look for “Ratigan: Goldman Sachs magic trick”)