Saturday, March 24, 2012

Goldman Sachs: Does Doing God’s Work Seal Its Future Fate?’

What do Jon Corzine, Hank Paulson and Lloyd Blankfein have in common?  None of the three had the financial business competence to fight their way out of a paper bag even if they were armed with a Ginsu knife.  And, all three nearly ran Goldman Sachs into the ground with that massive incompetence.  Corzine then went on to be a failed politician and ultimately caused the collapse of MF Global with his personal incompetence.  Paulson went on to head the Treasury after leveraging Goldman to the hilt.  As Treasury Secretary he presided over most expensive Wall Street collapse in our history.  A collapse he helped create as head of Goldman.  According to a Nomi Prins link we put up last December, without another covert Federal Reserve bailout of bad bets, Blankfein might have finally succeeded in taking the company under.   Today the firm remains massively and incompetently leveraged to systemic risk with 537 times as many derivatives as assets.  That’s just one of many measures of Goldman’s leverage to systemic risk.  (Thank you President Obama, Timmy Geithner, Congress, the CFTC, the SEC and the Federal Reserve for doing your jobs.)

Goldman’s core competency is rigging the financial game in their favor by getting former employees into political appointments, hiring former government officials and lobbying to have the economic rules bent in their favor to essentially guarantee their success.  They have proven time and again to not be competent at economics,  finance, managing risk or client satisfaction.  

The aura of Goldman Sachs’ brilliance is all propaganda.  A con.  That massive incompetence is now in the open for all to see.  We saw how absolutely feeble-minded. bumbling  and incompetent their executives were in their Congressional testimony that matches their endless incompetence in the market. 

If I was allowed to use 537x leverage, was given free taxpayer money through the Federal Reserve, was bailed out for all of my mistakes and most importantly knew the secret rules to the game in advance because I paid to set them and no one else had that advantage, I could easily be as invincible as Goldman is perceived.  And so could you.

Goldman’s systemic incompetence is sealing its own fate.  Yes that incompetence is shared with JP Morgan, Morgan Stanley, Bank of America and other members of the financial racket but Goldman has a unique business model that exposes them substantially to risk far and above those other firms.  Remember, we have been saying for quite a few years now that Goldman does not have a sustainable business model and could very well go under before this cycle ends.  At the time we first posited this statement, such a notion was preposterous.  It still is for many.  You’ll gain a greater appreciation for this in a few upcoming April posts.  But it is amazing how just a few years ago they were considered invincible.  The smartest guys in the room.   Yes, both firms’ executives were the smartest guys in the room because they both rigged the game.

Let’s look at the headlines in the news today regarding Goldman Sachs.  They all tell a very disturbing story that lends support to my position.   Goldman Sachs is a firm in crisis and there is no light at the end of the tunnel.  To the contrary, the grim reaper, the return of global volatility, is hiding just around the corner.

Goldman Sachs tells clients that this is the best time to buy stocks in a generation.

Goldman Sachs states that stocks to begin a steady upward trajectory.

Goldman Sachs tells clients we prefer stocks to bonds.  (What did I just say a handful of days ago?  Just a few days later Goldman makes an announcement confirming what we discussed.  Money is rotating out of sovereign bonds and into stocks.  The supposed bond king, Gross, is again wrong about why bond rates were moving.) 

Barclays joins Goldman in shunning bonds.  (The financial herd is moving into the perceived safety of stocks.)

Goldman in trouble again.

Goldman Sachs and JP Morgan employees are top Obama donors.

Bernie Sanders and other senators send letter to Top Commodity Trading Regulator and former Goldman Sachs executive to obey and enforce the law and stop oil speculators.

The opposite of Goldman Sachs is Silicon Valley?

Goldman Sachs laying off more employees.

High frequency trading distorts commodities.

Captured SEC regulator sides with Goldman Sachs over God.

Former Goldman employees form union in Japan.

Goldman Sachs loses bid to end risky debt sale lawsuit.

Goldman Sachs’ crackdown on using the term Muppets to describe its clients

posted by TimingLogic at 5:20 PM

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