What kind of deal was that again?
;D

Caution: Strong language

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

I couldn't post the Youtube window owing to the title!

Let me have your attention for a moment...  Let's talk about something important... (Know what it takes to sell real estatelink to tunes with lots of naughty words from Glen Garry Glen Ross?)

The thing about Goldman Sachs is that they, as principals in these trades - that is, as part of their function of being market makers - they, by definition are betting against their clients.  As embarassing as the emails from the show trials is, GS is actually more in the right than I thought they were. 

Where GS may have crossed the line is in failing to disclose that they were taking the other side of their clients' trades.  ("What you're hired for is to help us, not to...")

But GS wasn't acting as the house in Blackjack, it was more like acting as the house at a poker table - getting paid a flat fee for every round played.  If you want to buy somebody's debt at $0.20 on the dollar, and I've got a client who wants to sell that same debt at $0.10 on the dollar, I'll gladly buy it from him at $0.11 (he thinks he got 10% more than he deserved!) and sell it to you at $0.19 (you saved 5%!), and pocket the remaining $0.08 of spread for myself, risk-free.  I don't care if the bonds are *poop*, and neither do the people on either side of the trades.  (I'm just the middleman, and I'm betting against both of you, albeit temporarily.)

I enjoyed the other day's testimony, but it was purely an exercise in PR.  Drag out the usual suspects, rake 'em over the rhetorical coals, make sure every politician gets at least one good soundbite for the next campaign, and call it a day.  Most of the Congressdrones' questions were as poorly-formed as GS's answers.  Tales were told by idiots on both side, full of lulz and fury, signifying nothing.

I'm a piker and will never be able to afford GS's services, but having seen what happens when people listen to real estate agents, I'd rather deal with GS than a real estate agent any day.  At least the guys from GS know when they're screwing their clients over. 

This is crap.  I don't buy any of that.  We're dealing with a fascist plutonomy* here.

They stole the GOLD and we don't have the SACKS to take it back from them!
http://www.inthe00s.com/smile/07/nono.gif

*So say your Forbes friends:
http://www.investopedia.com/terms/p/plutonomy.asp

BTW, you ain't part of the plutonomy, and you never will be.  You might like them, but they see you as subhuman widget. 

He's right, it's a raw deal, and been going on for far damn too long...

>:(

Lots of issues at work here, including that the Goldman people are a bunch of rat bastards, as exemplified by the "Fabulous Fab ".

In addition to GS double-dealing, in my opinion the most incendiary part of the financial meltdown was the so-called derivative instrument called a "credit default swap".  Essentially these were legalized gambling in which somebody is selling tickets to a raffle, hoping that nobody's number gets drawn.  But when the "winning ticket" got pulled, the guys selling these instruments did not have the money to pay out.  This is what is called "naked trading".  Derivatived indeed have a valid risk-management role to play in finance, but NAKED derivative trading is simply gambling, nothing more or nothing less.

In my opinion naked derivative trading should be banned.  If you do not manufacture (or mine, etc) a given commodity, then you should no tbe allowed to sell "call options" or buy "put options" on the commodity.  This rule is easy to enforce; my Charles Schwab account in fact will not allow me to trade these sorts of derivatives NAKED.

Another little-mentioned contributor to the financial meltdown was trading in oil speculation.  When the price of oil started to tank in 2008, many naked speculators had to make good on oil speculation at extremely high prices, and in order to come up with the cash to cover their blunders, they had to start cashing in their stock holdings... which then caused the stock markets to tank more than they otherwise would have.

Regulators need to implement solid rules and prohibitions against people doing naked trading.  Naked trading is extremely destabilizing to the markets.

I completely agree.

Except I think "naked trading " should be legal, but only if you actually do it in the nude!

That way everybody can see your bare assets!

:-\\