Goldman Sachs Gives Tips on How to Profit from Weak Global Economy
- Posted on September 2, 2011 at 7:32pm by
Becket Adams
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Goldman Sachs Group has reportedly provided its hedge-fund clients with a pamphlet that instructs them on how to profit from the financial crisis in Europe.
According to a recent Wall Street Journal report:
“In a 54-page report sent to hundreds of Goldman’s institutional clients dated Aug. 16, Alan Brazil—a Goldman strategist who sits on the firm’s trading desk—argued that as much as $1 trillion in capital may be needed to shore up European banks.”
Moreover, the pamphlet claims that “small businesses in the U.S., a past driver of job production, are still languishing [emphasis added].”
According to Business Insider, Alan Brazil recommends a couple of strategies to help “play” the European disaster:
First: “Buy a six-month put option on the Euro versus the Swiss Franc, thus betting the Euro will drop against the Franc (the Franc being the currency that an official Goldman report recently referred to as the most overvalued in the world).”
Second: “Buy a five-year credit default swap on an index of European corporate debt—the iTraxx 9 [the brand name for the family of credit default swap index products that form a large sector of the overall credit derivative market and cover regions of Europe, Australia, Japan and non-Japan Asia]. This is a bet that some of these companies will default, and your insurance policy, the CDS, will pay off.”
Shrewd? Yes. Surprising? Not exactly.
Goldman Sachs has repeatedly demonstrated a quality of character that has been latitudinarian, to say the least, in regards to ethical business behavior. To put it plainly, they have a long and faithful record of fiscally perspicacious, albeit ethically questionable, business practices.
For instance, readers may remember the “California bonds” scandal where the Los Angeles Times reported that Goldman Sachs, which earned $25 million from underwriting California bonds, had advised other clients to short (i.e. shortsell) those bonds.
Then there was, and continues to be, the ever-present “personnel ‘revolving-door’ with U.S. government.” Back in 2008, when Goldman Sachs started receiving criticism in earnest, it became apparent that there was a “revolving door relationship” between Sachs and the Feds. Goldman Sachs employees and consultants would be moved out of the financial group and “somehow” end up in high-level U.S. Government positions. Naturally, many critics objected to this seemingly crony relationship because of the obvious conflict of interest.
These were no minor players who went on to become powerful and influential U.S. government officials. For example, former Treasury Secretary Paulson was a former CEO of Goldman Sachs. Former Goldman Sachs lobbyist Mark Patterson became chief of staff to Treasury Secretary Timothy Geithner (despite President Barack Obama’s campaign promise that he would limit the influence of lobbyists in his administration).
And strengthening the claim of a nefarious relationship between the two, the Washington Examiner pointed out back in February 2011, that Goldman Sachs was “the company from which Obama raised the most money in 2008” and that its “CEO Lloyd Blankfein has visited the White House 10 times.”
We could go on and mention the Goldman Sachs insider trading cases where, in 1986, Goldman employee David Brown was convicted of passing inside information to Ivan Boesky, the infamous Wall Street arbitrageur, on a takeover deal. Robert Freeman, who was a senior Partner, the Head of Risk Arbitrage and a protégé of Robert Rubin (a member of the Board and Co-Chairman from 1990-1992) was also convicted of insider trading, for his own account and for the firm’s account.
And let us not forget their involvement with Greece and European sovereign debt crisis. Goldman Sachs allegedly helped the Greek government mask the true facts concerning its national debt between the years 1998 and 2009. In September 2009, Goldman Sachs, among others, created a special credit default swap (CDS) index to cover of high risk of Greece’s national debt. As result of this collaboration, the interest-rates of Greek national bonds have soared to a very high level and has led the Greek economy very close to the brink of bankruptcy.
These are only a few examples in the long, illustrious history of Goldman Sachs. Knowing full well their common modus operandi, this recent cash-in-on-Europe pamphlet does not come as a surprise at all.
In fact, it is moderately tame compared to what they are capable of. Maybe they are turning a corner.
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TAXEVERYONE
Posted on September 7, 2011 at 11:30amThis corrupt company should have been allowed to fail!
Report Post »danboy524
Posted on September 5, 2011 at 11:02amThe average age of the world’s greatest civilizations from the beginning of history, has been about 200 years. During those 200 years, these nations always progressed through the following sequence:
From bondage to spiritual faith;
From spiritual faith to great courage;
From courage to liberty;
From liberty to abundance;
From abundance to complacency;
From complacency to apathy;
From apathy to dependence;
From dependence back into bondage.”
The Obituary follows:
USA Born 1776, Died 2012 ………can you say, eleeettisssssmmmm?
Report Post »MUDFLAPS
Posted on September 4, 2011 at 2:39pmYou are in bed with the pit viper there goldman sachs. Thats how you profit from the weak economy.
Report Post »LowTechBackup
Posted on September 4, 2011 at 5:33amwhile it’s clear there have been actions out of certain American corporations that are trash, here’s another item to consider. this is somewhat similar to the tactic of the left that blames American Oil companies as “big oil” (ignoring OPEC who owns way more oil). Sure, hold corporate America responsible for their actions. But, at the same time, consider the actions of their (and our) competition- Chinese, Russian, Japanese, German, Middle Eastern, and other banks, oil companies, and corporations that have built-in government sponsorship. Remember the impact of helping their and our competition- transfer of jobs, technology, and wealth to people outside the U.S. who don‘t operate under rules that require disclosure anywhere near the disclosure that’s required of corporate America in the USA. what a coincidence, there’s a common result- transfer of jobs, technology, and wealth to people outside the USA, where have we seen that in the past 2.5 years?
Report Post »americansfightingforcommonsense
Posted on September 3, 2011 at 9:39pmDon‘t forget that Goldman Sachs bout part of the CCX Chicago Climate Exchange which is now ICE International Climate Exchange and has Obama’s EPA pushing for Cap and Trade by executive order. You know this ties in with George Soros as well. Bunch of CROOKS. Not to mention BOA as well.
Report Post »americansfightingforcommonsense
Posted on September 3, 2011 at 9:46pm“bought” that is. Glenn went over this quite awhile back. I knew they were trouble. But, now it looks like they are working with Soros. These kinds of predators look for any and every way to take advantage of the working man. It’s called GREED.
Report Post »GTH
Posted on September 3, 2011 at 4:26pmSo what else is new. Banks have been screwing us since they took away our gold and gave us back useless paper.
Report Post »http://youtu.be/tGk5ioEXlIM
babylonvi
Posted on September 3, 2011 at 3:44pmGoldman Sachs appears to be(IMHO) one of the biggest, most corrupt robber barons of this, or any other age.
Report Post »behonest
Posted on September 3, 2011 at 10:04amsnowleapard you are getting hot “I can see it this way, with two words “George Soros” hre says it in Nov 2007 while laughing quote from Soro’s “I know exactly where the dollar will be next year” which would make it OCT 2008 His Oct surprise. It was a shame Mccain/Palin were moving ahead by Sept 15, 2008 THEY HAD TO BE STOPPED we have to make it about the economy stupid
Report Post »JRook
Posted on September 3, 2011 at 9:46amIf your follow their lead you misrepresent mortgage back securities to you clients as you bet against them, manipulate the oil and T bill markets and of course take bailout money indirectly through AIG. Nothing like the integrity and ethics of the pillars of Wall St.
Report Post »P-51D
Posted on September 3, 2011 at 8:22amI have a tip. There is this Great American that moved from NYC to Texas, and he told me to buy gold and silver years ago.
Report Post »JRook
Posted on September 3, 2011 at 9:44amThere were a lot of people saying to buy gold. He just happen to have one approach him to be a sponsor of his radio show. I think his advice was a commercial not insight.
Report Post »babylonvi
Posted on September 3, 2011 at 1:56pmBut it was certainly true and was beneficial to those who heeded the information. There WERE many urging the same thing. To profit from someone else’s good fortune is, I believe, morally superior than to profit from someone else’s misfortune.
Report Post »Bill Rowland
Posted on September 3, 2011 at 6:36amHave the got a deal for you!
Report Post »Invest in mortgages. the housing market is the most stable thing you can invest in,
Chuck Stein
Posted on September 4, 2011 at 2:02amLand! They aren’t making any more of it. What could possibly go wrong . . . go wrong . . . go wrong . . .
Report Post »jb.kibs
Posted on September 3, 2011 at 12:43amwhat trickery is this?
Report Post »Snowleopard {gallery of cat folks}
Posted on September 3, 2011 at 1:19amI can see it this way, with two words “George Soros.”
If the markets collapse in Switzerland or with the Euro, somehow he will make money. This smells of a massive setup on his part.
Report Post »Banned on the Blaze
Posted on September 2, 2011 at 10:22pmGoldman Sachs Gives Tips on How to Profit from Weak Global Economy –
Yes sue anyone who does agree with you, and take out massive loans and when you can’t pay your loans back scream they are being racist, and file for welfare, and SS, and not pay your taxes, and take your welfare checks to the casinos, HAVE I MISSED ANYTHING!
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