Thursday, May 17, 2012

Vampire Squid anyone?

If it were not so sad it would be funny; after the mortgage backed securitization fiasco in which GS played a leading role in mis-stating the facts for their clients -- like they had no role whichsoever on selecting the mortgage pool.

GS's muppets have been playing the games for years, they suspected that the bank was screwing them; now they know.  I had friends who work at GS (note the tense) I always though they have a certain moral fiber (and I don't mean it as a compliment), an ability to see the real world in a way that fits their own reality (thruthiness if you will).

The lastest, thanks to their (soon to be ex) grossly incompetent lawyer (and apparently not much of a human being) was to provide the world with the proof they they treat clients as muppets, unless of course they are favoured clients (read hedge funds).  Turns out that not only did GS actively promote naked shorting (which is in the same ballpark as insurance a house you don't own and then burning it down), but they told their favorit clients what were the big positions.

Turns out a specific company, not a favorite of mine, called Overstock was so popular in the shorting game that at one point more than 100% of the float was shorted (a mathematical impossibility), naked shorting is basically selling something you don't own -- obviously if you can short to infinity (without borrowing the stock so that it can be delivered) you can kill a stock price (you created artificial supply of the stock).

Don't get me wrong I really enjoy GS's "God work" in the financial markets, I really like when they were the main player in insuring that the US housing market would implode, I really enjoyed the way the screwed their clients on that one.  I really enjoyed the way that played the weasel game of Greek financing -- allowing a bankrupt country to hid additional borrowings.

I real enjoy this latest play with the naked short, they way the now admitted to removing expert witnesses by hiring them for "large sums of money" basically ensuring that the wheels stayed greased.

I wonder if congress is going to do anything about these activities -- my guess is that they will pull real hard on the SEC to do nothing, after all GS and its employees are massive contributors to the "democratic process".

One question to America's companies; why are you dealing with these guys -- you would not re-hire a plumber that screwed you over -- what are you waiting for here!  A sign?


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