As we all know by now, the SEC is investigating Goldman.\u00c2\u00a0 Some call it a witch hunt to make the SEC look better.\u00c2\u00a0 Some take the opposite side where they are calling Goldman the devil.\u00c2\u00a0 Well I have to agree that they make a ton of money day after day, month after month, quarter after quarter.\u00c2\u00a0 Is it just luck that they can trade these positions with such expertise.\u00c2\u00a0 If we had tomorrow’s newspaper, I know we could make some money too.\u00c2\u00a0 The SEC has opened a can of worms with this investigation.\u00c2\u00a0 Unfortunately, the SEC will will probably fall short of proving anything of value.\u00c2\u00a0 Goldman is operating in the world the we have allowed them to create.\u00c2\u00a0 They are both advisor and counter party.\u00c2\u00a0 This has to be the deadliest combination there is.\u00c2\u00a0 For the most part the people asking for Goldmans advice are either incredibly wealthy or institutional investors.\u00c2\u00a0 Either way it is hard to feel sorry for them since they should know who you are getting in bed with.<\/p>\n
I am sure as Goldman is getting more press, more stories about how they screwed one of their clients out of money will come out.\u00c2\u00a0 For the most part though, they did it legally.\u00c2\u00a0 They were allowed to be the counter party.\u00c2\u00a0 If you know that Goldman is willing to be the counter party, wouldn’t you think twice about doing the trade.\u00c2\u00a0 Sure they can hedge off their risk, but some of the contracts they lock their clients into are so complex that the client did not have a clue on how they worked.\u00c2\u00a0 They just agreed because it did what Goldman said it would do.\u00c2\u00a0 Take Ashanti Gold for example.\u00c2\u00a0 Ghanaweb.com posted an article on how Goldman was both advisor and counterparty and who do you think got hurt in the deal? You can read the article here.<\/a><\/p>\n Goldman is not the only company that does this.\u00c2\u00a0 This is a product of what we have let happen.\u00c2\u00a0 There is the reason we had the Glass-Steagall Act and we are now trying to reform the financial industry.\u00c2\u00a0 We will see which lobbyist have the most money.\u00c2\u00a0 My bet would be on the banks.\u00c2\u00a0 They make more money without the wall between their commercial and investment banks.\u00c2\u00a0 This is just plain and simple.\u00c2\u00a0 When the two can communicate they work better to screw clients out of money. We wish the SEC some luck for their case, but most likely will only result in a slap on the wrist in an attempt to save face.\u00c2\u00a0 Goldman’s CEO was at the White House 4 times while the SEC was preparing their investigation.\u00c2\u00a0 That is just coincidence\u00c2\u00a0 though.<\/p>\n Every institution should know their counter party risk… who they lose money to and why.<\/p>\n For those of you who are jumping into a shark tank, don’t be surprised when you get bit!<\/p>\n","protected":false},"excerpt":{"rendered":" As we all know by now, the SEC is investigating Goldman.\u00c2\u00a0 Some call it a witch hunt to make the SEC look better.\u00c2\u00a0 Some take the opposite side where they are calling Goldman the devil.\u00c2\u00a0 Well I have to agree that they make a ton of money day after day, month after month, quarter after […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[],"class_list":["post-27","post","type-post","status-publish","format-standard","hentry","category-commentary"],"jetpack_featured_media_url":"","_links":{"self":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/posts\/27","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=27"}],"version-history":[{"count":0,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=\/wp\/v2\/posts\/27\/revisions"}],"wp:attachment":[{"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=27"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=27"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.cheapiv.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=27"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}