Goldman Sachs Shorts

Discussion in 'Trading' started by myminitrading, Sep 21, 2007.

  1. Facts:

    1. Goldman profit up because of shorting mortgage related securities

    2. (Massive) naked shorting in stocks like NFI, RAS during summer and then covering after major drop

    3. From money.cnn.com
    "One of the figures that didn't seem to make sense in Goldman's earnings was a number that estimates the market risk on a broker's balance sheet. This indicator, called Value at Risk, or VaR, moved up only 5% in the third quarter from the second. If Goldman was placing big bets in volatile markets - like the short trade in mortgages - VaR might be expected to move up by more.

    In other words, Goldman seems implausibly immune from the general rule in investing that higher returns almost always carry higher levels of risk. Van Praag responds that VaR didn't go up by much because Goldman reduced positions as volatility in the markets went up."

    Can we conclude:

    GS naked shorted securities like NFI/RAS, used media to influence true longs to sell their holdings, covered their shorts after securities dropped. And maintained low value at riek, VaR.


    How did they short these products when everyone was crying for a bid????????????????????????
     
  2. I checked with GS NSD (naked short division) and they said that re nfi/ras. In lieu of cash bonus this year everyone will get a copy of Sykes book and hung up. Go figure.
     
  3. empee

    empee

    nice analysis. Don't know if its true, but at least your thinking and doing your own DD!
     
  4. From GS messgae board.........................................................................................................................................................................................................


    Well guess who runs the the financial arm of the government; a big revolving door for GS execs. I'm not a big fan of conspiracies, but I find this shorting windfall from mortgage backed securities disturbing. Think about it, were the sub-prime delinquency rates really that high to trigger a total freeze-up of the debt markets out of the blue? Now we find GS had a huge short position going into this that they've made a fortune on. With the kind of financial leverage and insider clout they have is it beyond belief they have the capability of triggering or at least exacerbating a short-term panic like we had? After the pockets have been stuffed in trots Uncle Ben to put a lid on it. What a beautiful script and how convenient. Didn't he and Hank make a handsome couple today during the political dog-and-pony show? When Ron Paul asked about the dollar devaluation and its effect on Joe Sixpack Ben mumbled something about inflation being important, but mostly sat there like he just ate a big turd.
     
  5. Not sure if you're aware of it, but shorting aggressively usually removes bids out of the market.
     
  6. This is right to the point.

    GS has now profits on its ability to get major media (drive-by media as some would say) to scare the public to put pressure on govt to spend money to fix this "crisis".

    This can only happen because most people (democrats) feel the govt is there to protect us financially.

    We are becoming a illiterate dependent state and now GS has found a way to profit from it.

    Same way AARP, The unions, scare people to force govt bailouts..ie...universal healthcare, Soc. security...
     

  7. NSD LOL thats funny you have quite an active imagination
     
  8. It’s more interesting when you look at the past CEO’s from GS and what they do now. Who leaves a job that pays 50 million for a job that pays 200k? They have governors, senators, white house secretaries, and a guy running the NYSE.
     
  9. Guys that dont need the money anymore and want to get into public service
     
  10. I am not going to say you’re wrong but Dick Chaney left HAL and they received a lot of contracts from the Bush administration. I am not saying its planned but come on one former CEO is talking china’s ear off and the other runs the biggest exchange in the world instead of making 50 million a year.
     
    #10     Sep 21, 2007