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Exactly. If a crime is committed, I don't see how party lines should blur judgment. Black and white. Sounds like a weak case. What this boils down to is populism against GS, and monopoly-envy.

Within 2-3 days Goldman shares will be near 185 again and this will have blown over. Rumors will be out there that Goldman themselves prompted the SEC to release the news on Friday so they could issue employee stock options on Monday at a lower strike price.

That is not an uncommon rate territory for pawn broker / jewelry shops for short term loans that lend on gold and jewelry as collateral.

How come I'm never long the right options into opex.... I mean *NEVER* Just give me one payoff like today...

Hilarious. Had to be on options expiration day, didn't it... If they only waited til Monday to release this. http://bit.ly/ay2bjB I think options MM in a ton of equities are getting wiped today. Everywhere you look you have many X stdev moves....

Tell me about it. You'd think in a market that can justify a $650 BIDU, a 22 next 4 quarter multiple wouldn't be a stretch. Well I have a while to sit in this trade. Too bad the butterfly didn't work.

Bought an Apr 610/620/630 call butterfly for 1.25. And a May +600/-610 call vertical spread for 4.20. Will sit in the May spread for a few weeks if necessary, and the Apr is a lotto ticket. Obviously I think the stock is going to 620, but if I'm not immediately correct, have a little time...

Sometimes simple just works. That means sell and get flat.

This turned into a hotel living thread. I'll provide alternative reply. With 1.2M a year of bond income, (so you need a net worth of about 20m to get to this point on a risk free basis) I'd probably enter into liabilities to match - the logic being if the US govt defaults on its debt...

One can only assume the Fed's mandate of price stability is there for good reason. Severe moves in either direction definitely make a tougher business and employment environment. Whether it is a futile policy to pursue is perhaps more philosophical in nature. But regardless of that fact, the...

yes. To keep prices stable though, the Fed will have to double or even triple the monetary base from here if they were to move to such a model.

On balance I understood and agree with most of your other statements. Very good post.. your restatement makes sense. my understanding of 1.5T of "money printing" had entirely to do with the increase in the Fed balance sheet, independent of how much of that went to treasury or TARP, etc...

This is incorrect. As loan assets are paid off, aggregate deposits decrease and reserve requirements fall. Attached is a simple spreadsheet showing the movement of funds in various scenarios. Simplified, if I hold a deposit of 10K at Bank A and pay off a loan with that 10K that is held as...

I haven't looked at the stock in a while, but from what I remember those dividends are a product of financial leverage. What are long run (5 yr) estimates ? There is a bit of risk there to generate those cashflows.

Looks like the yen and the bond are intimately tied and there was a buildup of leverage here... What's the position ?? 30 year swaps + usdjpy to hedge ?? Someone remind me of how that works.

Hard not to notice. Most major instruments are just dead.... Treasuries, equities, gold, crude, etc. etc. etc. Strange. Will it last forever? I doubt it.

Take a look at: http://www.newyorkfed.org/research/staff_reports/sr380.pdf Explains exactly how the system works, and that excess reserves are only reduced by either required reserves rising, or of course the Fed actually reducing the monetary base and selling assets.

Those #s are consistent. M2 up 40B non seasonally adjusted m/m. Perhaps though this is a seasonal effect, as money demand increased during the holidays and is now rebounding after spiking down. More cash, more velocity coming back. M1 up 12B non seasonally adjusted m/m. If this is a trend...

Required reserves rises as the deposit base rises. Required reserve + excess reserves = total reserves. The Fed policy (of printing money) increased total reserves, but did not change required reserves. Required reserves are a function of the composition of the deposit base. I have no...

http://www.federalreserve.gov/releases/h3/current/h3.htm Take a look at this. Required reserves just increased this past two weeks 5.2% !! Remember, as all of this new based money is circulating through the banking system, reserves are not 'removed' from the system. They are merely moved...