Crammers is nothing more than a modern age snake oil salesman peddling his advice for the highest bidders to the infomercial (cnbc) crowd.
SEC charges GS with fraud
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Well, you make a good point. Very likely without someone shorting the living daylights out of these things, the charade may have gone on longer. But you are still not focusing on the two tenets of what I am trying to convey:
a) The reason we have faces is so that if someone does us harm, we know to avoid that person in the future.
b) It is one thing to profit from by being shrewd and taking the other side of a trade that is odds on. Where this starts to get gross is when the other side involve millions of people whose lives stand to be ruined. Further, when you do make this profit, you then rub the people you help destroy faces in it, all the while gloating and giving yourself big bonuses. All fine, that is the way you want to live your life that is your business. But when you then need my help, in the form of tax payer money to be bailed out, oh man, the fury this instills in most people.
GS, MS, C, WFC, MER/BAC, etc etc etc, for a very long time, you better be as straight arrow, for if you even once do anything remotely shady, there are millions of people who will go to their graves never forgetting what they have been through.
I don't know whether GS is guilty or not. But its reputation has been damaged, perhaps for a very long time. Can they restore it? Of course they can.
Oh, really? So you wouldn't be seen wearing a t-shirt saying I SHORTED YOUR HOUSE? I would just say that if you think you are a big man to do that, come down to the south side of Chicago or the Bronx, and wear that t-shirt while walking down the street.
Two quick points, to my knowledge Paulson and Co and other CDS buyers did not need any taxpayer funded bailouts. 2nd shorting a stock also will make you profit 'when the other side involve people whose life stand to be ruined'. I'm sure there was plenty of honest, hard working people in Enron who got laidoff or shareholders who believed their BS but that didnt made it wrong to short it
Well again, you make a good point.
In the cases of shorting a stock you are temporarily hurting many people, in some cases tens of thousands of shareholders that together hold that stock. Still, it is very likely a very small portion of their livelihood. In the case of ENE, or say more recently LEH and BSC, that is on a much grander scale since tens of thousands of people lost their jobs, many of them middle aged with no other skills.
I will point out that I too am disgusted by utilitarian views on things. If five people are to die, unless you sacrifice this one person to save the other four, what do you do?
In the case of this crisis, millions of people have been affected tragically. Are you suggesting that I am being utilitarian in my assessment simply by citing numbers of people hurt horribly? Am I insensitive to the people who get hurt because we short their stocks even though their log-wealth is trivial by comparison to what they experienced in this subprime crisis? Perhaps, but I can only tell you that I am more horrified by "The Holocaust" or "911" than by other small skirmishes that lead to people dying. That is probably a natural state of being human.
But it is more than just numbers. Perhaps the lesson is that we should not gamble with money we cannot afford to lose. The high road is for traders not to take the other side of a person gambling on their house, or a casino to ask a person that has been dropping huge sums of money to stop and come back another day, or a bar to ask client that has had too many to go home and call her a taxi. In all these situations the business is hurting itself by not executing it's business, but it is doing the right thing in the long term for the sake of its community and integrity, imo.
I've heard that from a few people - but where I get confused is with the term "systemic risk" in relation to that. Systemic risk means the big financial companies are interconnected, so one goes belly-up, the counterparties they owe are screwed.
So even if GS didn't need a direct infusion of $, if their counterparties all went belly-up, wouldn't they be hosed?
Bailing out the companies who then pass through the money to GS (like AIG) seems like an indirect bailout, but a bailout nonetheless. It still required gov't intervention.
So unless GS would have been fine if no one got bailed-out, then I'm not sure how they weren't bailed-out along with everybody else, "systemically".
