The Credit Crisis Financial Stocks Short Journal

SEC Examining Statements Given by General Electric
http://www.cnbc.com/id/36596515

They lied about their troubles in the commercial paper market, in public they said they were just 'testing the Fed facility to see whats up' or something to that effect, meanwhile Paulson said in his book that they were having problems raising funding there(that info came from phone calls made by the CEO). This makes me think that the post-LEH SEC is serious, they want to look like they are getting the job done, which is why I believe PPD is screwed
 
MBI on fire, looks like the market expects that they could win some lawsuits. GS traders now have a vehicle to hedge their fraud. I almost shorted it yesterday, now I will just wait and see
 
Good news

"1645 GMT [Dow Jones] Libor/OIS and the TED spread, two gauges of risk in fincl mkts, are basically unchanged after the Goldman news Friday. Looking at Libor/OIS, the June contract widened by just 1/4bp, said Carl Lantz of Credit Suisse. 3 month Libor/OIS is the spread of 3-month Libor to the expected fed funds rate. "In general it's a very muted reaction relative to CDs spreads and bank stocks," he said. Fundamentally, "the banks are a lot healthier," and it's not obvious the same developments that generate an equity sell-off these days will generate any type of funding issue, he said, as happened during the height of the credit crisis. The TED spread, LIBOR rates versus Treasury bill rates, was unchanged at 15bps, said Lantz. (deborah.blumberg@dowjones.com)"
 
Quote from Daal:

Resembles Jeff Skilling resigning from Enron before the collapse. Looks like the SEC is on the case, these guys are finished IMO, its only a matter of time, could be 1 month or 5 years
More...

Nice call, looks like a long-term short/put position is in order.
 
I bet almost no one could think that a vulcan eruption in Iceland could lead to an increase in greek CDS. If this were more serious this could lead to a Taleb style fat tail that virtually no one would be insured against(like the Casino from the Black Swan book, that was uninsured against the tiger attacking Siegfried & Roy and tax problems). Virtually everyone right now is uninsured against some hidden risks that we will never know until is too late, thats a scary thought!
 
I dont understand some of the Paulson grilling. So he went to GS and worked with them to produce a product that suited his needs for his financial gain. How is that different from Jim Rogers going to Merrill to produce a futures contract that would move according to his index?Yes the people using his product would lose money instead of making like Jim's but 'people might lose money' is hardly a reason to say his behavior was wrong, we are talking about financial markets where everyday people lose money

Furthermore the investors in the other side were supposed to know that there is no such thing as free lunch and investing involved risks. Whether his involvement needed to be disclosed is a GS issue and its not his responsibility, Paulson has NO obligation in knowing securities laws to the extent that GS needs(he was an user and not an issuer). Now if Paulson knew that the only way he could get product done was by a violation of securities laws there might be a case for punishment but there is simply no evidence at this point despite of what the witch burners might say
 
You must log in or register to reply here.
Back
Top