Goldman, I call bullsh*t

[blazespinnaker]

"Blankfein said his firm has ``a pretty good grip'' on the valuation of its so-called Level 3 assets. Such assets, which include private-equity investments, leveraged loans and mortgage-related securities, trade so infrequently that companies use internal models to gauge their value. "

Maybe it's just me, but how can you just put an asset on your balance sheet and tell everyone to take your word for it how much it's worth?

I just don't believe it.. This shorting CDO's they're doing is all a smokescreen as well, I bet, to give people the impression that they are on top of things.

[GRG55]

Re: Goldman, I call bullsh*t

"Blankfein said his firm has ``a pretty good grip'' on the valuation of its so-called Level 3 assets. Such assets, which include private-equity investments, leveraged loans and mortgage-related securities, trade so infrequently that companies use internal models to gauge their value. "

Maybe it's just me, but how can you just put an asset on your balance sheet and tell everyone to take your word for it how much it's worth?

I just don't believe it.. This shorting CDO's they're doing is all a smokescreen as well, I bet, to give people the impression that they are on top of things.

The not so subtle underlying message I keep picking up from all the pronouncements by the banks and brokers is:

"Everything is fine. Stop looking at the balance sheet, we have it under control. Go back to watching the fees we collect inflate the income statement, and keep bidding up our stock price. Hey, I said stop looking at the balance sheet, dude*."

[*]"Need more convincing? Remember Hank's on our side, and Ben's agreed to look the other way..."

Given the relative stock performance, Goldman appears especially effective at selling that line...so far.

[c1ue]

Re: Goldman, I call bullsh*t

The example used by Fortune's editor on an MBS breakdown was in fact a Goldman created one.

The Goldman 13th 'X' tranche went to zero already.

From this anecdote I take away that Goldman has just as much, if not more exposure to poor performance in their level 3.

The fact that the CEO is saying everything is fine - as opposed to we've hedged our exposure as per our last quarterly earnings - seems like a big red flag to me.

[jk]

Re: Goldman, I call bullsh*t

goldman supposedly shorted a bunch of cdo's and/or abx indices to hedge their own cdo exposure. [why that should reassure the market about the state of the world escapes me. -"goldman's ok because they bet we're going to hell in a handbasket, so if goldman's ok then everything's ok" -]

[bart]

Re: Goldman, I call bullsh*t

GS is the second worst. Morgan Stanley is exposed even more, and Merrill Lynch is the 2nd "best".




Credit to http://www.geocities.com/arthurcutten/jesse.html for the work and chart.

[GRG55]

Re: Goldman, I call bullsh*t

goldman supposedly shorted a bunch of cdo's and/or abx indices to hedge their own cdo exposure. [why that should reassure the market about the state of the world escapes me. -"goldman's ok because they bet we're going to hell in a handbasket, so if goldman's ok then everything's ok" -]

Hedges eventually come off. The CDO is still there unless they sell it. IF GS eventually have to take a write-down I wouldn't want to be long much of anything in equities that day.

[blazespinnaker]

Re: Goldman, I call bullsh*t

I wonder if they'll be able to stretch it out ad infinitum though. Goldman is arguably the most connected bank in the entire world.

To be honest, I sometimes feel that Goldman is at the center of any real source of central bank conspiracies.

Look at their favored nation status in China, the amount of treasury secs that seem to spawn from their ranks, etc etc.

Still, this whole level 3 situation is beyond the pale. The ability to just say "oh this 50B .. well, just trust us, it's there" .. that's just madness.

[jk]

Re: Goldman, I call bullsh*t

goldman is everywhere:

"Two officials for Goldman Sachs, John Mallory and Gerry Cardinale, were pivotal in brokering the peace between [Alex] Rodriguez and the Steinbrenners, who were miffed at Rodriguez for opting out of his contract on Oct. 28."

[blazespinnaker]

Re: Goldman, I call bullsh*t

Good article on long arm of GS

http://dealbook.blogs.nytimes.com/20...goldman-sachs/

[metalman]

Re: Goldman, I call bullsh*t

Good article on long arm of GS

http://dealbook.blogs.nytimes.com/20...goldman-sachs/

here's another:

The United States of Goldman Sachs

June 20th, 2006

There is no shame. There is no bottom.

Just as the Bush Administration hands over the Treasury Department to Hank Paulson, investment banking colossus Chairman of Goldman Sachs, Robert Zoellick, the slithery Number 2 to Condoleeza Rice, will slide over to Goldman Sachs as Managing Director.

The New York Times is just tickled pink at this revolving door dosie-doe. I’m not.