Friday, March 20, 2009

Ahhh Goldman

I noticed that Goldman is going on the public relations offensive today in response to the issue of their part in the AIG bailout with a conference call. I have said this before and will say this again so there is no confusion;

this concensus best of breed, master of universe, I could care less if they're Warren Buffett's broker, central banker incubating ground is without question the most perfidious, deceitful, duplicitous, conniving, unscrupulous, piece of garbage on Wall St. They look down their nose at the boiler rooms only that it is not a boiler room they are looking down at it is a mirror.

It is only fitting that the scurrying inhabitants of its hallways find themselves inundated with margin calls on their personal holdings of Goldman stock. Maybe we should suspend mark to market on GS common and replace it with a more economic sensitive, more observation, input laden measure, hey, like a level 3 asset !!, rather than its overly oppressive, illogical, illiquid, and wrong headed daily closing price at 4pm New York time.

Don't think for a minute that the #2 man at Treasury, Geithner's chief of staff Mark Patterson, a former Goldman Sachs lobbyist, is not front and center on this issue for this very reason. No outrage on capitol hill at this debacle now is there? There cannot be as this would require pulling the covers back and admitting the patently obvious, so lets just focus on the $165 million bonus' at AIG. David Copperfied would blush at their slight of hand proficiency.

I believe that the deceit, thievery, and cess pool that our financial markets have become needs to be drained and the perpetrators punished. (apologies to Art Cashin as I have not changed my mind)

Before you say it, this is not schadenfreude on my part. What it is though is a very fine example of the concept of just desserts. The shame in all of this is that King Henry Paulson's appointment to Treasury forced him to divest his Goldman stake before taking office, or at least that is what I am under the impression he was required to do. Lets hope he circumvented rules, laws and basic fair and good business practice by circumvented laws that should in no way shape or form apply to a Goldman partner !! Yes dear readers just desserts.

Caught some of the CNBC interview today with former Fed Governor Randall Krozner. I am not going to pick on the venerable and articulate former governor who now inhabits the hallways of the Univ. of Chicago's Booth School of Business. His continued blind support of policies and operations that are bereft of any deep thought or consideration of unintended consequences absolutely boggles the mind. The choices are few. As Fed governor you ruin the finances of the country or as major business school official, you ruin the minds of the next generation of business leaders or should I call them zombots. Zombies and robots combined together to parrot the mantra of Keynesian, borrow short to fund long, leverage 40 times equity, circumvent laws and rules of standard mortgage contracts, to make quarterly numbers to fund those bonus's.


The furor by the intellectual lightweights that scurry through congress, the Fed, and Treasury is almost comical if not so tragic. It reminds me of how when channel surfing you would catch the local municipal or city hall session where a $25 million sewer infrastructure expansion would yield no questions from councillors or aldermen/women yet a 4-way stop sign proposal would get debated for 60 minutes. Too funny !

The point here is that water finds its own level, you know, lowest common denominator type stuff where you discuss and debate what you are capable of. $165 million in bonus money is mere slippage compared to the billions and trillions being tosses around like candy.

I realize my rant to day is foul and harsh but what does one do or say when the republic is crumbling beneath them. Stay quiet? Or worse mimic that purportedly Great America Larry Kudlow who daily and nightly propagandizes every lie out there telling people all is well, nothing to worry about when the storm of a generation is upon us? I would counter that one might call a great American one that has the courage to stand up and tell people the things they do not want to hear. Unfortunately there are very few of these types left and most certainly none inhabit the halls of congress (Ron Paul exempted), the Senate or the Fortune 500 board rooms.

I meant what I said a couple of days ago when I titled my post God Help us All.

Housekeeping notes;

I was stopped out of my APOL position this morning at $72.60 for a gain of just over 10pts on 1 unit long.

I am raising my stop on my long SDS position to basically break even at $80.36. Defensive yes must we must remember to never underestimate the hope and denial of a savaged long only investing public and pension community.

Good speculating to you all and never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 1 unit Ultrashort S&P500 ticker SDS @ $79.90 stop @ $80.36
Long 1 unit Ultashort 20yr Treasury ticker TBT @ $44.25 stop @ $42.17
Short 1 unit Microsoft ticker MSFT @ $19.20 stop @ $19.20

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