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  • Goldman Sachs shorts its own stock, tanks market, makes billions off SEC fraud charge news

    Goldman Sachs shorts its own stock, tanks market, makes billions off SEC fraud charge news

    SAN FRANCISCO (MarketWatch) -- The Securities and Exchange Commission on Friday charged Goldman Sachs & Co. (GS 161.00, -23.27, -12.62%) and one of its vice presidents for defrauding investors by misstating and omitting key facts about a financial product related to subprime mortgages. The SEC alleges that Goldman Sachs structured and marketed a collateralized debt obligation that hinged on the performance of subprime residential mortgage-backed securities. However, it failed to disclose the role that a major hedge fund, Paulson & Co., played in the portfolio selection process as well as the fact that the hedge fund had taken a short position against the CDO. "Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party," said Robert Khuzami, director of the division of enforcement, in a statement.


    AntiSpin: Okay, so we made up the part about Goldman shorting its own stock today, but we wouldn’t put it past them. The SEC filed a complaint against Goldman for in effect shorting its own clients by selling subprime mortgages to one set of clients while at the same time selling shorts on subprime mortgage CDOs through another client.

    Will the case make it all the way up to Hank Paulson? He ran the investment bank at the time the alleged fraud occurred, before leaving to run the Treasury Department a year before the collapse that subprime mortgages made.

    The iTulip wayback machine recorded the following warning from Henry Paulson in December 2006:
    Economic storm brewing in America
    December 6, 2006 (Ambrose Evans-Pritchard - Telegraph UK)

    The world economy is what matters, and I don't like the smell of it. Nor, apparently, does Hank Paulson, who made $700 million at Goldman Sachs before taking over the US Treasury this year. He has reactivated a crisis team with a command centre in Washington to cope with the "systemic risk" in a market melt-down. His worry? 8,000 unregulated hedge funds with $1.3 trillion at hand, and derivative contracts now worth $370 trillion. "We need to be very careful here," he said.

    A well-sourced article in Washington's Weekly Standard says Mr Paulson fears a "serious crisis that would be a body-blow to the US economy".

    The story neglects to mention that when Hank left Goldman for the Treasury he was "forced" by law to divest himself of his Goldman holdings and put the $700 million proceeds tax free into a trust. Maybe Hank saw something coming? Ya think?

    iTulip.com manipulates gold market, calls intraday trade to the minute

    This morning we posted a prediction on today's gold price. Gold had fallen from $1155 at the open in New York to $1147 before recovering to $1154 then falling to $1150 at the time our intraday call was posted at 11:11AM ET. Gold then plummeted to $1130 by noon before recovering to $1136 at the close in New York.

    What was our call? That the gold price would fall until noon, then spike back up.

    Here are two screen captures from the postings here (in our subscriber area) at 11:11AM today proclaiming "Gold and silver to spike at 12PM ET" and later after the close at 4:03PM ET.


    Screenshot of the gold price call at 11:11AM





    Screenshot of the gold price call at 4:03PM

    How did we do it? Wouldn't you like to know!

    Take that gold price suppression cabal!

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    Last edited by FRED; 04-16-10, 11:02 PM.
    Ed.

  • #2
    Re: Goldman Sachs shorts its own stock, tanks market, makes billions off SEC fraud charge news

    I'd like to know.

    Comment


    • #3
      Re: Goldman Sachs shorts its own stock, tanks market, makes billions off SEC fraud charge news

      Originally posted by Chomsky View Post
      I'd like to know.
      X2, Question is how much money did you guys make FRED?

      (You know by shorting until just before noon and then covering before the afternoon climb).

      P.S. I know you are baiting us again FRED, (remember the Keynes discussion?) But do spill the beans and reveal your point.

      Comment


      • #4
        Re: Goldman Sachs shorts its own stock, tanks market, makes billions off SEC fraud charge news

        Ahhh I thought only cheesy citcoms still used cliff-hangers ...

        Comment


        • #5
          Re: Goldman Sachs shorts its own stock, tanks market, makes billions off SEC fraud charge news

          Ahmmm - Some still do it better and bigger

          Question ? who knew, when did they know and what did they do with the information. Its corrupt to the core

          http://www.bloomberg.com/apps/news?p...mHoGJh5s&pos=3

          Comment


          • #6
            Re: Goldman Sachs shorts its own stock, tanks market, makes billions off SEC fraud charge news

            More proof regulation is bad and markets are both rational and self-regulating I guess.

            Said it before... Don't want a Consumer Protection Agency Wall Street Libertarian types? Stop screwing people.

            Comment


            • #7
              Re: Goldman Sachs shorts its own stock, tanks market, makes billions off SEC fraud charge news

              1032 looks like short term support, when these areas get hit you tend to get minor "spikes". How you managed to get the timing down is another story I'm assuming you saw the GS story before 11, then predicted at 11:11AM and expected it to hit during the day? This is assuming you are an experienced news trader eh? Or you were reading order flow?

              I've seen some weird order flow the past wednesday and thursday on yen crosses, closed my longs on wednesday.

              Comment


              • #8
                Re: Goldman Sachs shorts its own stock, tanks market, makes billions off SEC fraud charge news

                Originally posted by Chomsky View Post
                I'd like to know.
                We will not explain how it works because if we do everyone will use it and it will stop working. Instead, we will explain how it works it after it stops working, as it will eventually because others will figure it out. But first we have to prove that it works now by making similar predictions three times in a row. Not three days in a row but three times. It doesn't work every day.
                Ed.

                Comment


                • #9
                  Re: Goldman Sachs shorts its own stock, tanks market, makes billions off SEC fraud charge news

                  Somehow I nearly missed that news

                  Goldman-Backed Whitehall Said to Lose 98 Percent


                  Whitehall Street International, the real estate investment fund that counts Goldman Sachs as its largest investor, has seen almost all of its $1.8 billion of equity go up in smoke, The Financial Times reported.
                  Apparently, the fund’s leveraged property bets across the globe went south.
                  The newspaper has this:
                  By the end of 2009, the fund was down to its last $30 million, a paper loss of about 98 cents on the dollar, an annual report sent to investors last month said. The report said that Goldman was Whitehall’s largest investor, with a commitment of $436 million. Last year, Goldman took a loss of $1.76 billon from all its real estate principal investments.
                  Goldman isn’t just a shareholder in Whitehall’s portfolio of casinos, hotels and offices; the bank was also adviser and lender to the fund.


                  http://dealbook.blogs.nytimes.com/20...ent/?src=busln

                  Comment


                  • #10
                    Re: Goldman Sachs shorts its own stock, tanks market, makes billions off SEC fraud charge news

                    The sell off in gold/silver yesterday does appear to be consistent with Andrew Mcguire's accusation that a significant sell off occurs at each options expiration. Yesterday's selloff being on the 3rd Friday of the month certainly does add a bit more credibility in my opinion.

                    Comment


                    • #11
                      Re: Goldman Sachs shorts its own stock, tanks market, makes billions off SEC fraud charge news

                      Originally posted by FRED View Post
                      We will not explain how it works because if we do everyone will use it and it will stop working. Instead, we will explain how it works it after it stops working, as it will eventually because others will figure it out. But first we have to prove that it works now by making similar predictions three times in a row. Not three days in a row but three times. It doesn't work every day.

                      It would be nice to have a timely email sent to members so they would have a chance to act on your calls if so desired.

                      Comment


                      • #12
                        Re: Goldman Sachs shorts its own stock, tanks market, makes billions off SEC fraud charge news

                        Originally posted by magicvent View Post
                        It would be nice to have a timely email sent to members so they would have a chance to act on your calls if so desired.
                        or post it to the same thread... i've already subscribed to it by email.

                        Comment


                        • #13
                          Re: Goldman Sachs shorts its own stock, tanks market, makes billions off SEC fraud charge news

                          Originally posted by metalman View Post
                          or post it to the same thread... i've already subscribed to it by email.
                          Is it this thread or another thread (please post). I've been away for a few days and appear to be lost.

                          Comment


                          • #14
                            Re: Goldman Sachs shorts its own stock, tanks market, makes billions off SEC fraud charge news

                            Originally posted by magicvent View Post
                            Is it this thread or another thread (please post). I've been away for a few days and appear to be lost.
                            In FRED's post it reads:

                            Here are two screen captures from the postings here (in our subscriber area) at 11:11AM today proclaiming "Gold and silver to spike at 12PM ET" and later after the close at 4:03PM ET.
                            I cannot read the here but that is where the there is. :cool:

                            Comment


                            • #15
                              Re: Goldman Sachs shorts its own stock, tanks market, makes billions off SEC fraud charge news

                              Originally posted by FRED View Post
                              Goldman Sachs shorts its own stock, tanks market, makes billions off SEC fraud charge news
                              [B]
                              Somebody made some money on that day, like a 47,166% return in 24 hours. Not bad! (And yes FRED, I understand that you did not seriously make the accusation that is listed in the headline)

                              http://www.businessweek.com/news/201...ec-charge.html

                              By Jeff Kearns
                              April 16 (Bloomberg) -- For bearish options traders, the Securities and Exchange Commission couldn’t have picked a better day to charge Goldman Sachs Group Inc. with fraud.
                              Puts giving the right to sell Goldman shares at $175 before today’s close, which were worth 3 cents yesterday, soared to $14.15 for the biggest gain among options on the stock. Goldman shares fell 13 percent to $160.70 in New York.
                              “Everything moves in an exponential manner on expiration day when you have unexpected news like this,” said Steve Quirk, managing director of trading at TD Ameritrade Holding Corp. in Chicago. “This is a very good example of why you cover short options even if they’re worthless and 10 or 20 percent away from the current trading price near expiration.”
                              Goldman Sachs plunged the most in almost three months after the U.S. Securities and Exchange Commission sued the New York- based firm for fraud tied to collateralized debt obligations that contributed to the worst financial crisis since the Great Depression.
                              The April $165 puts jumped to $4 from 1 cent yesterday. Those contracts traded more than 29,000 times, almost double the number of outstanding options before today.

                              Comment

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