Eleven indicted Somali pirates dropped a bombshell in a U.S. court today, revealing that their entire piracy operation is a subsidiary of banking giant Goldman Sachs. There was an audible gasp in the courtroom when the leader of the pirates announced, “We are doing God’s work.  We work for Lloyd Blankfein.” The pirate, who said he earned a bonus of $48 million in Dubloons last year, elaborated on the nature of the Somalis’ work for Goldman, explaining that the pirates forcibly attacked ships that Goldman had already shorted. “We were functioning as investment bankers, only every day was casual Friday,” the pirate said. The pirate acknowledged that they merged their operations … [Read more...]

I've never seen a stock supported like this. On a day when the broader markets are getting hammered and Goldman's execs are getting grilled, Goldman Sachs stock is up strong.  While you could say that the market is showing confidence in the firm, I think there's a different answer and, frankly, one that's a whole lot more logical. Odds are very good that Goldman has simply peeled off a billion dollars - or some other amount - to support its own stock and send a message to hedge fund traders who want to short the firm - "don't f*&^ with us." If I were in their shoes, I'd tell my traders to do the same thing...and why not?! Everything the firm holds near and dear to its heart is at stake. … [Read more...]

Unable to bring the appropriate amount of pressure to bear unilaterally against China and its Yuan on behalf of the United States, Turbo Tim is at it again. Now he's seeking help from the G-20 in an effort to make the Yuan an international issue. The allegation is the same old tired rhetoric - the yuan is undervalued and therefore somehow trashing the global recovery. So what if it is? The fact that shipments have grown faster from China than to China indicate that the world has gladly purchased what China has to offer - inexpensive goods. This does not indicate differences in exchange rate management as some seem to think. Take a look at the free markets Tim...Yuan forwards are already … [Read more...]

There's two things Goldman doesn't want: 1) a long protracted legal battle and 2) the discovery process that precedes it. The first will clearly be expensive and detract from the bottom line while the second will turn lights on in corners of the firm that it would just as soon not have exposed. Either way, if the case goes forward, Goldman risks more damage to its reputation not to mention giving an angry public grist for the mill including, presumably grounds for private lawsuits, additional regulatory actions and further media limelight. This case highlights everything that is wrong with Wall Street today...clients never know if they are the ones trading with the firm or the ones the … [Read more...]

Way back when the curent financial crisis started, I observed that a relatively small number of people made a pile of money "fraudulently if not illegally" and that there would be hell to pay when the regulators and lawyers got their act together. It's too early to tell how this will go down but this lawsuit  is far more important than people realize for two reasons: 1) it names specific officers (in this case - Goldman VP  Fabrice Tourre); and 2) penalties are merely balance sheet entries but start talking jail time and you're going to get Wall Street's attention. Stay tuned. … [Read more...]

[Shanghai, People's Republic of China] - The global financial crisis that have devastated the west has proven to be little more than a speed bump exactly as I predicted it would be way back in 2007 when the brown stuff hit the fan here. It's too bad that western governments can't seem to understand how to better work with the Dragon because, chances are, they'd be a whole lot better off for doing so instead of constantly complaining about sour grapes. Not surprisingly, the bulk of the figure comes from industrial growth -- 22 percent for heavy industry and 14 percent for light industry -- and a nearly 18 percent expansion in consumer retail sales. At the same time, the nation's voracious … [Read more...]