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Jesse Felder
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Jesse has been managing money for over 20 years. He began his professional career at Bear, Stearns & Co. and later co-founded a multi-billion-dollar hedge fund firm headquartered in Santa Monica, California. Today he works with a select group of clients at Felder & Company, LLC in Bend, Oregon... More
My company:
The Felder Report
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The Felder Report
My book:
FIRE Wall Street
  • The Goldman Case Is More Important Than You Think 1 comment
    Apr 30, 2010 3:35 PM | about stocks: GS
    I've been closely focused on the Goldman Sachs drama over the past couple of weeks. Most pundits and other in the financial industry have dismissed the SEC case as a minor bump in the road for the company. Goldman will settle, take its slap on the wrist and move on many assume.


    However, as more information comes out about the clear conflicts between the firm and some of its clients I see the story taking on greater significance. As I wrote in the last issue of "The Felder Report," the baby boom generation has now suffered the bursting of the internet and housing bubbles culminating in the worst financial crisis and recession since the Great Depression - all during their peak saving and investing years.


    In addition, the Bernie Madoff fraud didn't do much to appeal to investor trust during this economic debacle. Now add the fact that the most prestigious investment house in the world profited enormously during the crisis and, in many cases, directly from its own clients demise. In light of all this, I don't see how this generation doesn't become completely financially misanthropic.


    Should the baby boom generation decide they have had enough of risk assets and exposing their nest eggs to the seemingly pervasive problem of fraud on Wall Street of one kind or another we may see massive shift in the investing landscape. Risk assets such as stocks, real estate, commodities, etc. would suffer at he expense of increasing popularity of relative safe havens, i.e. treasuries, certificates of deposit and other cash alternatives.


    This is a potential trend that is extremely difficult to quantify but I believe bears careful monitoring as the Feds take Goldman and others to task via legislation and litigation.

    Disclosure: none
    Stocks: GS
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  • Charlie Anderson
    , contributor
    Comments (86) | Send Message
    I hadn't thought of that perspective, but I have a solution as to trying to quantify it. In this month's issue of Money magazine, there is an essay on the inflow of money into bonds by year. 2009 was by far the biggest year of bond buying over the last decade and a half. There's your proof. It has historically led to big problems for the markets when everyone dumps their money into bonds, then, missing the equity appreciation, dumps it into stocks only to buy at the top. This should be an interesting trend to watch.
    30 Apr 2010, 11:20 PM Reply Like
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