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William Henderson
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I am a fulltime intraday technical analysis trader, I hold no positions overnight, and I don't really focus on fundementals. I am primarily fixated on price action and patterns. I am also the author of the http://williamtellstradecraft.blogspot.com blog (please visit) focused on tradecraft and... More
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  • Goldman Loses + Paulson Loses = Wall Street Losses  1 comment
    Apr 18, 2010 8:35 PM

    1. Goldman is going to suffer enormous reputational capital loss which is going to hinder their ability to make money for themselves and others.  Their argument is either we are idiots' or criminals neither defense is helpful in client retention.  It doesn't help that they knew of pending charges and insiders continued to sell as likely their employees continued to buy, a la Enron.  HFOF UBP went from $50B to $18B in one year due to reputational capital loss from Madoff money.  HFOF IVY Assets isn't even around having also found they invested $200MM in Madoff.

    2. Paulson & Co., is going to also suffer enormous reputational capital loss and substantial credibility loss if their actions are aligned with transactions most typically defined as insurance fraud.  This exercise is without a doubt insurance fraud in spirit as to whether the CDS and CDO products are legal insurance products and protected under current fraud statutes, this is primarily the question of where this hinges on criminality.  AIG thought they were insurance products hence their participation.  This could ensnare Goldman as well. 

    3.  Wallstreet - this will kickoff a significant selling cycle that was already likely in place with sell the news earnings profit taking and starts a cycle of selling that could be greater than we've seen in the last year.  Banks and Hedge Funds are receiving redemption requests as we speak on the new money just placed or about to be placed with HF's and IB' especially those close to the Goldman / Paulson & Co.  Selling will beget selling as people will sell first and ask questions later, especially with the open endedness of the SEC's statement.    

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  • Silvermetimbers
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    The GS fallout will kill financials this week. As of 10:50 pm (18th of April) Hong Kong shares are being dragged down by financials so it doesn't look good for Monday morning here. Can't wait to see how Citigroup does being the first bank to report earnings after the SEC's GS smackdown.
    18 Apr 2010, 10:54 PM Reply Like
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