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Michael Clark

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  • Yale's Shiller Still Glum on the Economy, Housing [View article]
    I forgot to comment on this line. This is a typical Republican view-point. If not for the governmental policies of the 'free-market' global economy crowd of the previous 18 years we would not have had a crash at all probably, and also probably not the series of bubbles that put the entire world at its highest point of debt-content in the history of the world.

    It is a fantasy that more debt will cure our debt problem. Obama did not create the debt bubble. (It's true Obama is adding to the debt problem, encouraged to do so (extortion anyone?) by powerful bankers and friends of bankers.) Good God-fearing patriotic American Republicans created the debt bubble. They created a series of bubbles for their own profit, while the majority of working people are now looking at bankruptcy or worse, having fallen for the 'dream' of a never-ending BOOM.

    Everything that expands also collapses. It's a basic law of physics.

    It is also an illusiton that government policies turned the Great Recession of 1929 into a Depression. A recession is like a head cold. And a depression is like kidney cancer. A recession occurs when supply gets ahead of demand and the economy is unanble to digest the supply; consumption slows so that demand can again catch up. Recessions are short-term phenomenon. Depressions mark the end of a long-term expansion of debt. When everyone on the planet is at maximum indebtedness, then the bubble pops and the debt needs to be unwound. You need to work your way back to ground zero -- or not-work your way back.

    The government (including the Fed) is DESPERATE to blow another bubble. That's what the free money to banks was all about, so that they could try to blow another stock bubble. It seems to be working -- although Goldman Sachs is doing most of the trading. But if you make a deal with the Devil -- what do you think the story of Faust is about: it is about taking out a loan hoping you won't have to pay it back. The devil shows up eventually and wakes you up from the dream. Then, all fo the sudden, you are looking at reality, minus the fantasy bubble inside of which you were living for so long.

    I remember a Janice Ian song she wrote when she was 15: "As reality draws near to me I run screaming...!"

    Well, Reality is drawing nearer and nearer. The stock market rally is a Bear Market Rally. Between 1929 and 1932, there was 6 “bear market rallies” that ranged from 12 to 110 percent.

    Take a look at the chart below and tell yourself that it is Obama who is ruining the economy. As always, in American history, it is the banks and bankers' greed that causes our economic depressions -- and we've had a lot of them over the past 230 years.

    www.businessinsider.co...

    "BUT for the government policies
    > of the past six months we'd probably be out of this recession already."
    Jul 26 06:19 AM | 2 Likes Like |Link to Comment
  • Yale's Shiller Still Glum on the Economy, Housing [View article]
    You're a bit optimistic, I think -- at least when compared to the world I'm seeing. Boom and bust go together. Take a look at history. Busts never last two years. If a Boom lasts 18 years, as this one did (1983-2001), then we have a lot more downside and suffering before we arrive at the next boom.

    Americans are hard-working people. But the last boom was fueled on expanded debt -- and the critical weakening of the dollar. We still have to go through a period of strengthening of the dollar -- i.e., higher interest rates, lower property values, and massive reduction of debt -- before another boom will appear.

    Watch out for the housing head-fakes. Housing values have to come back down to salaries. This will happen at about 2019.


    On Jul 26 02:43 AM LKofEnglish wrote:

    > schiller always reverts to form: no housing market no economic growth.
    > he's been sawing that trade since day one and it has been but for
    > one monumental real estate collapse (a time actually when he became
    > quite bullish as the anti-semite above so vocifersously and i would
    > agree truthfully pointed out) a total loser. consumers have more
    > cash BECAUSE of collapsing real estate not in spite of it. lord
    > knows the government is INCAPABLE of raising revenues because of
    > this particular implosion. don't let schiller and his ilk fool you,
    > though. buffet became the world's richest man by IGNORING the schillers
    > of this world. r we surprised buffet is right again while professor
    > schiller reverts to form? too many people assume laziness as a response
    > to a recession. that is what governments do and academics excoriate
    > us all for being--but its not the american people. they're hard
    > at work creating the next boom and BUT for the government policies
    > of the past six months we'd probably be out of this recession already.
    Jul 26 05:53 AM | 1 Like Like |Link to Comment
  • Foreign ETF Performance Doesn't Correlate to Current Economic Data [View article]
    You speak as if the market is a 'rational' being. Didn't we learn last year that the market is a bundle of emotions pretending to be rational and coherent and sane and thoughful and well-dressed?

    The markets are moved by FEAR, nothing else. Fear of missing out on money (Greed) drives the market up; fear of losing money drives the market down. All the rational facade (experts projections, for instance -- who are these experts -- and is economics a science or an art?) -- attempt to dress up FEAR in nice respectable clothes -- that's all.

    Panic buying is the other side of Panic Selling. The Bull is stampeding because it fears it will be left behind. The Bear runs downhill because it realizes the market has a loaded gun and no where to go but hunting -- and that the market is crazy.

    It's all a magic show -- and the magicians are the so-called 'experts' on Wall Street -- the analysts, who pretend they know where the market and earnings SHOULD go.

    Are the experts on Wall Street scientists or artists (magicians)? If the analysts on Wall Street were scientists they could use their numbers and each one could predict future earnings on the money 99 out of 100 times. This is what science does. Science puts a man on the moon 99 out of 100 times it tries. Financial analysis is a magic show -- Caterpillar will lose $900 million this quarter. Where do these projections come from? What's even more ludicrous is that when companies lose money but 'beat Street Projections' (Caterpillar lost only $700 million this quarter) -- this causes the stock to shoot up.

    This is Las Vegas, with a rational face, nothing more.

    The only two professions in the world wherein professionals can be wrong 100% of the time and not lose their jobs are weathermen and economists (financial analysts).


    On Jul 23 10:46 PM RiskReturnOptimizer wrote:

    > Change in future GDP growth rate forecasts drives stock performance.
    > For example, market expects China to grow 8% in 2009, 2010, and 2011.
    > If Goldman comes out with new forecast for 10% in 2010 and 2011,
    > the incremental GDP growth (second derivative) will drive FXI higher,
    > and vice versa.
    >
    > Key is to look at what's baked into the stock prices and anticipate
    > triggers for upside/downside performance.
    >
    > Leading indicators like Baltic Dry Ship index and copper prices were
    > very predictive of China's economic rebound as early as January this
    > year.
    >
    > Each market will be different. For Taiwan, look at leading indicators
    > like demand for new smartphones, early reads on Windows 7 sales,
    > semiconductor bill to sale ratio, etc, to see incremental GDP from
    > tech exports. Domestic spending indicators will be things like new
    > construction permits, immigration of foreign labor from Indonesia
    > / Vietnam, and China policies opening up Taiwan market.
    Jul 26 05:47 AM | Likes Like |Link to Comment
  • Michelle Caruso-Cabrera, Charlie Gasparino Bash Finance Blogs [View article]
    The tards who are bidding up the markets are the guys and gals whose job depends upon the markets going up. If the markets keep going down, they lose their jobs -- and a lot of other people lose their jobs too.

    When did the 'bottom line' -- remember when everyone talked about the 'bottom line'? -- has become 'this company beat Wall Street estimates'. The job of the Cheerleaders for the market is to lead the cheers for the markets.
    Jul 25 01:39 PM | 3 Likes Like |Link to Comment
  • Rail Traffic, Another 'Reality' Indicator, Is Down [View article]
    "Beating estimates" indicates that either (1) the 'experts' on wall street don't know what they are talking about and have projected 'estimates' too low or that (2) real earnings, year-over-year, quarter-over-quarter, don't mean anything when compared to the wisdom of 'experts' on or near Wall Street who know where companies really should be in terms of earnings.

    A company could 'beat estimates' for 10 years running and never make a profit. 'Company A looks pretty good here. It lost a lot less money that we thought it would lose.' That seems to be the kind of logic that is driving this market.
    Jul 25 11:34 AM | Likes Like |Link to Comment
  • Michelle Caruso-Cabrera, Charlie Gasparino Bash Finance Blogs [View article]
    Something's happening here but you don't know what it is, do you, Mister Jones?

    What's happening is that the 'expert' middle-men are being excluded from the conversation. The TV talking heads are getting a bit desperate that they might have to actually work for a living when we all decide they are hot air (and hopeless as entertainment) and we simply turn off our TV sets.
    Jul 25 11:30 AM | 3 Likes Like |Link to Comment
  • Yale's Shiller Still Glum on the Economy, Housing [View article]
    I agree that the writer seems to, quite often, merely read stories on Bloomberg or some other site, and report on that article. I read the article on Schiller on Bloomberg. I can understand using an existing artcle to make your own point, but simply reporting what has already been reported makes me wonder....what's the point? I guess the point is to become one of the leading bloggers on this site. Ok.
    Jul 25 11:22 AM | Likes Like |Link to Comment
  • Yale's Shiller Still Glum on the Economy, Housing [View article]
    Are we going to discuss every commentator's ethnic background and religion? That should be fun. I think Hank Paulson is a WASP, but he might be a Jehovah's Witness. Is Roubini a Catholic Italian?

    Did the Zionists really cause the global collapse? I thought they were on the side of global liberalism and universal government, against aryan regionalism....

    I'm really consfused now.
    Jul 25 11:15 AM | 2 Likes Like |Link to Comment
  • Coffee Wars: McDonald's vs. Starbucks [View article]
    '...There are risks to the McDonald's gambit, including diluting pricing for the entire market over the long term..."

    Remember when competition was supposed to drive down prices for everyone? That was supposed to be the benefit of capitalism. Now, the strategy of undercutting competition by lowering price is considered risky because it might dilute pricing generally. That is one of the things this financial crash is all about. There has been a conspiracy to INFLATE prices for years now. Price dilution will actually defalte the bubble and allow us to start over again, after 18 years of maximum price inflation that has left us all in debt with a weaker currency.

    Lower prices are the ANSWER to our dilemma.
    Jul 20 07:14 AM | 16 Likes Like |Link to Comment
  • Supporting the Financial System by Bleeding the 'Real' Economy [View article]
    Maybe GS stands for 'Get Satanic'.


    On Jul 19 06:04 PM Leftfield wrote:

    > Maybe DC stands for "demonic control."
    Jul 20 07:07 AM | Likes Like |Link to Comment
  • Goldman's Success: Put Down Those Pitchforks [View article]
    ‘Government Sachs’ Is Back
    Who's designing Geithner's rescue plan? Goldman guys, of course.
    Mar 5, 2009


    As it was in the beginning, so shall it be in the end: Goldman Sachs will be there.

    Back in the '90s and through the mid-'00s, major figures from Goldman Sachs such as Robert Rubin, Gary Gensler and Hank Paulson stood fast against derivatives regulation (Rubin and Gensler) and lobbied successfully for higher leverage ratios so they could bet more of their capital on the market boom (Paulson). When those policies came to grief and Wall Street imploded, and the Feds scrambled to rescue stricken insurance giant AIG, Goldman CEO Lloyd Blankfein was reportedly the only bank executive invited to an emergency meeting at the New York Federal Reserve (convened by then-Fed president Tim Geithner).
    Now Treasury Secretary Geithner—a Rubin protégé, of course—has assigned two more ex-Goldman men to fix the vast mess their colleagues helped to create.

    They are Steve Shafran, a former favorite of Paulson's, and Bill Dudley, Goldman's former chief economist and now the successor to Geithner as head of the New York Fed. Shafran and Dudley have been given the mind-bending task of resurrecting the market for securitized assets, a policy that is linked to an effort to lure the private market back in to bid on the toxic securitized assets that sit like dead weight on major banks' balance sheets. This vast project is being designed in two parts. First, revive the asset securitization market, frozen since last year's crash, through the TALF, the Term Asset-Backed Securities Loan Facility (don't try to say this at home!), started up on Tuesday. This program will bundle triple-A-rated loans into new securities and market them. Second, begin to sell off the toxic assets to private funds, in hopes that some day the TALF-revived securitization market will create demand for the lower-rated assets as well. According to a Treasury spokesman, the TALF plan and the troubled-asset buy-up program are "operating on parallel tracks."
    The key now is to bring in hedge funds and other hoards of private capital by giving them government guarantees limiting their potential losses. The pitfall is that if the American public, already riled to populist fury over Wall Street's postcrash perks, finds out what a sweet deal these new investors are getting—without any limitations on executive compensation like those imposed on banks—people might get more upset.
    This is not to speak ill of Shafran and Dudley or, for that matter, Geithner. The plan his Treasury team is working on is intricate, and it may well be the only way to bring the private sector back in—and get the rest of us, the taxpayers, out. A Treasury spokesman says that Shafran and Dudley are not the only ones working on the plan, which Geithner is personally overseeing. "It's been a group effort," he says, adding that there are no price guarantees. The private funds and the government will "share" first losses and profits, though details haven't been fleshed out. Nor should we ignore the fact that Goldman's "best and brightest" have sometimes dug us out of holes in the past. Former Treasury Secretary Robert Rubin, for example, is often criticized these days (by me, among others) for quashing then-Commodity Futures Trading Commission Chairwoman Brooksley Born's 1998 proposal to discuss derivatives regulation. What is rarely noted is that Rubin, at the time, was in the middle of resolving the Asian financial contagion, and he was justly concerned with sending a chilling message to Wall Street.

    Still, the omnipresence of Goldman Sachs does make one wonder about the insularity of this world—what economist Jagdish Bhagwati once called the "Wall Street–Treasury complex." Or as another joke has it, Goldman is so politically savvy in Washington, it should be called "Government Sachs." Is there no one else to fix the crisis but specialists from the company that helped create it? According to a new report out by the public advocacy group the Consumer Education Foundation, over the past decade Wall Street investment firms, commercial banks, hedge funds, real-estate companies and insurance conglomerates forked over $1.725 billion in political contributions. They spent another $3.4 billion on lobbyists.
    "Our government has been misappropriated by Goldman Sachs," says Christopher Whalen of Institutional Risk Analytics, a long-time critic of Geithner, whom Whalen likens to Chauncey Gardiner, the clueless hero of "Being There," who is manipulated by everyone around him. And if Wall Street elites continue to make government policy, will the new regulatory controls we hear so much about—the ones that are supposed to prevent this from happening again—ever really be adopted?
    This is the critical question. Despite continued public support for President Obama and early signs that Geithner's various rescue plans—including the $75 billion mortgage bailout scheme announced this week—may be starting to reassure the markets, there is little sign as yet that the administration is engaged in the kind of fundamental rethinking of financial safety and soundness that we need. The problem is not just that Wall Street giants like Goldman, Citigroup and AIG ran wild over the past 20 years, it is that they exist in their current form at all. These institutions are too big and too systemic to be allowed to fail according to normal free-market rules, and if they remain that way we will inevitably find ourselves in a situation where taxpayers must rescue them once again.


    We have been through this nightmare before, almost step by disastrous step. From 1932 to 1934 the Senate banking and currency committee held hearings on the 1929 crash and found that commercial banks had misrepresented to their depositors the quality of securities that their investment-banking sides were underwriting and promoting. According to a history posted by the Federal Deposit Insurance Corp. on its Web site, among the culprits was First National City Bank (now Citigroup), which was found to have repackaged the bank's Latin American loans and securitized them without disclosing its own confidential findings that the loans posed adverse risks. Sound familiar? The response of the government in that era was decisive: the Glass-Steagall Act, which separated commercial banking from investment banking. It is a supreme historical irony that 65 years later it was Citigroup, grown monstrous again, that pushed hardest for the destruction of the Glass-Steagall reforms. And it had a big assist from Goldman grads such as Bob Rubin, who was soon afterward hired as chairman of Citi's executive committee.
    As the new Consumer Education Foundation report concludes: "Glass-Steagall was a key element of the Roosevelt administration's response to the Depression and considered essential both to restoring public confidence in a financial system that had failed and to protecting the nation against another profound economic collapse." Even if we believe that the economic and financial system may be stabilizing five weeks into Obama's presidency, it's hard to conclude that fundamental confidence has been restored.
    Perhaps the Obama administration will see the light and at some point forthrightly address the "too big to fail" problem that even Federal Reserve chairman Ben Bernanke said again this week was "enormous." But it is hard to imagine that a team composed largely of Wall Street's former finest will, all by themselves, push for the breakup of the firms that nurtured and enriched them. And there is scant evidence that Geithner is now soliciting advice from others on the outside, including the new panel led by Paul Volcker—a diehard skeptic of Wall Street's agenda—that Obama set up precisely for this purpose. Who is the Treasury secretary relying on? We don't really know, but certainly one close adviser must be Mark Patterson, Geithner's new chief of staff. Patterson is the former Washington lobbyist for Goldman Sachs.
    © 2009
    Malcolm Turnbull
    Jul 20 01:07 AM | 2 Likes Like |Link to Comment
  • Goldman's Success: Put Down Those Pitchforks [View article]
    How Goldman Sachs took over the world

    By Stephen Foley
    Tuesday, 22 July 2008


    If there's something weird in the financial world, who you gonna call? Goldman Sachs.

    The US government, involved in a firefight against the conflagration in the credit markets, is calling in another crisis-buster from the illustrious investment bank, this time Goldman's most senior banker to finance industry clients, Ken Wilson.

    And so with this appointment, the Goldman Sachs diaspora grows a little bit more influential. It is an old-boy network that has created a revolving door between the firm and public office, greased by the mountains of money the company is generating even today, as its peers buckle and fall.

    Almost whatever the country, you can find Goldman Sachs veterans in positions of pivotal power.

    The 61-year-old Mr Wilson has already proved influential in deals to recapitalise and reorganise some of America's listing banks. At the Treasury he will advise on what the federal government must to do help the process, but he will face scrutiny from those concerned about the tentacles wrapping lightly around government from Wall Street's mightiest bank. For the time being, bailing out Wall Street looks to be the same as bailing out the economy, but if those diverge there could be more questions asked about the influence of Goldman Sachs alumni on public policy.

    George Bush picked up the phone this month, partly at the instigation of another Goldman Sachs alumnus, his Treasury secretary, Hank Paulson. Together with Mr Bush's chief of staff, Joshua Bolten, there will be three Goldman Sachs old boys in major positions of influence in the White House – but the US government is hardly alone in finding the bank's executives to be attractive hirees.

    They are well-credentialed, partly by design. From its beginning when the German immigrant Marcus Goldman began discounting IOUs among the diamond merchants of New York in the 1870s, Goldman Sachs has always known about the power of the network of influence. Goldman hires former politicians and civil servants, as readily as it supplies them.

    And then there is simply the intellectual quality of the employees, many hired as much youngster men via a gruelling interview process, and then forged in the fire of 17-hour work days.

    With Goldman Sachs at the heart of Wall Street, and Wall Street at the heart of the US economy, few expects its power to wane. Indeed, The New York Times columnist David Brooks noted that Goldman Sachs employees have given more money to Barack Obama's campaign for president than workers of any other employer in the US. "Over the past few years, people from Goldman Sachs have assumed control over large parts of the federal government," Brooks noted grimly. "Over the next few they might just take over the whole darn thing."

    John Thornton

    From his post as professor and director of global leadership at Tsinghua University in Beijing, the former Goldman Sachs co-chief operating officer John Thornton has become a highly-influential figure in the developing business and poltical inter-relations between the US and China. He was Goldman's boss in Asia in the mid-Nineties and remains well connected in the East and the West.

    Duncan Niederauer

    Wall Streeters joked about a Goldman Sachs "takeover" of the New York Stock Exchange. Hank Paulson, the Goldman boss on the NYSE board, moved to oust the chairman, Dick Grasso, and recommended the then chief operating officer of Goldman, John Thain, as Mr Grasso's replacement. Mr Thain modernised the exchange as demanded by Goldman, and Mr Thain's old Goldman deputy, Duncan Niederauer, is in charge.

    Jon Corzine

    The former co-chief executive of Goldman went into full-time politics in 1999, having lost the internal power struggle that preceded the company's stock-market flotation in 1999. He has been governor of New Jersey since 2006, having spent the previous six years in the US Senate. His 2000 Senate election campaign was then the most expensive ever in the US, and Corzine spent $62m of his own money.

    Joshua Bolten

    For five years until 1999, Mr Bolten served as director of legal affairs for Goldman based in London, effectively making him the bank's chief lobbyist to the EU. The Republican lawyer aided George Bush's 2000 election campaign, helped co-ordinate policy in the White House and has been the President's chief of staff since 2006.

    Paul Deighton

    The man heading London's planning for the 2012 Olympic Games, Paul Deighton amassed a fortune estimated at over £100m during his two decades at Goldman Sachs, where he had been one of its most powerful investment bankers.

    Robert Rubin

    A US Treasury secretary under Bill Clinton, Mr Rubin could once again emerge as a powerful figure in Washington if Barack Obama wins the presidency, since he has maintained his influence on Democrat politics. Mr Rubin reached the second-highest rung at Goldman, becoming co-chief operating officer before joining the US government in 1993.

    Gavyn Davies

    The ex-chairman of the BBC still has the ear of Gordon Brown, to whom he has been a good friend and informal adviser. He is married to the Prime Minister's aide Sue Nye. Mr Davies spent 15 years as an economist at Goldman. He was commissioned to report on the future funding of the BBC by Mr Brown in 1999. Two years later, he was poached to chair it.

    Jim Cramer

    This former Goldman trader is, without question, the most influential stock pundit in the US. Hectoring and shouting his investment advice nightly on his CNBC show, Mad Money, he routinely moves share prices. His primal scream against the Federal Reserve ("They know nothing") was a YouTube sensation last year, as the central bank refused to lower interest rates to ease the pain of the credit crisis on Wall Street.

    Robert Zoellick

    Goldman provided a lucrative home to Robert Zoellick, the neo-conservative Republican, between the time he quit as Condoleezza Rice's deputy at the State Department in 2006 (having not secured the job he coveted as Treasury Secretary, when it went to Hank Paulson) and his appointment last year as head of the World Bank. At Goldman he had acted as head of international affairs, a kind of global ambassador and networker-in-chief.

    Mario Draghi

    The head of the Italian central bank is another example of the revolving door between Goldman and public service. Mr Draghi had been an academic economist, an executive at the World Bank and a director-general of the Italian treasury before joining Goldman as a partner in 2002. He is becoming a significant figure in the response to the credit crisis, chairing the financial stability forum of central banks, finance ministries and regulators.
    Jul 20 01:04 AM | 4 Likes Like |Link to Comment
  • Goldman's Success: Put Down Those Pitchforks [View article]
    Goldman Sachs Loses Grip on Its Doomsday Machine: Jonathan Weil

    Commentary by Jonathan Weil


    July 9 (Bloomberg) -- Never let it be said that the Justice Department can’t move quickly when it gets a hot tip about an alleged crime at a Wall Street bank. It does help, though, if the party doing the complaining is the bank itself, and not merely an aggrieved customer.

    Another plus is if the bank tells the feds the security of the U.S. financial markets is at stake. This brings us to the strange tale of Goldman Sachs Group Inc. and Sergey Aleynikov.

    Aleynikov, 39, is the former Goldman computer programmer who was arrested on theft charges July 3 as he stepped off a flight at Liberty International Airport in Newark, New Jersey. That was two days after Goldman told the government he had stolen its secret, rapid-fire, stock- and commodities-trading software in early June during his last week as a Goldman employee. Prosecutors say Aleynikov uploaded the program code to an unidentified Web site server in Germany.

    It wasn’t just Goldman that faced imminent harm if Aleynikov were to be released, Assistant U.S. Attorney Joseph Facciponti told a federal magistrate judge at his July 4 bail hearing in New York. The 34-year-old prosecutor also dropped this bombshell: “The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways.”

    How could somebody do this? The precise answer isn’t obvious -- we’re talking about a black-box trading system here. And Facciponti didn’t elaborate. You don’t need a Goldman Sachs doomsday machine to manipulate markets, of course. A false rumor expertly planted using an ordinary telephone often will do just fine. In any event, the judge rejected Facciponti’s argument that Aleynikov posed a danger to the community, and ruled he could go free on $750,000 bail. He was released July 6.

    Market Manipulation

    All this leaves us to wonder: Did Goldman really tell the government its high-speed, high-volume, algorithmic-trading program can be used to manipulate markets in unfair ways, as Facciponti said? And shouldn’t Goldman’s bosses be worried this revelation may cause lots of people to start hypothesizing aloud about whether Goldman itself might misuse this program?

    Here’s some of what we do know. Aleynikov, a citizen of the U.S. and Russia, left his $400,000-a-year salary at Goldman for a chance to triple his pay at a start-up firm in Chicago co- founded by Misha Malyshev, a former Citadel Investment Group LLC trader. Malyshev, who oversaw high-frequency trading at Citadel, said his firm, Teza Technologies LLC, first learned about the alleged theft July 5 and suspended Aleynikov without pay.

    ‘Preposterous’ Charges

    Aleynikov’s attorney, Sabrina Shroff, told the judge at the bail hearing that Aleynikov never intended to use the downloaded material “in any proprietary way” and that the government’s charges were “preposterous.”

    Goldman isn’t commenting publicly about any of this, though it seems the bank’s bosses want us to believe there’s no need to worry. On July 6, Dow Jones Newswires quoted a “person familiar with the matter” saying this: “The theft has had no impact on our clients and no impact on our business.” Note that this person was so familiar with Goldman that he or she spoke of Goldman’s clients as “our clients” and Goldman’s business as “our business.”

    By comparison, last Saturday, while most Americans were enjoying the Fourth of July holiday, Facciponti was in court warning of looming threats to Goldman and the financial markets.

    “The copy in Germany is still out there,” the prosecutor said, according to an audio recording of the hearing. “And we at this time do not know who else has access to it and what’s going to happen to that software.”

    Secret Software

    “We believe that if the defendant is at liberty, there is a substantial danger that he will obtain access to that software and send it on to whoever may need it,” Facciponti said. “And keep in mind, this is worth millions of dollars.”

    By “millions,” it’s unclear if that would be enough to match Goldman Chief Executive Lloyd Blankfein’s $70.3 million compensation package for 2007. Or perhaps millions means thousands of millions, otherwise known as billions.

    Facciponti said the bank told the government that “they do not believe that any steps they can take would mitigate the danger of this program being released.” He added: “Once it is out there, anybody will be able to use this, and their market share will be adversely affected.” All Aleynikov would need to get the code from the German server is maybe 10 minutes with a cell phone and an Internet connection, Facciponti said.

    Judge’s Ruling

    The hole in Facciponti’s argument was that the government offered no evidence that Aleynikov had tried to disseminate the software during the month prior to his arrest, after he downloaded it and had left his job at Goldman. That’s the main reason the judge, Kevin N. Fox, cited in ruling Aleynikov could be released on bail.

    “We don’t deal with speculation when we come to court,” Fox said. “We deal with facts.”

    Meantime, it would be nice to see someone at Goldman go on the record to explain what’s stopping the world’s most powerful investment bank from using its trading program in unfair ways, too. Oh yes, and could the bank be a bit more careful about safeguarding its trading programs from now on? Hopefully the government is asking the same questions already.

    (Jonathan Weil is a Bloomberg News columnist. The opinions expressed are his own.)

    To contact the writer of this column: Jonathan Weil in New York at jweil6@bloomberg.net
    Jul 20 01:00 AM | 3 Likes Like |Link to Comment
  • Bank Earnings: Revenues Falling, Losses Rising [View article]
    Very good article. Where are all the talking heads on tv doing their research? I see mostly cheerleaders for Goldman Sachs.

    "...For the last decade most of the “growth” in the U.S. economy has been nothing more than under-reported inflation..." And that's why deflation becomes necessary.
    Jul 19 12:37 PM | 2 Likes Like |Link to Comment
  • Jon Stewart Takes on Goldman Sachs [Video] [View article]
    Let's face it. Goldman Sachs gives more money to Democrats than Republicans because Republicans are by ideology already supportive of 'free-market' business. Giving money to the Republicans is like preaching to the converts. The Democrats, historically, are the adversaries of Big Business -- so they are also the ones who need to be bought. The Republicans are already bought, ideologically.
    Jul 19 11:06 AM | 3 Likes Like |Link to Comment
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