Even Goldman Sachs Secretly Believes That An Economic Collapse Is Coming 9/02

Discussion in 'Economy' started by hvactec, Sep 3, 2011.

  1. hvactec
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    hvactec VIP Member

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    Goldman Sachs is doing it again. Goldman is telling the public that everything is going to be just fine, but meanwhile they are advising their top clients to bet on a huge financial collapse. On August 16th, a 54 page report authored by Goldman strategist Alan Brazil was distributed to institutional clients. The general public was not intended to see this report. Fortunately, some folks over at the Wall Street Journal got their hands on a copy and they have filled us in on some of the details. It turns out that Goldman Sachs secretly believes that an economic collapse is coming, and they have some very interesting ideas about how to make money in the turbulent financial environment that we will soon be entering. In the report, Brazil says that the U.S. debt problem cannot be solved with more debt, that the European sovereign debt crisis is going to get even worse and that there are large numbers of financial institutions in Europe that are on the verge of collapse. If this is what people at the highest levels of the financial world are talking about, perhaps we should all start paying attention.

    There is a tremendous amount of fear in the global financial community right now. As I wrote about the other day, the financial world is about to hit the panic button. Things could start falling apart at any time. Most of these big banks will not admit how bad things are publicly, but privately there is a whole lot of freaking out going on.

    According to the Wall Street Journal, Brazil believes that “as much as $1 trillion in capital may be needed to shore up European banks; that small businesses in the U.S., a past driver of job production, are still languishing; and that China’s growth may not be sustainable.”

    Perhaps most startling of all is what the report has to say about the debt problems of the United States and Europe.

    For example, this following excerpt from the report sounds like it could have come straight from The Economic Collapse Blog….

    “Solving a debt problem with more debt has not solved the underlying problem. In the US, Treasury debt growth financed the US consumer but has not had enough of an impact on job growth. Can the US continue to depreciate the world’s base currency?”

    Remember, this statement was not written by some guy on the Internet. A top Goldman Sachs analyst put it into a report for institutional investors.

    The report also goes into great detail about the financial crisis in Europe. Brazil writes about how the euro is headed for trouble and about how dozens of financial institutions in Europe could potentially be in danger of collapse.

    But in any environment Goldman Sachs thinks that it can make money. The following is how Business Insider summarized the advice that Brazil gave in the report regarding how to make money off of the impending collapse in Europe….

    Buy a six-month put option on the Euro versus the Swiss Franc, thus betting the Euro will drop against the Franc (the Franc being the currency that an official Goldman report recently referred to as the most overvalued in the world)
    Buy a five-year credit default swap on an index of European corporate debt—the iTraxx 9. This is a bet that some of these companies will default, and your insurance policy, the CDS, will pay off

    This is so typical of Goldman Sachs. They will say one thing publicly and then turn around and do the total opposite privately

    read more Even Goldman Sachs Secretly Believes That An Economic Collapse Is Coming - TheTradingReport
     
  2. iamwhatiseem
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    iamwhatiseem Gold Member

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    All the government did was treat the symptoms and not the problems.

    Problems not addressed:

    1) Toxic assets are still on the books of most banks.
    2) America's economy was based on extraordinary debt spending, people spending more money than they made...obviously this is unsustainable.
    3) The entire housing market was a government-created housing bubble that the Democrats are actually trying to take steps to recreate.
    4) Concentration of wealth has created a society in America where we are very quickly becoming an indentured nation..where it is absolutely essential that people start working as soon as possible (16 at the latest) and stay working until they are dead or only a few years from death.
    5) Trade imbalance.
    6) World-based economy...Europe goes...we go with it.
     
  3. waltky
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    waltky Wise ol' monkey Supporting Member

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    Uh-oh, here we go again - smells like another bailout comin'...
    :eusa_eh:
    Goldman Sachs reports $393m loss on eurozone impact
    18 October 2011 - Goldman said investor confidence had fallen
     

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