Zero Hedge has long discussed the strange phenomenon whereby Goldman recommends a trade only to unwind it shortly, after institutional clients who have been naive enough to follow it, end up losing millions, sometimes in a period as short as a few days. The observation there being that the only way Goldman scores something like a perfect 63 out of 63 quarter is by literally raping its clients, along the lines of what Goldman is currently facing civil and criminal probes for allegedly doing in the CDO space. And while our rant has been public for quite some time, yesterday was the first time the Bloomberg also decided to join the fray.
Presenting exhibit A: Goldman's recommended top trades for 2010
It may come as no surprise to you that had you followed these 9 trading recommendations, you would have made money on precisely two of them. And here don't even discuss the well documented flipflopping in the FX department's EURUSD recommendations, in which the firm changed its view on the euro three times in the span of a month, being stopped out every single time!
Here is Bloomberg's commentary on this:
Seven of the investment bank’s nine “recommended top trades for 2010” have been money losers for investors who adopted the New York-based firm’s advice, according to data compiled by Bloomberg from a Goldman Sachs research note sent yesterday. Clients who used the tips lost 14 percent buying the Polish zloty versus the Japanese yen, 9.4 percent buying Chinese stocks in Hong Kong and 9.8 percent trading the British pound against the New Zealand dollar. Goldman Sachs analysts made eight trade recommendations for this year in December, including telling clients to buy the British pound against the New Zealand dollar. On April 1, Goldman Sachs added a ninth “top” trade, telling clients to buy Chinese stocks listed in Hong Kong and predicting the Hang Seng China Enterprises Index would rise 19 percent to 15,000.Since then, the gauge has slid 9.4 percent to 11,426.18. The Shanghai Composite index has entered a bear market, losing about 21 percent this year. That’s the third biggest decline in the world after Greece and Cyprus. The decline accelerated this month on concern Greece, Spain and Portugal will struggle to finance their budget deficits and dismantle the euro.The Chinese stock recommendation was made by a group led by Dominic Wilson, a senior Goldman Sachs economist in New York. Wilson cited inexpensive valuations and “robust” economic growth. He also said investors have already factored in the risk of higher interest rates in China.Wilson wasn’t available to comment because he was out of the office traveling, according to an e-mail.
Of course, Goldman's losses are its clients' gains, and more significantly, vice versa:
Goldman Sachs makes more money from trading than any other Wall Street firm. In the first quarter, the bank’s $7.39 billion in revenue from trading fixed-income, currencies and commodities dwarfed the $5.52 billion made by its closest rival, Charlotte, North Carolina-based Bank of America Corp. In equities, Goldman Sachs’s $2.35 billion in revenue was about 50 percent higher than its nearest competitor.
And this is a firm that is now trying to convince pension funds to put more money in the firm, when instead it should be convincing Christine Varney it is not the biggest market monopolist since Standard Oil and Ma Bell.
Bangkok stock exchange is on fire. Literally !
Yea, but markets don't give a darn about
them.
It's far way from PIIGS.
Wake the markets up if they burn Athens, Madrid,
Lisbon stock exchange.
@Eduardo
Haven't read anything lately on Thailand, so thanks for the update. We may see this "happen" to the NYSE later this year or next. Best way to shut down a falling market.
And I bet Timmay and Ben know how to make a good Molotov.
They have doing this snaky crap for many years, not just recently. I can remember distinictly where I reported to the SEC and FINRA how they would make a recommendation on a tech stock, then 2 weeks later come out with a totally different view. All the while, they were doing opposite of what they recommended guaranteed. That is why I have always said, do the opposite of what they say if you want to make money.
Fuck-the-clients is an ingrained part of the culture.
I have trouble understanding why this isn't more widely understood.
I guarantee that plenty of clients getting fucked will say something like... "Oh, but not my advisor. He/she is a nice person. They would never do anything wrong to me."
Nice brand these guys have...regular people seem to have a correctly very unfavorable view of them, however, elite money movers still seem to think they are the man...how does anyone that tries to raise money or manages money let these criminals anywhere near their money? They have bankrupted individuals, pension funds, towns, countries and themselves...and will likely help in taking out US taxpayer/our currency and people still deal with them, amazing....
Oh man, I just put all my funds in GS knowing they are actually TreasDept North. What to do, what to do?
you are going to experience "leakage" (industry term)
Oh by the way those "institutional clients" are the pension managers and such - you know the ones you probably pay a fee to manage your money. What the fuck do they do to earn their money? Are they children or adults - and if the former whay do they get paid big bucks?
Sure there are always snake oil salesmen, corrupt merchants, liars, cheats etc etc - the guy you are paying to manage your money gets paid a lot - for what? To develop a brain and think and not get suckered by the next scamster he runs into. Direct your anger at the right place.
Your "light bulb" moment as the scam is revealed to you.
Real Money, you know, like savings - are the mothers milk of the makets - everything else is built on this. People with real money and the people who as fiduciaries are managing real money - need to grow a set. You are the kings of capitalism - not the sell side jokers. treat the sell side - like you would treat encyclopedia salesmen, used car sales men etc. If your money moanager has a deferential attitude to sell side sharks - fire him. people with actual capital better start calling the shots.
The world exchanges its pension contributions into bonuses for Goldman. It is kind of funny (if it weren't so sad) how stupid the pension fund managers are while still pulling in huge bonuses for themselves. What a great system - money for everyone except the retiree - OH - the government will cover that..
Why are people with the real money ( yes the little old ladies with a million or two stashed away in a bank ) - whining and wheedling like pussies- huh? get aggressive. Fire your stupid money manager and do it youself. demand justice. You hold capitalism by the balls. Its your capital.
In contrast much of the "capital"/"liquidity" on wall street is - kinda like if you bet the homeles guy down the street a million bucks that it will rain next Tuesday - and it rained - and he owes you a million bucks - sure - yeah right. Or its like you take your old sneakers to Bennie Mae and he provides a one week loan for a million dollars against youtr sneakers. It aint Real Capital. Its just mere liquidity/ vapor.
kinda like if you bet the homeles guy down the street a million bucks that it will rain next Tuesday - and it rained - and he owes you a million bucks - sure - yeah right.
counterparty risk FTW
homeles s
two s's you fart
Velobabe, it looks like you're sporting a new picture of you flashing your package.
I guess you got tired of various men who couldn't tell that your prior picture was taken with the light source coming from an angle. Thank you for making it "clearer" for those few who need to see things straight on, so to speak.
Maybe you should include a link for those who wish a blow up version. :>)
plus wanted to show off my hair. growing it really long,
so i can donate it to the oil spill in gulf of mexico.
well actually it is in honor of the maglia rosa.
pink jersey,
Giro d'Italia, Italy, GT
My view is that grannie has faith in her "advisor" and the bail out was to cover the losses of the "advisors".
The truth will come out.
jal
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