The Goldman settlement

1/2 Billion of capital gone. If GS were able to lever that up say at 10 to 1, that's the equivalent of $5B in margin (or 1MM ES contracts) that could be posted for algo prop trading. That's a heck of a lot of liquidity being drained from the futures market. Get long VIX on thinner liquidity. Joking aside, I unfortunately missed the last $13 run....the stock was a steal in the low 130s. Resistance not far above.....

1/2 Billion of capital gone. If GS were able to lever that up say at 10 to 1, that's the equivalent of $5B in margin (or 1MM ES contracts) that could be posted for algo prop trading. That's a heck of a lot of liquidity being drained from the futures market. Get long VIX on thinner liquidity.

Joking aside, I unfortunately missed the last $13 run....the stock was a steal in the low 130s. Resistance not far above.....

1/2 billion is like 1 month net profit? Anyway, cheap loan available from FED.

1/2 Billion of capital gone. If GS were able to lever that up say at 10 to 1, that's the equivalent of $5B in margin (or 1MM ES contracts) that could be posted for algo prop trading. That's a heck of a lot of liquidity being drained from the futures market. Get long VIX on thinner liquidity.

Joking aside, I unfortunately missed the last $13 run....the stock was a steal in the low 130s. Resistance not far above.....

I luckily just got into GS (dont hate me haha) on Wednesday morning, actually just anticipating a run-up into earnings next week, or at least a test of $150 from below early next week after the other banks quarterlies were out late this week. In any case, I'll probably sell enough of my Aug $165 calls to cover my $$ invested and take a 100% return, which hopefully leaves me plenty of my 30 contracts left, and the rest will be sold at $20 or more when the stocks trading $185 in two weeks.

Tough to say where it goes from here in the shorter term; from a technical standpoint, GS has room up to the 2009 high and beyond, up to about $201/202--but I'm not expecting to see those levels until we see Q3 earnings, possibly even Q4. But back to short term, the stocks going to attract alot of longs with a MACD centerline cross today and the safety of the 65 DMA (aka 13 week ma). Lets face it, $142 - 150 was all computers and stops being blown through at light speed. Tomorrow will be hedge fund mania, they'll either come out guns blazing and start hammering the thing down again, or we'll see more short covering and the wiser short hands either sit out or wait to above 158 or so to try GS as a short again. That being said, my gut says the shorts pin back their ears and sink their teeth into this move tomorrow....but it really all depends on the gap up--if this gaps up opening above 154 theres a case for a long gap reversal, and above 157 on the close (or even better on an open gap) would be EXTREMELY bullish and probably push GS to 180 before July ends.

Either way, lets face it, GS moves the markets, and the charts of the XLF, the SPX and goldman arent that different. If GS gaps up nicely and holds the 150/155 area through earnings, the SPX will retest 1165/73 before the first back to school sale starts (ok maybe not since those probably start in April these days). Personally I dont think the suit was strong or threatening to the firm in any way, and Paulson, Lloyd and the SEC chairman probably are drinking grey goose in Miami right now laughing at the fact that ANYONE really believed our govt would attack a firm with alumni/influence in every corner of the public sector, govt included. Legally, you need to prove damages in a civil case or else why bring the case at all? The investors who lost money weren't suing goldman, unless the SEC was actually suing on their behalf? Who knows, but the point is aside from any negligence or failure by GS to disclose, unless it was clearly an intent to trick or defraud, and someone has a legitimate claim to monetary damages, I dont see how the SEC wins if the settlement wasnt reached. Remove goldman from the picture, and you have an investor in a subprime mortgage CDO during a period where something like 99% of similar type and similar content investments lost almost every dime invested. So the DAMAGE was a loss of capital due to a poor investment decision, not because of goldman's "fraud" That would be like losing money at Trump Plaza and suing the pit boss who simply makes sure dealers and players arent cheating. a casino pit boss causes gamblers to lose money no more than goldman caused anyone to lose $$ in this Abacus case.

I'm just glad its over......for now. Wonder who's next? That team looks eager to tear into some schleps at UBS or DEutsche bank....I bet DB is next. State street was quietly sued and subsequently settled a nearly identical case within the past 12 months. BUt I bet you even floor traders arent aware of that because it wasnt a dog and pony show like every thing that Goldman is involved in becomes.

here's your conspiracy du jour for all we know it was one of those hand-shake deals behind closed doors...before it was even announced--after all, the charges did come from a former goldman alum. GS stock takes a haircut, but the big undercapitalized behemouths were heavily long treasuries...maybe they got short prior to flash crash while they fleeced the sheeple...again. let's see what kind of trading profits they announce....wonder how much they'll put in 'prudency' reserves for the coming qtrs

Edited by VolPivots, 15 July 2010 - 11:23 PM.