The Goldman has spoken
By Chris ClairNews headline: Goldman Capitulation on Dollar Shows Reversal on U.S.
Maybe it’s just me, but something about large investment banks betting on the decline of the home currency - any currency, really, but especially the home currency - rubs me the wrong way. I’m talking about speculation, here, and not mere currency hedging. Think George Soros and the pound. In my mind, with a firm as large as Goldman Sachs, currency speculation raises the spectre of currency manipulation for political purposes. Just a thought.
Although I guess it’s reassuring (maybe) to know that Goldman and Citi think the dollar is a good bet now.
March 30th, 2010 at 9:36 pm
it’s just you
April 1st, 2010 at 12:14 pm
You gave yourself the answer - but from the tone of your complaint, it is not the answer you want to hear. When GS and Citi went short the dollar, they lost a lot - and they lost it to those who went long, right? That is called LIQUIDITY, something, e.g., the Pakistani stock market does not have, where shorting in any form is prohibited. Also now that GS and Citi went long, they’re wrongly considered patriots in your view, but that is again LIQUIDITY. Both, long and short are fully transparent in our society - these are all very essential things lacking in many other countries. Overall, this leads to the ability to trade, to transact, absolutely essential for the flow of capital, for providing capital. Your tone is familiar to me - the only answer to your request would be a “managed trade” economy - preferred by today’s socialists in the White House and Congress. Then who would decide? That panel in the Kremlin that used to come up with those 5-year plans for the Soviet Union and its satellite dictatorships in the COMECON? And why did the Pakistani stock market go straight down after shorting was forbidden? Because shorts want to catch a move, based on rational analysis about VALUATION. Even if they are right, and stocks or the dollar went down, when they made a certain profit, THEY BUY THEIR POSITION BACK IN - and that is often THE ONLY THING THAT HOLDS A MARKET UP. But socialists don’t want to hear that. Instead, they want to create new mechanisms for arranged trade, where wasteful spending can be “given away” by nepotism or brutal Chicago politics - a favor for a favor - and not the slightest sunshine for transparency - all done behind closed doors on weekend nights. This is the path your comments lead to…