Comments on: Fixing information asymmetries http://blogs.reuters.com/felix-salmon/2010/07/02/fixing-information-asymmetries/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: Danny_Black http://blogs.reuters.com/felix-salmon/2010/07/02/fixing-information-asymmetries/comment-page-1/#comment-16402 Mon, 05 Jul 2010 15:30:03 +0000 http://blogs.reuters.com/felix-salmon/?p=4553#comment-16402 KidDynamite, I think more importantly than the narrow affect of CDSes is the general chaos there would have been in the market if suddenly none of those counterparties had CDS protection on their CDOs and suddenly had to to take that hit to their balance sheets whilst the money markets were frozen due to LEH bankruptcy.

From recollection, a significant portion of the hedging was short equity positions against AIG, which of course they are being demonised for now.

HBC, are you capable of posting links that are not clearly BS? If you had even a passing acquaintance with any of the markets you seem to pontificate on you’d know that in 2007-2008 the commodity markets were bubble due to massive stockpiling by a number of countries – Philipines in particular with regard to rice – and “green” legislation on ethanol based fuels which pushed out other crops at the time. But hey why bother with facts when you can blame Goldmans?

]]>
By: sgreillylives http://blogs.reuters.com/felix-salmon/2010/07/02/fixing-information-asymmetries/comment-page-1/#comment-16397 Mon, 05 Jul 2010 00:22:45 +0000 http://blogs.reuters.com/felix-salmon/?p=4553#comment-16397 Being able to see things before others, does that include conversations with the NYFED? Andrew Ross Sorkind had Fuld whimpering that the FED sees everything so they had to be clean when dealing with them. My goodness how blind can the CEO be when he cannot be aware of the REPO action going on each quarter? (Ken Lay anyone? ( Shultz!!!!)) Getting back to reality here, we are very close to Goldman undertaking insider trading. Are they really smarter (ie better at statistical modelling) or better at getting inside information (legally of course?)
The shame of it is that people like Buffet have stopped thinking for themselves (he stopped about 30 years ago)and rely upon others bringing them the deals. In other words, the whole idea of the market is informational asymmetry only so long as the market is perfect in that it clears. The market is made by a few people and that is the problem because therein becomes the flaw. Only a fool invests their money in the market because it is not designed to help them or to allocate money to the most profitable industries. The information asymetry makes the traders (whoops I meant bankers) rich, so long as they do not get to large of slice no one minds, but everyone knows it.

There are markets and listing processes that only a handful of firms have entry into and they have no intention or motive to share the wealth. In one sense, why should they? But in another, why continue with the claim that the market is efficient?

]]>
By: HBC http://blogs.reuters.com/felix-salmon/2010/07/02/fixing-information-asymmetries/comment-page-1/#comment-16390 Sat, 03 Jul 2010 20:31:56 +0000 http://blogs.reuters.com/felix-salmon/?p=4553#comment-16390 When your confidant writes of being reminded of his duties to Goldman clients, the asymmetry of those duties becomes instantly apparent. To some, GS had a greater duty than to others.

Doing God’s work translates into playing God? Goldman, we have a problem.

]]>
By: killben http://blogs.reuters.com/felix-salmon/2010/07/02/fixing-information-asymmetries/comment-page-1/#comment-16383 Sat, 03 Jul 2010 13:26:58 +0000 http://blogs.reuters.com/felix-salmon/?p=4553#comment-16383 “More generally, the problem here is that Goldman makes money from knowing or seeing stuff that other people don’t know or don’t see”

Perfectly OK for Goldman to make money. WHAT IS NOT OK IS THE FED BAILING IT OUT WHEN IT WOULD HAVE GONE BANKRUPT!!

“It saw problems in the housing market which AIG was oblivious about, and took advantage of the information asymmetry there to make money. That’s how markets work.”

EXACTLY!!

AIG also should have gone … that is how markets work!! WHAT THE $@%$ IS THE FED DOING MEDDLING IN THE MARKETS.. ALLOW IT TO WORK .. THAT IS WHAT WE WANT .. YOU TAKE RISKS … YOU MAKE MONEY KEEP IT .. YOU LOSE BIG TIME YOU CLOSE SHOP AND GO AWAY!!

THE OBJECTION IS ON THE BAILING OUT OF GOLDMAN BY THE CONNIVING SCOUNDREL BEN BERNANKE

]]>
By: KidDynamite http://blogs.reuters.com/felix-salmon/2010/07/02/fixing-information-asymmetries/comment-page-1/#comment-16369 Fri, 02 Jul 2010 23:37:45 +0000 http://blogs.reuters.com/felix-salmon/?p=4553#comment-16369 to me, there is one point to focus on with the whole GS – AIG situation, but it’s kinda subjective, and perhaps that’s why it’s often overlooked.

the whole “GS is a bad guy for demanding collateral from AIG” meme is nonsense – and i’m not suggesting that you’re arguing that, Felix. What is also nonsense is Blankfein’s claim that GS was fine if AIG went down, because GS was hedged, via collateral and CDS on AIG purchased from others. as we know, there is/was massive systemic interconnectedness between all the players in the system, and if the government hadn’t funneled money through AIG to GS, it’s a pretty vast presumption by Blankfein that they’d have just been able to collect from their other CDS counterparties on the payouts they’d be owed after AIG failed. THAT is the point people constantly seem to miss harping on, but it’s the most important one.

(in case it’s not clear, all i’m saying is that GS”s claim that it was hedged with respect to AIG is almost certainly total bullshit – even though on paper it may be true – in reality, the “hedge” would have failed.)

]]>
By: HBC http://blogs.reuters.com/felix-salmon/2010/07/02/fixing-information-asymmetries/comment-page-1/#comment-16365 Fri, 02 Jul 2010 17:44:05 +0000 http://blogs.reuters.com/felix-salmon/?p=4553#comment-16365 After screwing entire countries…

http://tinyurl.com/254oevs

AIG’s doesn’t seem all that important really, more like what GS eats for dessert. Credit where credit’s due: regulation’s the least of what’s in store for the goons of Goldman, to do them justice.

]]>