Wednesday 4 November 2009

Ponzi scheme?

Came across another very interesting acticle on zerohedge.

The article is actually talking about what Dylan was doing his magic show about : Goldman Sachs amazing earnings.

The chart shows how manipulated the market currently is; it shows Goldman's YTD trading record: in 194 trading days this year the firm was able to make 100 million in 116 occasions.
One trading day resulted in a 100 million revenue for 116 days!! That's equalling at least 11,6 billion in those days only.


The firm just lost money on three days of the last two quarters and there are serious thought about this being a ponzi scheme. "Is this comaprable to the returns generated by a ponzi scheme? Absofuckinlutely."

I actually don't think this is a ponzi scheme(the returns might be equal, but this is - as far as I know - not because of a scheme but because the banks got to buy the assets with taxpayer money when the entire ecoomy was collapsing) but I am worried about the showed revenues; they are way too high to be normal and are very unsustainable.

The banking system is terribly ill. Do you remember the stresstests for banks last year to check whether banks are solvent or not? The official unemployment rates are far higher than the highest estimates in this stress-test and therefore it would be a very logical thought to opt for a new stress-test for banks. One that takes inflation, higher unemployment rates, creative accounting and negative economic growth into account.

Why didn't the government do so yet?

My assumption is that if we do a stress-test as described above new problems(the problems I've been warning about for a few weeks now) will be revealed for everyone since the stress-test results are probably being discusses on the news and the internet.
This might cause a breakdown in the system because people won't rely on the banks anymore and will see that they're everything except for solvent...

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