Golden Boy Sacked

Wall St Swooned By GS Fraud Charges
Goldman Sachs weighed heavily on the financial sector after the Securities and Exchange Commission (SEC) charged the banking baron with defrauding investors. This troubling news effectively overshadowed a well-received earnings report from Bank of America (BAC), and stocks spent the day wallowing in red ink as a result.

The suddenness of the announcement caused stocks to tumble Friday, with the Dow industrials skidding to end just above 11,000, as financial shares retreated after U.S. regulators charged Goldman Sachs with defrauding investors.

World equities will move in sympathy with U.S. stocks, which were under severe selling pressure as financial issues plunged on the charges against Goldman Sachs and some disappointing earnings

.

The decline was the market's biggest in nearly two months, taking the shine off a six-day winning streak.

By the time the closing bell mercifully sounded, the Dow Jones Industrial Average (DJIA – 11,018.66) was sitting on a deficit of nearly 126 points, or 1.1%, as all but two of its 30 components closed lower. Coca-Cola and Verizon Communications were the only advancing Dow members, while Bank of America led the 28 declining equities with a loss of more than 5%. The Dow still eked out a slim gain of 0.2% for the week, and bulls can take heart in the knowledge that the blue-chip barometer maintained its footing above both the 11,000 level and its 10-day moving average.

The S&P 500 Index (SPX – 1,192.13) wrapped up the day with a drop of about 20 points, or 1.6%, surrendering its short-lived grasp on the 1,200 level. Unlike the Dow, though, the SPX shed 0.2% for the week, and ended the session just below its 10-day moving average. Finally, the Nasdaq Composite (COMP – 2,481.26) shed 34.4 points, or 1.4%, and trimmed its weekly gain to just 1.1% in the process. The COMP backpedaled below 2,500, but it's still trading comfortably above its own 10-day trendline.

Goldman Sachs >>> Inside Looking Out

This, my faithful ZLBT followers, is the Goldman Sachs story any investors worth their salts will want to know, and the accusation that just might stick - like water on a duck's back.

The Securities and Exchange Commission has charged Goldman and a senior employee with deliberate deception of some customers in order to benefit others. If it's true, Goldman stands to lose the one thing its harshest critics have never been able to take away from it: its clients.

According to the charges filed (in a nutshell), Goldman created Abacus 2007-AC1 in February 2007 at the request of John A. Paulson, a prominent hedge fund manager who earned an estimated $3.7 billion in 2007 by correctly wagering that the housing bubble would burst. Mr. Paulson is not named in the suit.

Goldman told investors that the bonds would be chosen by an independent manager. In the case of Abacus 2007-AC1, however, Goldman let Mr. Paulson select mortgage bonds that he believed were most likely to lose value, according to the complaint. Goldman then sold the package to investors like foreign banks, pension funds and insurance companies, which would profit only if the bonds gained value.

The European banks IKB and ABN Amro and other investors lost more than $1 billion in the deal, the commission said.

Why would SEC wanna be spoiler when the bulls are partying in Wall St?

This fiasco will ignite a (staged?) battle royale between Wall Street's most powerful bank and the nation's top securities regulator.

The lawsuit could be a sign of a revitalized Securities and Exchange Commission, which has been criticized for early missteps in assessing the causes of the financial crisis - which is the glorified truth. The agency appears to be tracing the mortgage pipeline all the way from the companies like Countrywide Financial that originated home loans to the raucous trading floors that dominate Wall Street’s profit machine.

Goldman issued a statement after the market closed saying that the firm had lost money on the said deal in the S.E.C. case and that it provided investors with extensive disclosure on the deal. The firm said the losses in the deal came from the overall collapse of the mortgage market, not from the way the deal was structured.

Goldie gets a political blackeye

The accusations amount to a black eye for the once-untouchable Goldman Sachs, a money machine that is the epicenter of Wall Street power. For decades, its platinum reputation has attracted top investors and stock underwriting deals.

GS is the top political election funds donor >>> contributing 4 time more to Obama's Presidential Election campaign than to rival John McCaine, the Democrats presidential hopeful.

President Obama is adamant to hasten financial reforms before another crisis can become one torpedo too many. The quickest way to get this over with is to grab the top guys by the balls and the rest will follow.

You are so naive as to believe only Bursa, SC and BN can do "sandiwara?" Nobody puts it any better than the Yankees >>> YOU AIN'T SEEN NOTHING YET!

As for our goldenboy GS, for all their coperations, obedience and "whipping boy" role - Goldman Sachs Investment Group will be rewarded with total investment dominace for the next century >>> if America can survive that long.

Hang in there folks

Wall St is not all about Goldman Sachs only. The bulls are given unrecorded leave

There are enough fish in the ocean for a mother of all seafood buffet

ZL remains optimistic of bullish returns soon

You cannot blame an eccentric like me , or can you?

Stay tune to ZLBT for the lastest and "out of the box" thinkabouts