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Monday, April 13, 2009

Goldman Apparently Walking the Market Up...

[ HT Mongoose ]

FN: That dirty pig Goldman Sachs (GS) is apparently walking the markets up… They seem to doing it very cheaply too.

The Incredibly Shrinking Market Liquidity, Or The Upcoming Black Swan of Black Swans: “Following on the circumstantial evidence track, as Zero Hedge pointed out previously, over the past month, the Volume Weighted Average Price of the SPY index indicates that the bulk of the upswing has been done through low volume buying on the margin and from overnight gaps in afterhours market trading. The VWAP of the SPY through yesterday indicated that the real price of the S&P 500 would be roughly 60 points lower, or about 782, if the low volume marginal transactions had been netted out. And yet the market keeps on rising. This is an additional data point demonstrating that the equity market has reached a point where the transactions on the margin are all that matter as the core volume/liquidity providers slowly disappear one by one through ongoing deleveraging.

Unfortunately for them, this is not a sustainable condition.”

The full article is definitely worth a read.


wunsacon said...

Some questions: The Fed is buying Treasuries. That means *someone* is getting cash. What do you do with US cash? Buy a Cadillac? Buy wheat futures? Buy US stocks? Exchange it for another currency? Or hold USD and wait for even cheaper prices of USD-denominated assets? Well, it seems someone has been buying equities.

Some tinfoil hat speculation: Remember how US property owners sold Rockefeller Plaza to some Japanese investors many years ago, just before real estate tanked? Maybe GS's, er, the market's "goal" here is to raise equity prices and then sell them (at the now-higher multiples) to China. (Wall Street can't unload very much onto the individual investor, who's probably tapped out. But, China has cash. And, though they're supposedly still accumulating Treasuries now, *if* they start selling Treasuries in exchange for USD then maybe they'll buy US equities unknowingly right before a big dump.)


They sell us toxic goods (e.g., drywall). We sell them toxic paper (etc., etc., etc.). "It's allll good." (Uh, no, it's not...We both lose. ... Beam me up, Scotty. There's no intelligent life on this planet.)

Anonymous said...

More about Goldman Sachs here:

As Goldman has started a Court action to shut this site down, it is worth a look-see.