Thursday, May 13, 2010
Rigged-market theory: A home run every time at bat
Goldman Sachs, Bank of America, JP Morgan Chase and possibly Citigroup all made money every single trading day last quarter. Not one day of trading losses. Not one. Four banks. For an entire quarter. A home run every time at bat. Jonathan Weil calculates the odds of that happening under normal trading conditions. But we’re not living under normal conditions. We’re literally printing money and loaning it to “too big to fail banks” at such super-low interest rates that even a blind orangutan could make a buck trading. But Weil says that still doesn’t account for the banks’ amazing juiced-up trading averages. I’ll let him explain. Hint: It has something to do with Pretend Capitalism. … P.S. – Good ol’ Uncle Warren. No wonder why he invested in Goldman Sachs.
Goldman Sachs, Bank of America, JP Morgan Chase and possibly Citigroup all made money every single trading day last quarter. Not one day of trading losses. Not one. Four banks. For an entire quarter. A home run every time at bat. Jonathan Weil calculates the odds of that happening under normal trading conditions. But we’re not living under normal conditions. We’re literally printing money and loaning it to “too big to fail banks” at such super-low interest rates that even a blind orangutan could make a buck trading. But Weil says that still doesn’t account for the banks’ amazing juiced-up trading averages. I’ll let him explain. Hint: It has something to do with Pretend Capitalism. … P.S. – Good ol’ Uncle Warren. No wonder why he invested in Goldman Sachs.
