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Humungous Bank & Broker ~~>Bill Cara’s Blog for April 19, 2010
April 19, 2010 by Bill Cara
Morning Call [7:07am ET] How would you or I like to arrive at the office this morning knowing that the full weight of government regulators in the US, UK, Germany and Canada are going to come crashing down on your company’s reputation like a ton of bricks, where the Prime Minister of England accuses your firm of ‘moral bankruptcy’ on international TV and recent US presidential hopeful Senator John McCain refers to you as a group of double-dealing scum. Clearly the world is upset by this, and traders on Friday knew it as they hammered the market values of the whole of Humungous Bank & Broker (HB&B).

http://www.nydailynews.com/money/2010/04/19/2010-04-19_englands_gordon_b...

Asia-Pacific markets also recoiled, although the Shanghai Composite added to its angst by also reacting to regulator moves in that country to pop the real estate bubble by sending the index down a whopping -4.79%.

Wall Street firms have always traded against the order flow, so the only thing new in the Goldman Sachs case is that this time there is evidence apparently that Goldman Sachs caused the independent traders to make a certain order that the firm exploited. I call it lining up your ducks before you blast away. Goldman Sachs as the hunter; the rest of us the prey, at it were.

And now the hunted are becoming the hunters, and the once mighty firm of Rubin, Paulson, Blankfein et al may die. At the very least, there will be a lot of blank stares on the elevator heading to the desk this morning in the Goldman Sachs building and wherever else their 35,000 staff are employed.

While you all await the raising of the GS white flag, I recommend you watch your own portfolios today. If you have been bullish, the best you can hope for is a sharp plunge and then an immediate snap back. What you don’t want to see is prices hang in close to support as that will likely lead to a grinding action lower as politicians and regulators pile on. The Bears on the other hand are not looking at this situation as a trap. They expect the Bulls to fight. This week will prove even more interesting than most.


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