April 21, 2010 – It Looks Like the Goldman Sachs (GS) Black Swan Was a One Day Wonder

Featured Trades: (WORLD GDP), (GS), (YEN), (YCS)

4) It looks like the Goldman Sachs (GS) black swan was a one day wonder, as I expected.  It seems that zero interest rates trump all, once again. Even GS stock has been going up, as the flaws in the SEC's case become much more evident. Of course, knocking the socks off their Q1 earnings on the back of huge bond trading profits helped too. A three to two vote? Even the SEC can't agree that there was fraud here. A similar vote with a jury would yield a 'not guilty' verdict. Few have noticed that GS wasn't even an underwriter of the Abacus issue, it was just a facilitator, with greatly diminished responsibilities. I managed to get my yen short back on Sunday night (YCS), just as it appeared that the move was running out of steam, at a vastly better price than my stop out price on Friday. Call me a silly old fool, but I much prefer selling than buying multi year highs. It's going to take a lot more than hanky panky by the vampire squid to pop this liquidity bubble.