Photo from NY Daily News. Article by Lawrence Lockhart, Jr.
On Tuesday April 27, for upwards of 10 hours, W.D.C. politicians grilled and lambasted both execs and lackeys from Goldman Sachs in a comical theater broadcast to the world courtesy of CNBC. For all intents and purposes, the Senators let the Goldman boys have it, hurling insults, questioning motives, and openly displaying impatience with temperate answers. The question now is if what appears to have happened really happened or were we, the audience from the front row of our corporate desks and couches at home, unwitting participants in a complete farce designed to score points on both sides of the aisle while garnishing no new information nor change in behavior on the part of the perpetrators.
Markets are quite telling in this case. On Tuesday, Standard & Poor downgraded the status of the Greek Bond market to "junk" on the news among other factors that the debt was at least 115% of the country's GDP. This effectively sent ripples throughout the European markets, Asian Markets, and Western markets to the tune of a 200+ point drop in the Dow, settling well under 11,000 which we haven't seen since mid-March. Meanwhile, G.Sachs is on the hill, being pestered by politicians like the goon on a Scooby Doo episode, questionable action after questionable action, highly sensitive email one after another, and how does the market, the big boys investors treat G.Sachs stocks? How about active trading consistent with the previous week resulting in a .66% or $1.01 INCREASE??
Analysis is varied as the individual so let me tell you what this means to me. Big boy investors have sent a clear message to DC: G.Sachs remains unscathed by your diatribe, G.Sachs is bigger than you will ever realise, and if you dare penalize in anything more than a symbollic way, your support is officially Gone With The Wind. Score? Government 0 - G.Sachs $153.04 per share. The boys did their job well. Traders under fire spoke a language somewhere between Aramaic and Bill Clinton-ese "...that depends on how you define success..." Mid-level management offered little more, and the CEO of the ship all but told Congress this is as much if not more your fault than mine. We only took the $2.5B because you bailed out AIG. There's no law requiring us to disclose position...and so on.
G.Sachs may still feel a pinch down the road. For now, they appear to have successfully navigated the rough and the hazards to come in comfortably at one under par.
LL
