Goldman, Sachs & Co. urged some of its big clients to place investment bets against California bonds this year despite having collected millions of dollars in fees to help the state sell some of those same bonds. Full Story »
Posted by Kaizar Campwala
For me this is a difficult story to track. Apparently, Goldman Sachs helps California sell bonds and then tries to sell municipal swaps that would pay face value of the bonds if California defaulted. That is neither illegal nor unethical providing a wall separates the parts of the company selling bonds and selling swaps. Moreover, the effect of swaps on bond prices and ultimately interest is indirect at best and it is difficult to determine whether it is positive or negative. In any event Goldman Sachs has been unsuccessful in making a market of municipal swaps, the treasurer of California isn't concerned but an expert is surprised that Goldman Sachs would do such a thing which on the surface is selling something then urging ... More »
The story seems to be good investigative journalism. This is a report of ethically challenged actions out of Goldman Sachs.
These actions are out of the firm that is the corporate home town for all the treasury secretaries and presidential advisers and Fed Reserve officials? What does this say about the ethics of that social group?
“States are going to have to cut back on education, social services, a whole range of things because of the lack of credit. This is not just a Wall Street thing. This ... More »
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