But that’s nothing compared to what they did to everyone else. In the seamy world of Wall Steet finance, Goldman Sachs now sits at the top of the heap.
Suddenly we find out today that Goldman Sachs execs dumped nearly $700 million in stock at the height of the financial crisis panic. What would that do to a stock? It would drive the price down. Spooked investors would follow suit when they saw what was happening. It doesn’t take much to scare off a trader. Funny though, Yahoo finance doesn’t show those kinds of transactions. Maybe I’m looking in the wrong place.
At the same time, Goldman Sachs was shorting other stocks-including sub-prime funds. That’s right, somehow GS knew that this was about to hit the fan and they cashed in big time. In fact, protests were lodged against Goldman Sachs for engaging in naked short selling. Basically, short selling is betting that a stock will go down in price. You don’t actually own the stock; you are agreeing to buy to “cover” at a later date. If the price of stock drops, you buy to cover. You don’t actually buy the stock. You pay what the stock is worth at that moment. The profit is between what you originally shorted at, and the current, lower price. Naked short selling is using this technique with no money to back it up. Of course, if the stock rises in price, you’re screwed.
But they didn’t rise for Goldman Sachs. They tanked, and tanked big time. So while GS was raking in the dough from short sales, effectively eviscerating the competition, they were temporarily tanking their own stock, which prompted GS alum and then Treasury Secretary Hank Paulsen to hand them $10 billion of our money. After Goldman Sachs’ Wall Street competition had either succumbed, or been swallowed up, the stock took off like a rocket. In the meantime, scores of investors were wiped out.
Could this whole financial meltdown been avoided? Was it all orchestrated? You tell me. Was Paulsen in on some kind of scheme? We don’t know what went on behind the scenes. We only see the public info. Sometimes though, a little slime oozes out the boiler room door.
