9 april 2010

WSJ: Goldman Sachs verdoemt Griekenland

In Market Beat van de Wall Steert Journal worden driftig geruchten rond gestrooid dat Goldman Sachs zo veel mogelijk proetectie tegen een default van griekenland heeft gekocht/aan het kopen is.
By Matt Phillips
Goldman Sachs shares have been on a tear lately. They’re up 8.3% this year, 15% since the end of February and 6% so far this week, after leapfrogging their 200-day moving average on Monday. What’s behind the action?

Rochdale securities analysts Dick Bove says investors have been laying bets on Goldman based on the belief that the company has been snapping up credit default swaps that would pay out in the event of a default of the Hellenic Republic. Brendan Conway of Dow Jones writes:

On Wednesday, Rochdale Securities stock analyst Dick Bove suggested that Goldman may actually end up one of the big beneficiaries if bad turns to worse in Greece.
In a note to clients, the analyst wrote that buyers of Goldman shares Wednesday were acting on the belief that the company has been “aggressively” buying Greek credit default swaps, which have climbed in value as fears over Greece’s financial position worsen. Bove said investors believe the company could make a big profit on those contracts. Goldman’s stock rose 2% to $176.36 Wednesday without an obvious driver.
Goldman spokesman Michael DuVally said the company “has bought some credit protection, but we are exposed to loss in the event that Greece’s credit worthiness deteriorates.” He declined further comment on Bove’s assessment.
This issue really goes to the heart of Goldman’s public relations challenges at the moment. The pitchfork wielding citizenry sees the fact that Goldman takes positions that are at odds with products it sells as evidence of duplicity. The firm sees it as responsible hedging. And according to Bove, investors see the prospect of Goldman betting big on a Greek default as a potential windfall.

DuVally’s comments seem to suggest that it won’t. But even if Goldman did reap a windfall from a Greek default, it would be hard for the firm — which is famous for touting its dedication to clients — to spin that one prettily, seeing as Goldman has been an important banker for the fiscally challenged nation.

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