Re: Why will the dollar rally?
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goldman may have alot of exposure in terms of level 3 assets but they hedged that with bets against subprime. Equity drop,s profit increase to be put right back into equity. Smart people always step out of the way to avoid the falling safe.
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so only one company out of the group has smart people? if they are smart, they should short their own stock. they are going to get smashed.
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it may be that only goldman was quick enough to jump in, or had risk managers that saw it coming, or it could be that other firms have done similar things and only goldman's is reported.
but overall, goldman is very safe. i do think it hilarious that the "level III asset" thing is spoken as if goldman is in danger of bankruptcy lol. oh noes, they has 2:1 level III asset exposure : equity base. they be in the toilet haha.
even if the value of the level III assets fell towards 0, goldman has so many hedges in place that they'd likely only net lose a few billion.
and goldman also recently got the fees as the main underwriter for alibaba. yea, goldman is in serious trouble.
note that shorting the stock may not be a bad play. but betting against goldman's ability to produce positive earnings in this environment is [img]/images/graemlins/wink.gif[/img]
Barron
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