Goldman Sachs Shorts Goldman Stock, Offsets Losses

Posted on May 1, 2010

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EP: NYC – Goldman Sachs remains at the forefront of financial alchemy by establishing a system whereby it is impossible for the company to lose money. “We have always been innovators in the field of finance” said Goldman CEO LLoyd Blankfein, “but when some of my top guys came to me with this one, I was really impressed.” Under the trading scheme, Goldman Sachs will short its own stock. This means as the company deals with troubling allegations of fraud and financial malfeasance, it will continue to bet against itself, canceling out any losses on its balance sheet related to its falling stock value. The trades are executed by borrowing from the Federal Reserve at no interest. Jim Johnson, a trader for Goldman, informed reporters that “on a conference call with employees this morning, Mr. Blankfein assured everyone our bonuses will be intact.”

Larry Summers, economic adviser to the President, smiles after reporters ask whether he will join the board of Goldman Sachs after leaving the Obama administration.

Economic adviser to the President and former Treasury Secretary Lawrence Summers recognized that voters could be upset by the approach, but assured them that “this is how the market works to correct itself and people have nothing to worry about.” He added “Look, we live in a free market economy so we cannot stifle innovation based on some sort of populist outrage. If you do not like what Goldman is doing, then basically you hate freedom and are no better than the terrorists.”

In an effort to appease critics, Goldman Sachs has limited the use of the “shorting our own stock” strategy to Goldman Sachs executives.

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Posted in: Business