Quote of the Day

I wish to quote a paragraph I recently read in an article written in the Wall Street Journal.

“Goldman Sachs Group Inc. pumped up leverage by the largest degree in recent years. Goldman says it was just trying to catch up to the levels of its competitors after it shifted from a partnership to a public corporation. Its ratio of assets to shareholders’ equity, one common measure of borrowing, climbed to 25.2 to 1 in 2006, from 17.7 to 1 in 2002, according to analyst Brad Hintz of Sanford Bernstein. Goldman says it has a pool of easy-to-sell securities valued at more than $50 billion that it could tap if market conditions require it to raise cash”. (emphasis ours)

Talk about “The Great Unwind”. It seems that the ‘Big Boys’ are ready to bail themselves out at the expense of the individual investor.

The article hosted by GATA can be found here.


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