Goldman launches ICBC selldown of about $1 billion - source

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MikeBarnett wrote:

This proves that US banks are in deep trouble. Goldman is gathering cash, and it is selling profitable investments to raise that cash. The $2.5 billion of ICBC that Goldman sold in April of 2012 rose 18% in the nine months after the sale. Goldman could have earned another $450 million by holding the stock. In addition, Goldman offered the current stock sale at a 3% discount, automatically losing $30 million, at a time when China is financing construction of infrastructure for its central and western provinces as part of its 12th Five Year Plan. The Chinese government is offering guaranteed profits for its bank. What is wrong with the people at Goldman?

On the other hand, I have heard disturbing reports of banks having too many toxic assets after the financial crisis that began in 2008. I was told of oversold securities creating too much insurance and not enough assets to be insured. This would create huge amounts of worthless paper. Further, some economists have speculated that the US GDP may be one-half to three-fourths of its reported value, owing to these bogus securities, and that has explained the reluctance of US banks to lend when lending was needed to revive the US economy. The banks did not have the “real” money and did not want to reveal their shortages of funds. This could explain Goldman’s willingness to take heavy losses.

Jan 28, 2013 6:25pm EST  --  Report as abuse
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