Scumbag Bank Bets Against Solvency of States
Conde Nast Portfolio sneers at the idea that Goldman Sachs is betting against the solvency of state governments ("The Goldman Munipal Conflict Non-Story Refuses to Die"). It says of a "silly" ProPublica article, "The worst bit about the second article, however, was the headline: 'Goldman Sachs Sells New Jersey Bonds, Then Warns of Default.' Nothing in the article suggests that Goldman actually did warn of default; instead, it simply opined that CDS spreads on the bonds in question were likely to rise. ProPublica, here, is suggesting that Goldman thinks New Jersey might default; I don't think Goldman ever thought that."
Bloomberg News reports that Goldman Sachs recommended "that investors purchase credit-default swaps to bet against 11 states' debt," including that of New Jersey. Experts call the practice "once unheard of on bonds considered safe enough for retirees" and "distasteful."
This item is just meant to remind you that financial institutions, including those who have not yet lined up for a treasury payoff, and their enthusiasts are not necessarily on your side. As if you needed a reminder.
Get the This Week's Top Stories Newsletter
Every week we collect the latest news, music and arts stories — along with film and food reviews and the best things to do this week — so that you'll never miss Village Voice's biggest stories.