The Smartest Guys in the Room
Goldman Sachs' strategists by all accounts are considered 'The Smartest guys on the Street'... About 1 yr. and half ago, Goldman Sachs - affectionately called Goldman Sucks - opined that copper was headed for a seven-year-long bear market cycle, slashing its medium to long-term targets... "It is, in our view, highly likely that the four-year trend decline in copper prices is set to continue through at least 2018,". (Source CNBC). Another heavy hitter, Deutsche Bank - lovingly called the Douche Bank - was also very bearish on copper during that time due to possible slowdown in China,. Both were completely wrong in their forecasts as cooper has been red hot running with the bull since Oct. 2016...However, Goldman's chairman Lloyd Blankfein has said they are going God's work, and has been anointed by some as God's banker. Why are they so smart? well, the SEC had alleged that Goldman Sachs in 2007 structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short position against the CDO. In essence, Goldman's sell-side people (those that sell securities) promoted CDO and took short positions against their own products during the height of the US sub-prime mortgage melt-down. As for their bearish call on copper, in late 2016, the counter bullish bets by hedge funds on copper futures rose to highest in CFTC data going back to 2006. So, Goldman might be doing it again. As for the Deutsche Bank, in Oct. 2016 they were charged and settled the charge for rigging the gold market by turning "state evidence" against other banks. 2016 is shaping up as the year when countless conspiracy theories will be confirmed to be non-conspiracy fact: from central bank rigging of capital markets, to political rigging of elections, to media rigging of public sentiment, and now, commercial bank rigging of both silver and gold. In short, "tinfoil hat-wearing nut jobs living in their parents basement" were right all along. (source Zero Hedge)