Monday, August 22, 2011
"Nobody lawyers up like this unless they are in deep shit" - my anonymous Wall Street source
There's no honor among thieves and when rats are trapped in the corner, they fight back. Lloyd Blankfein just removed from "services available" one of the best DC-insider-connected defense attorneys, indicating some real shit could be hitting the fan at Goldman Sachs. This particular lawyer - who must be a serious piece of work if he's willing to prostitute his services defending servants of the devil - worked out deals for some real beauts: Bernie Ebbers of WorldCom, Enron's chief accountant and Roman Polanski. The speculation ranges from Justice Department inquiries into Goldman's highly fraudulent role in the mortgage market meltdown to likelihood that Blankfein and Goldman are both under heavy legal siege on both the civil and criminal fronts. Goldman stock plunged another 2.5% after the close, when that news report was released (conveniently) and is down roughly 40% year-to-date.
Not only that, but an analyst report on Bank of America was circulated today that speculated that BAC needs to raise $40-50 billion in capital to remain solvent. If that report has merit, it will be interesting to see how BAC pulls that off because it's current market cap is around $65 billion. Short of Obama borrowing from Michelle's travel fund and using Taxpayer largess to fund BAC, I don't see smart money lending that kind of jake to BAC unless it were on a "super" senior secured DIP basis - Debtor-In-Possession bankruptcy financing.
The above two events are marquee indicators of the disaster coming our way from the financial system...
Posted by Dave in Denver at 2:57 PM