Creating trust and tea leaf reading

This morning, it looked as if the indices were all topping. This afternoon, there does look like the beginning of  a downturn- whether a real downturn, or just another waver on the trend remains to be seen. My Allied-Irish Bank is further down the drain (glug, glug) whereas somebody may have started to buy back Bankers Community Trust in earnest.

To-day's reports confirmed that US unemployment figures remain grim: 9.4% in spite of a flutter early in the week about private employment numbers improving.  I see that there is widespread disenchantment with investing in China because Chinese figures are "unreliable", and it does seem that there is a good deal of underhanded wheeling and dealing there..

 On the other hand, Bloomberg had a review article to-day about Goldman's $1.5 billion Facebook  stock offer to clients, as an illustration of its "potential conflict of interest" in the face of news that Goldman did not promise not to sell its own $375 of Facebook holdings without warning the clients to whom it is selling this stock. After all, the clients are wealthy and sophisticated.

This summoned up the story how Goldman got sued for selling its mortgage bonds to investors in 2007 while its hedge fund went short at the same time. They justified this by claiming their investors had been among the "most sophisticated mortgage investors in the world" (therefore capable of making their own decisions) Actually, I think you could say the figures were unreliable.

Michael Farr, president and founder of Washington-based Farr, Miller, & Washington, LLC told Bloomberg, "Having an obligation to your shareholders as an investment bank to remain profitable means you're going to be making money off your clients, and so there is an inherent conflict." A very funny footnote to the whole matter is that in response to its legal challenge, Goldman set up a committee! Yes, a "business standards committee" to "reinforce  client focus" and "improve upon transparency of our activities". Improve upon transparency means going from completely opaque to just a little murky, maybe.