Goldman and Volcanoes

* Goldman under fire from SEC for selling CDO;s without disclosing who structured it - in this case the -now famous hedgefundmanager John Paulson.
Politics, politics,,, well, so what else is new?
Question is whether this really holds water.
Alledgedly Goldman invested alongside it and lost 90m Usd on it - excluding their 15m Usd fee.
Legally Goldman was not obliged to disclose John Paulson in the offering . End of story.
From a populistic and political point of view, however, Goldman might still be viewed as guilty.
In any case, this means the door is open for more financial regulation.

* The Volcano impact
Well, apart from threatening to lower European GDP and world trade ditto plus some heavy impacts on certain industries and business models, it seems certain to generate the favourite European political answer to any economic problem these days; yet more subsidies.
Its interesting to note that so far sovereign debt within the OECD equals 50% of OECD savings and global sovereign debt equals 25% of global savings,,,, Higher yields, anyone?

It would be interesting to hear the riskmanagementplan from various countries, on how to handle the tremendous sovereign leverage currently at hand. Politicians in Brussels may well believe they are in the process of saving the Euro area, but there is an unquantified risk that may very well be substantial, that they actually are in the process of sinking it instead.

With the sovereign debt mountain growing and growing, perhaps it would just be prudent if a Volcano popped the bubble in time. The Icelandic bigger sister Volcano Katla, might just do this, if it too comes to life. Unfortunately, we might now be beyond the point of control due to the leverage situation. Hence, the fall out (pardon the punt) could be very scary indeed. Til then, low rates means low volatility and a continuation of already inflated assetprices. And then?



*Positions
- After having pushed through 1,3530, theres been some noice. Given the background macro scenario and the fact that we pushed below 1,3530 again, I am now short Eur/Usd, looking for 1,30.

- After Equities pushed through on the topside, I went long. I have now reversed to short. Looking for 2-5% retracement in this current low volatility environment.


- Short European airlines via options

- Short GLD ETF via options

- Short Oil via long SOIL ETF



As usual, good luck









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