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The bank always wins. True in Las Vegas, true in New York. [edit=elaboration] I really wonder who buys bonds from a bank when all of this is true: a) I can on
by DoubleMalt 14y ago
The bank always wins. True in Las Vegas, true in New York.
[edit=elaboration]
I really wonder who buys bonds from a bank when all of this is true:
a) I can only make profit when the bank loses
b) The bank's analyst predicts that I willmake profit
There are only two possibilities:
1) The bank does not know how to earn money
2) The bank tries to screw you over
As Goldman Sachs has a pretty good track record at making money, 1) is bloody unlikely.
- adaml_623 14y agoIf you do your research then you will find that medium to large public bodies are especially good at getting ripped off buying these bonds. Usually your local education board or city council (A) has some money to invest or some income to smooth out. 1. They talk to financial advisors (B) who give advice. 2. The advisors get commissions if they sell certain types of products. 3. The inexperienced financial staff in A believe the advice given by B. 4. The taxpayer shoulders the risk.
- DoubleMalt 14y agoOne more reason not to put money in the hands of politicians. People that lose their own money on these scams can't expect sympathy for being greedy from me.
- Judson 14y agoAs fmstephe[0] pointed out earlier, Goldman makes their money by orchestrating the sale of these bonds. The performance of the derivative has no impact on their profit from this deal. [0]: http://news.ycombinator.com/item?id=5133766 http://news.ycombinator.com/item?id=5133766