Berkshire Is Now Goldman's Loan Shark
I think the news that Berkshire Hathaway is investing in Goldman Sachs is being misinterpreted. If I was allowed to short Goldman I would be doing it now as it is at $137 on the news. Berkshire Hathaway did not buy common stock. That would have been a vote of confidence. They bought preferred stock. Berkshire Hathaway is lending Goldman Sachs money at 10%. In addition, they are receiving in the money call options on 5 billion in stock. The price Goldman is paying is probably closer to 14%. Whys does Goldman need to pay 14% for capital? Why are they selling an additional 2.5 billion in common. Just last week they said everything was good. This is proof positive that all is not well. I also tried to short SPY but couldn't get a borrow. Just bought SDS, which is the UltraShort S&P.