GATH' AROUND…Stocks Fall, Treasurys, Dollar Rise, On SEC Goldman Charges

Categorized | goldman sachs, john paulson

GATH' AROUND…Stocks Fall, Treasurys, Dollar Rise, On SEC Goldman Charges

GATH' AROUND…Stocks Fall, Treasurys, Dollar Rise, On SEC Goldman Charges

Lets not act surprised…GS is going to turn into Butta’ all the wealth created is/was all an illusion…I bet “oil” is next…watch!

This might be the key that opens up Pandora’s Little Big Box! “John Paulson”

APRIL 16, 2010, 11:26 A.M. ET

Stocks Fall, Treasurys, Dollar Rise, On SEC Goldman Charges

By Michael J. Casey Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)–Stocks fell and Treasurys rose as news of Securities and Exchange Commission charges against Goldman Sachs Group Inc. (GS) sparked a flight out of risky assets.

The SEC said Goldman Sachs failed to disclose to investors vital information about a synthetic collateralized debt obligation, or CDO, based on subprime mortgage-backed securities–in particular the role played by a major hedge fund that had bet against the CDO. Subprime CDOs were at the heart of the recent financial crisis.

In response, investors moved into safe haven assets and out of riskier securities, buying Treasurys and the dollar, while selling stocks and commodities.

“The revival of risk aversion has benefited traditional safe-haven assets, like the dollar and the Japanese yen,” said Omer Esiner, senior market analyst at Travelex Global Business Payments in Washington.

Noting that the complaint is focused on a specific incident, he said the broad flight out of risk appeared to be a “knee-jerk reaction.”

Golmdan stock was down 12.45% to $161.33 on the news. The Dow Jones Industrial Average was down 86 points at 11057, while the 10-year Treasury note was up 17/32 to yield 3.778%. Gold futures, which have tended to rise with commodities and other risk assets over the past year, were down 1.4%, according the most active June contract.

The euro plummeted to $1.3486 from $1.3577 late Thursday, according to EBS via CQG, while the dollar fell to Y92.11 from Y93.04.

“That word ‘fraud’ is the key. When you throw that word fraud in there, all bets are off then,” said Jay Suskind, senior vice president of Duncan-Williams.

-By Michael Casey; Dow Jones Newswires; 212-416-2209; michael.j.casey@dowjones.com

 (Bradley Davis and Kristina Peterson contributed to this report.)

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