Jim O' Neill, head of Asset Management at Goldman Sachs, yesterday applauded the decision of the Swiss authorities to keep the franc at 1,20 against the euro. O'Neil himself, famous for inventing the BRIC basket in 2002, anticipating the explosion of emerging countries, defined the level reached by the Swiss currency as "frankly ridiculous".
The fundamentals seem to prove him right: the OECD purchasing power index indicates a 40,5% overvaluation of the franc against the common European currency. But Jim O'Neill failed to notice that the speculative run on the Swiss franc is partly the result of advice from Goldman Sachs itself.
It is enough to re-read the famous report by Alan Brazil, another first-rate strategist of the bank's team, distributed to VIP customers on August 16 to find the warm advice to buy the "EurChf One-touch Put option" security, a synthetic that allows maximize profits by selling euros against francs up to the goal of one-for-one parity. An operation which, in the short term, has undoubtedly allowed considerable gains to a few hedge funds.
In this case, in short, the Chinese walls between the head of Asset Management” and the research (up to a year ago directed by O'Neill himself) worked properly. In the face of those who pointed out that Brazil, in its New York office, has an office right next to the GS brokers.
