Tag Archives: Goldman Sachs

Joe Biden’s (Don’t) Caring Economy, by David Stockman

Posted on October 25, 2021 | Leave a comment

There will always be income disparities in a purely capitalistic economy. There will always be much greater disparities in a mixed, crony socialist, fake money economy. From David Stockman at David Stockman’s Contra Corner via lewrockwell.com:

Nothing speaks to Joe Biden’s don’t “caring economy” better than the recently released “Wage Statistics for 2020” report by the Social Security Administration.

As it happened, 21.3 million Americans employed last year (out of 167.6 million total) earned less than $5,000 during the entire year and, in fact, an average of only $2,127. And those numbers are damn accurate because they come from Uncle Sam’s tax collection division, which does not under-count.

As it also happened, Goldman Sachs announced that it awarded its top two executives, CEO David Solomon and president John Waldron, one-time stock bonuses of $30 million and $20 million, respectively, designed to keep the executives at the helm of Wall Street’s biggest bank for another five years. And alas, these are their bonus amounts at the current stock price. As the Wall Street Journal further explained,

If the bank were to hit the top targets, Mr. Solomon’s bonus would be worth more than $50 million and Mr. Waldron’s would be worth more than $35 million.

Let’s see. At the top-tick, those Goldman bonuses would equal the annual earnings of 40,000 of the above mentioned wage workers!

And, oh, exactly what is the scale of 40,000 workers lined up check-by jowl?

Well, back in the day, your editor represented about 450,000 people in the Fourth Congressional District of Michigan including men, woman, children, criminals, the infirm and Democrats. So these two cats from Goldman are getting a bonus equal to about what would have been one-tenth of a congressional district. That is to say, “bonus” is a word hardly adequate to the task.

To be clear, we don’t begrudge capitalism’s verdicts and its implicit choices of winners and losers. That’s why it works and is the only route to more prosperity, opportunity and choices for everyone. But we do begrudge state policy that drastically distorts and exacerbates the natural outcomes of the market because its just plain unjust; and, in any event, is unsustainable and prone to disastrous outcomes.

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Goldman Warns If The Short Squeeze Continues, The Entire Market Could Crash, by Tyler Durden

Posted on January 31, 2021 | Leave a comment

Goldman Sachs doesn’t like rigged markets if their not the ones doing the rigging. From Tyler Durden at zerohedge.com:

Last Friday (Jan 22) we advised readers who thought they had missed the move in Gamestop (they hadn’t), to position appropriately in the most shorted Russell 3000 names which included such tickers as FIZZ, DDS, BBBY, AMCX, GOGO and a handful of other names, as it was likely that the short-squeeze was only just starting.

We were right and all of the stocks listed above – and others – exploded higher the coming Monday, and all other days of the week, with results – encapsulated by the WallStreetTips vs Wall Street feud – that have become the only topic of conversation across America (remember the Trump impeachment?), while on WSB the only topic has been the phenomenal gains generated by going long said most shorted stocks. To wit, the basket of top shorts we compiled on Jan 22 has tripled in the past week.

And while some are quick to blame last week’s fireworks on the “dopamine rush” of traders at r/wallstreetbets who seek an outlet to being “copped up with little else to do during the pandemic” (as Bloomberg has done, while also blaming widespread lockdowns and forgetting that it has been Bloomberg that was among the most vocal defenders of the very lockdowns that have given us the short squeeze of the century), the reality is that at the end of the day the strategy unleashed by the subreddit is merely an extension of the bubble dynamics that were made possible by the Federal Reserve (of which Bloomberg is also a very staunch fan) pumping trillions and trillions of shotgunned liquidity into a financial system where there are now bubble visible anywhere one looks. In short, main street finally learned that it too can profit from the lunacy of the money printers at the Marriner Eccles building, and some are very unhappy about that (yes, it will end in tears, but – newsflash – $300 trillion in debt and $120BN in liquidity injections monthly will also end in tears).

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The Malaysian Job, by Andrew Cockburn

Posted on April 25, 2020 | 1 comment

Goldman Sachs does what it can get away with, or what it can use its influence and money to get those charged with enforcing laws and regulations to overlook. From Andrew Cockburn (h/t SLL reader ursel doran) at harpers.org:

This past January, Goldman Sachs CEO and chairman David Solomon strode onto a stage at the bank’s lower Manhattan headquarters to launch the first “Investor Day” in the famously secretive institution’s one-hundred-and-fifty-year history. The celebration was promoted as an inspiring review of Goldman’s “strategic road map and goals,” and the presentations were replete with pledges of “transparency” and “sustainability,” though the overall performance was unkindly summarized by bank analyst Christopher Whalen as “investment bankster BS.” Early in his opening address, Solomon expounded the “core values” of the firm he had headed since October 2018. After “Partnership” and “Client Service” came “Integrity.” Solomon stressed that he was “laser-focused” on this last term, emphasizing that the company “must always have an unrelenting commitment to doing the right thing, always.” There followed, however, a glancing reference to a singular black cloud hovering over the proceedings. “In the wake of our experience with Malaysia,” he said, “I am keenly aware of how the actions of a few can harm our reputation, our brand, and our performance as a firm.” With that brief mention, he moved on to a fourth core Goldman value: “Excellence.”

Everyone in the room had recognized the allusion. “Malaysia” was shorthand for a gigantic fraud—possibly the largest in financial history—in which, beginning in 2009, billions of dollars were diverted from a Malaysian sovereign-wealth fund called 1Malaysia Development Berhad (1MDB) into covert campaign-finance accounts, U.S. political campaigns, Hollywood movies, and the pockets of innumerable other recipients. The “few” Solomon referred to were those Goldman executives whose active participation in the scam’s bribery and money laundering had since become undeniable.

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Explosive WSJ Report Exposes China’s Role In 1MDB Scandal, by Tyler Durden

Posted on January 8, 2019 | Leave a comment

The Malaysian investment fund scandal gets stinkier and stinkier. From Tyler Durden at zerohedge.com:

In the waning months of his administration, Malaysian Prime Minister Najib Razak was desperate to stave off the bankruptcy of1MDB, the sovereign wealth fund that Razak and members of his inner circle looted (allegedly with the help of Goldman Sachs). So, he turned to an unlikely source of funding to bail out the fund – signing away rights to some of his country’s most valuable resources in the process.

The source? China. Employing financier Jho Low as an intermediary, Razak worked out an arrangement with the Chinese government whereby Razak’s government would grant state-owned Chinese enterprises lucrative stakes in Malaysian railway and pipelines projects in exchange for $34 billion – more than enough to clear the shortfall in 1MDB, and then some.

By 2016, Mr. Najib was in a bind because the fund had borrowed $13 billion it couldn’t repay. He turned to Jho Low—a Malaysian financier the U.S. Justice Department has alleged was the mastermind of a multibillion-dollar theft of 1MDB funds—to negotiate with China to resolve the crisis, according to current and former Malaysian officials.

According to a report in the Wall Street Journal, Razak offered the Chinese an invaluable cherry on top of the sweetheart deal. Permission to dock Chinese Navy ships in two Malaysian ports – a “significant concession” that would push Malaysia undeniably into the orbit of Beijing.

Mr. Najib also embarked on secret talks with China’s leadership to let Chinese navy ships dock at two Malaysian ports, say two people familiar with the discussions. Such permission would have been a significant concession to Beijing, which seeks greater influence across contested waters of the South China Sea, but it didn’t come to pass.

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Hallelujah! The Goldman Sachs Regency At The White House Is Finally Over, by David Stockman

Posted on March 8, 2018 | Leave a comment

Why would think an emissary from America’s preeminent financial firm would recommend any policies but those that furthered financialization and rewarded its crony acolytes? From David Stockman at davidstockmanscontracorner.com:

The financial commentariat and the robo-machines are all in a tizzy this morning because Gary Cohn up and quit. But we say good riddance: The man gave Trump bad advice on nearly every single issue—trade, taxes, fiscal policy and the Fed.

We didn’t make any bones about that viewpoint during our appearance on Fox Business this AM. When Maria Bartiromo asked us about Cohn’s departure, our reply was: Hallelujah, the Goldman Sachs Regency in the White House is finally over!

The fact is, we do have a trade crisis, but Gary Cohn and the Wall Street pseudo-free traders don’t care and never have. That’s because they fiercely support a perverted, self-serving monetary regime that systematically and massively inflates financial assets, even as it strip mines and deflates the main street economy.

As we have been pointing out in this series, there is a perverse symbiosis between the Fed and the Dirty Float central banks of the 10 major countries (China, Vietnam, Mexico, Japan, etc), which account for 90% of the nation’s $810 billion trade deficit (2017). Together they have ripped the guts out of the US industrial economy—effectively sending jobs and production abroad and cash flow and liquidated capital to Wall Street.

For its part, the Fed has monkey-hammered US competitiveness. That’s the result of its insensible 2.00% inflation policy, which has fatally inflated nominal dollar wages in a world market drowning in cheap labor priced in artificially under-valued currencies.

At the same time, its massive interest rate repression and price-keeping operations in the stock market have turned the C-suites of corporate America into financial engineering joints. So doing, they have slashed real net business investment by nearly 3o% since the turn of the century, by 20% from the 2007 pre-crisis peak and, actually, to a level in 2016 that barely exceeded real net investment two decades earlier in 1997.

To continue reading: Hallelujah! The Goldman Sachs Regency At The White House Is Finally Over

 

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Government by Goldman, by Gary Rivlin and Michael Hudson

Posted on September 19, 2017 | Leave a comment

Well which is it: is the government being run by the military, or by Goldman Sachs, or a combination of the two? From Gary Rivlin and Michael Hudson at the intercept.com: [warning: this is a very long article]

STEVE BANNON was in the room the day Donald Trump first fell for Gary Cohn. So were Reince Priebus, Jared Kushner, and Trump’s pick for secretary of Treasury, Steve Mnuchin. It was the end of November, three weeks after Trump’s improbable victory, and Cohn, then still the president of Goldman Sachs, was at Trump Tower presumably at the invitation of Kushner, with whom he was friendly. Cohn was there to offer his views about jobs and the economy. But, like the man he was there to meet, he was at heart a salesman.

On the campaign trail, Trump had spoken often about the importance of investing in infrastructure. Yet the president-elect had apparently failed to appreciate that the government would need to come up with hundreds of billions of dollars to fund his plans. Cohn, brash and bold, wired to attack any moneymaking opportunity, pitched a fix that would put Wall Street firms at the center: Private-industry partners could help infrastructure get fixed, saving the federal government from going deeper into debt. The way the moment was captured by the New York Times, among other publications, Trump was dumbfounded. “Is this true?” he asked. Was a trillion-dollar infrastructure plan likely to increase the deficit by a trillion dollars? Confronted by nodding heads, an unhappy president-elect said, “Why did I have to wait to have this guy tell me?”

Within two weeks, the transition team announced that Cohn would take over as director of the president’s National Economic Council.

 To continue reading: Government by Goldman

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Even Trump Can’t Make Goldman Sachs Popular, by Ann Coulter

Posted on June 30, 2017 | Leave a comment

Nothing says “Establishment” quite like Goldman Sachs. Surely there must be people out there who can do as well as or better a job than the former Goldman Sach’s officials Trump has put in his administration. The optics that political types like to talk about are terrible. From Ann Coulter at anncoulter.com:

Having pulled off the monumental achievement of getting elected with zero help from Wall Street, President Trump is at risk of throwing it all away. He seems to be turning his White House over not only to liberal Democrats, but to the very type of liberal Democrats he railed against on the campaign trail.

It’s like voluntarily getting an AIDS transfusion.

Until Trump, voters had two choices: A Republican beholden to Wall Street or a Democrat beholden to Wall Street.

But Wall Street despised Trump, and he despised them. This allowed him the luxury of denouncing both Ted Cruz and Hillary Clinton for their ties to Goldman Sachs, especially Hillary’s six-figure “speeches” to that investment bank.

Ninety percent of Wall Street’s money went to Hillary’s campaign. Wherever the other 10 percent went, it didn’t go to Trump.

What does that mean?

[Fox News’ Sean Hannity frantically waving his hand]: I know! I know! Since he owes them nothing and they’re universally reviled, he needs to turn the keys of the kingdom over to Wall Street bankers!

No, actually. It means that he should stay the hell away from them.

The Democrats, who are evil but not stupid, know what a gift it was for Trump to have had no Wall Street support. And they are already plotting to win Trump’s voters back.

A hand grenade has recently been tossed into Trump’s camp in the form of Stanley Greenberg’s mostly-overlooked report for Democracy Corps. Greenberg, the Yale professor-turned-Democratic pollster, has conducted extensive, in-depth interviews with the beating heart of Trump’s working-class support: the voters of Macomb County, Michigan, which went for Obama twice, but then flipped to Trump.

They were impossible to move. They love Trump, have no regrets about their vote, disbelieve the media and detest career politicians like Paul Ryan and Mitch McConnell. They just “pray he keeps his promises and succeeds.”

 

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A Tale of Two Justice Systems – Wall Street vs. Main Street, by Michael Krieger

Posted on May 11, 2017 | 4 comments

Hold up a liquor store; go to prison, probably for a long time. Hold up the US banking system; make gobs of money until the system blows up, then get bailed out by the government and go back to making gobs of money. It only seems unfair because it is. From Michael Krieger at libertyblitzkrieg.com:

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.

– Charles Dickens, A Tale of Two Cities

One of the major objectives of this site over the years has been to highlight the demoralizing and extremely destructive reality that two completely different justices systems exist in America — one for the wealthy, powerful and connected, and another for everyone else. While there will always be some element of this in any society of humans, extremes can and do occur, and the pendulum now has shifted in these United States to extremely dangerous Banana Republic-like levels.

Nowhere is this divergence of justice more in your face and deplorable than with respect to how Wall Street financiers are treated compared to the rest of us. Not only was the industry rewarded with endless financial lifelines and zero executive prosecutions after it destroyed the global economy, but the industry continues to do whatever it wants, whenever it wants, with zero repercussions. It doesn’t take genius to understand that if there’s no risk in committing financial crimes, you get a lot more of them.

Speaking of Wall Street being able to do whatever it wants, let’s take a look at what Goldman Sachs is up to courtesy of some excerpts from a recent article by David Dayen published at The Fiscal Times:

Goldman Sachs is on a shopping spree. Last week, it spent $500 million to buy 12 percent of Riverstone Holdings, a private equity firm focused on energy investments. This is part of a $2 billion private equity strategy for the vampire squid. Through a couple of subsidiary funds, Goldman has already acquired stakes in private equity players Littlejohn & Co. and ArcLight Capital Partners, and  Accel-KKR, a firm specializing in tech companies.

To continue reading: A Tale of Two Justice Systems – Wall Street vs. Main Street

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Donald Trump Has a Goldman Sachs Problem: Derivatives, by Pam Martens and Russ Martens

Posted on February 1, 2017 | 1 comment

Because SLL remembers the last financial crisis, SLL harps on debt and derivatives, which tend to be ignored until they can be no longer. That the world’s toxic combination of debt and derivatives will eventually blow up in a crisis worse than the last crisis is a lead-pipe cinch. From PamMartens and Russ Martens at wallstreetonparade.com:

n the midst of being skewered across media outlets yesterday for his chaotic rollout of an Executive Order that appeared to target Muslims, including those legally living in the U.S. as businessmen, doctors, university faculty and students — who were initially denied reentry after travel abroad — President Donald Trump tried desperately to change the subject. Following a plunge of over 200 points in the Dow Jones Industrial Average yesterday, Trump pivoted to something he thought would please his financial backers on Wall Street. He called the Dodd-Frank financial reform legislation passed in 2010 by the Obama administration a “disaster” and promised to “do a big number” on it soon. The Dow closed down 122 points — now wary of Trump’s fire-ready-aim leadership on complex matters.

The legitimate fear across Wall Street right now is that Trump’s zero-vetting approach to rule-by-Executive-Order could leave Wall Street in the same chaotic state as the airports experienced from his ham-fisted approach to immigration.

But it’s not just Trump that Wall Street needs to fear: it’s Goldman Sachs as well. Trump has stuffed his administration with so many Goldman Sachs progeny that his administration is now regularly referred to as Government Sachs.

Goldman Sachs has a unique vested interest in repealing chunks of Dodd-Frank while making sure that the Glass-Steagall Act is not reinstated. That’s because when it comes to derivatives, Goldman Sachs is keeping a lot of secrets.

The Office of the Comptroller of the Currency (OCC) is the regulator of national banks. Each quarter it publishes a report on the derivative holdings of the biggest Wall Street banks and their holding companies. Its most recent report shows that as of September 30, 2016 Goldman Sachs Bank USA (a taxpayer-backstopped, FDIC insured bank where it holds its derivatives) had “credit exposure to risk-based capital” of 433 percent. That figure was more than double that of JPMorgan Chase (216 percent) and six times that of Bank of America (68 percent).

To continue reading: Donald Trump Has a Goldman Sachs Problem: Derivatives

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A Real Life “House of Cards” – The Most Striking WikiLeaks Revelations From The “Podesta Files,” by Tyler Durden

Posted on October 8, 2016 | 1 comment

Tyler Durden has helpfully sorted out the various revelations from the latest WikiLeaks’ email dump. From Durden at zerohedge.com:

They say that “life imitates art”…or is it the other way around…the lines are getting so blurred. In any event, we thought we would take this opportunity to highlight some of the most startling discoveries we found so far in Doug Stamper’s…sorry, John Podesta’s emails. You have to admit there are some similarities there and they even have the same position…hopefully the Clinton Foundation is receiving royalties from HBO…

Yesterday we pointed out the many amazing one-liners offered up by Hillary as she was out collecting millions of dollars for her “Wall Street speeches.” Here is an expanded sample:

Hillary Clinton: “I’m Kind Of Far Removed” From The Struggles Of The Middle Class “Because The Life I’ve Lived And The Economic, You Know, Fortunes That My Husband And I Now Enjoy.” “And I am not taking a position on any policy, but I do think there is a growing sense of anxiety and even anger in the country over the feeling that the game is rigged. And I never had that feeling when I was growing up. Never. I mean, were there really rich people, of course there were. My father loved to complain about big business and big government, but we had a solid middle class upbringing. We had good public schools. We had accessible health care. We had our little, you know, one-family house that, you know, he saved up his money, didn’t believe in mortgages. So I lived that. And now, obviously, I’m kind of far removed because the life I’ve lived and the economic, you know, fortunes that my husband and I now enjoy, but I haven’t forgotten it.” [Hillary Clinton Remarks at Goldman-Black Rock, 2/4/14]

Hillary Clinton said there Was “A Bias Against People Who Have Led Successful And/Or Complicated Lives,” Citing The Need To Divese Of Assets, Positions, And Stocks. “SECRETARY CLINTON: Yeah. Well, you know what Bob Rubin said about that. He said, you know, when he came to Washington, he had a fortune. And when he left Washington, he had a small — MR. BLANKFEIN: That’s how you have a small fortune, is you go to Washington. SECRETARY CLINTON: You go to Washington. Right. But, you know, part of the problem with the political situation, too, is that there is such a bias against people who have led successful and/or complicated lives. You know, the divestment of assets, the stripping of all kinds of positions, the sale of stocks. It just becomes very onerous and unnecessary.” [Goldman Sachs Builders And Innovators Summit, 10/29/13]

Hillary Clinton Noted President Clinton Had Spoken At The Same Goldman Summit Last Year, And Blankfein Joked “He Increased Our Budget.” “SECRETARY CLINTON: Well, first, thanks for having me here and giving me a chance to know a little bit more about the builders and the innovators who you’ve gathered. Some of you might have been here last year, and my husband was, I guess, in this very same position. And he came back and was just thrilled by— MR. BLANKFEIN: He increased our budget. SECRETARY CLINTON: Did he? MR. BLANKFEIN: Yes. That’s why we — SECRETARY CLINTON: Good. I think he—I think he encouraged you to grow it a little, too. But it really was a tremendous experience for him, so I’ve been looking forward to it and hope we have a chance to talk about a lot of things.” [Goldman Sachs Builders And Innovators Summit, 10/29/13]

To continue reading: A Real Life “House of Cards” – The Most Striking WikiLeaks Revelations From The “Podesta Files”

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