Tag Archives: Goldman Sachs

Goldman Sachs – Encouraging “Discussion”, Just Not About Trump, by Duane Norman

Posted on September 24, 2016 | Leave a comment

At Goldman Sachs, you can discuss approved political issues and donate to approved candidates. What could be more reasonable? From Duane Norman on a guest post at theburningplatform.com:

Unfortunately, we are living through a period where, in some places, our differences are driving divisiveness. Like everyone else, I watch the news, see the headlines and am impacted by the images of communities torn apart by violence and divided by distrust. The topic of race is on my mind, it’s a discussion I have with my family and friends and it’s something that I bring to work. Of course my experience, I know, is not unique. The pervasiveness of current events affects everyone at our firm from summer interns to senior leaders. I know this because at Goldman Sachs we’re starting to talk about it…

Source: Why Goldman Sachs is encouraging employees to talk about race at work | LinkedIn

The author of the above post, Edith Cooper, is the “Global Head of Human Capital Management at Goldman Sachs”, according to her LinkedIn bio. I’d be inclined to agree, that she is quite good at managing the human capital at Goldman, just not in any way that actually encourages discussion about anything besides firm “approved” topics.

Recently, Goldman Sachs barred donations to “certain” political campaigns, notably the Trump-Pence Presidential ticket. ZeroHedge covered this topic recently, and below is an excerpt from their article:

Goldman explains that “the policy change is also meant to minimize potential reputational damage caused by any false perception that the firm is attempting to circumvent pay-to-play rules, particularly given partners’ seniority and visibility,” adding that “all failures to pre-clear political activities as outlined below are taken seriously and violations may result in disciplinary action.”

Yet while the new policy would be perfectly reasonable if it was treated both political candidates equitably, it appears that there is a loophole: namely Clinton-Kaine.

Because as Forbes diligently reports, “the rules do not restrict donations to Clinton-Kaine. Kaine is a U.S. Senator for Virginia, and not considered a local official under Goldman’s rules. Although the memo does say that Goldman partners are no longer able to donate to the Virginia Democratic party, which could be a reference to Kaine. Lloyd Blankfein, Goldman’s CEO, has declined to say who he is supporting for president, but is known as a long-time Clinton supporter. Blankfein donated to Clinton when she ran against Obama is 2008.”

I didn’t buy this at first, feeling as though it could be exaggeration. So, I spoke to a friend of mine who works at the Goldman Sachs office in NYC; a Trump supporter, he will remain anonymous for obvious reasons. He informed me that not only does the memo apply to “all partners”, it applies to everyone at the firm, period.

He spoke of another colleague he knew of, who was recently terminated after the firm discovered he donated to Trump’s campaign. Though the firm conjured up an unrelated technicality to justify his termination, the implication was clear to all employees. He made sure to point out that this employee he mentioned was definitely NOT a partner, and that he knew employees who had donated to Hillary who were (obviously) not terminated.

To continue reading: Goldman Sachs – Encouraging “Discussion”, Just Not About Trump

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Goldman Sachs Just Launched Project Fear in Italy, by Don Quijones

Posted on September 9, 2016 | Leave a comment

Italy has a referendum on constitutional reform coming up that may be just as momentous as the Brexit vote. From Don Quijones at wolfstreet.com:

Things could get very ugly, very fast, if those bank bonds collapse.

Project Fear began two years ago in the run up to Scotland’s national referendum. It then spread to the rest of the UK in the lead up to this summer´s Brexit referendum. But it keeps on moving. Its latest destination is Italy, where the campaign to instill fear and trepidation in the hearts and souls of Italy’s voters was just inaugurated by the world’s most influential investment bank, Goldman Sachs.

It just released a 14-page report warning about the potentially dire consequences of a “no” vote in Italy’s upcoming referendum on the government’s proposed constitutional reforms. The reforms seek, among other things, to streamline Italy’s government process by dramatically restricting the powers of the senate, a major source of political gridlock, while also handing more power to the executive.

The polls in Italy are currently neck and neck, though the momentum belongs to the reform bill’s opponents.

If the Italian public vote against the bill, the response of the markets could be extremely negative, warns Goldman, putting in jeopardy the latest attempt to rescue Italy’s third largest and most insolvent bank, Monte dei Paschi di Siena. The rescue is being led by JP Morgan Chase and Italian lender Mediobanca, and includes the participation of a select group of global megabanks that are desperate to prevent contagion spreading from Italy’s banking system to other European markets, and beyond. They include Goldman Sachs [Big European Banks Try to Block Contagion from Italian Banking Crisis (Before it Sinks them)].

In the event of a “no” vote, MPS’ planned €5 billion capital increase would have to be put on ice, while investors wait for the political uncertainty to clear before pledging further funds. This being Italy, the wait could be interminable and the delay fatal for Monte dei Paschi and other Italian banks, Goldman warns. It also points out that Italy is the only European country where a substantial portion of its bank bonds are held in household portfolios (about 40% according to data from Moody’s, four times more than Germany and eight times more than France and Spain).

In other words, things could get very ugly, very fast, if those bank bonds collapse! As for Italian government bonds and Europe’s broader debt markets, they would be insulated from any fallout by former Goldmanite Mario Draghi’s bond binge buying.

Goldman’s report has one main purpose: intimidating Italy’s electorate into following the government — and EU — line. Failure to do so would be tantamount to economic suicide, since it would trigger the collapse of the banking system and the mass destruction of billions of euros of Italian household wealth.

That may well be what happens in the end, but it won’t be due to the voting preferences of Italy’s electorate, whatever Goldman may claim. After all, it’s not like investors are not already perfectly aware of the chronic weaknesses of Italian banks. Italian banking shares have crashed. Just as ominous, the Bank of Italy’s liabilities towards other Eurozone central banks rose to a record high of 326.95 billion euros in August, above levels not seen since the height of the euro sovereign debt crisis four years ago.

In other words, investors and depositors — both foreign and domestic — appear to be voting with their feet.

To continue reading: Goldman Sachs Just Launched Project Fear in Italy

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The Goldman Sachs Settlement Is an Abomination and Insult to All American Citizens, by Micheal Krieger

Posted on April 13, 2016 | Leave a comment

Rob a liquor store; go to prison. Commit financial fraud: reach a settlement with government; have your company write a check; get nicked on your bonus for a year or two; stay out of jail and remain an “esteemed member of the financial community.” From Michael Krieger at libertyblitzkrieg.com:

The increased use of eminent domain to transfer property to powerful political interests, the ramifications of the wars on terrorism and drugs, and the violation of the property rights of bondholders in the auto-bailout case have weakened the tradition of strong adherence to the rule of law in United States. We believe these factors have contributed to the sharp decline in the rating for the legal-system area.

To a large degree, the United States has experienced a significant move away from rule of law and toward a highly regulated, politicized, and heavily policed state.

– From the 2014 post: New Report – The United States’ Sharp Drop in Economic Freedom Since 2000 Driven by “Decline in Rule of Law”

The American public should be out in the streets by the hundreds of thousands demanding the resignation of President Barack Obama in response to the total sham settlement just announced by the U.S. government with Goldman Sachs. This farce should be seen for what it really is; a gigantic establishment middle finger waving contemptuously in the face of the reliably neutered and long-suffering American public.

A criminal financial organization that engaged in billions upon billions in fraud against the “muppet” public is once again getting off with barely a slap on the wrist and nobody’s going to do a thing about it. As I’ve said for years and years, until the public says enough is enough nothing is going to change. I suppose that’s simply not going to happen until the next economic downturn, which could emerge in earnest any day now.

David Dayan knows as much about this issue as anyone, and he just penned a scathing assessment of this perversion of justice at the New Republic. Here are a few excerpts from his piece, Why the Goldman Sachs Settlement Is a $5 Billion Sham:

This lack of accountability for Wall Street and the perception of a two-tiered justice system gnaws away at Americans’ trust. But now that the Goldman Sachs settlement Sanders referred to has been finalized, I’m sorry to say that he was wrong. If you are an executive on Wall Street who destroys the American economy, you don’t pay a $5 billion fine. You pay much, much less. In fact, you can make a credible case that Goldman won’t pay a fine at all. They will merely send a cut of profits from long-ago fraudulent activity to a shakedown artist, also known as U.S. law enforcement.

Goldman Sachs made far more than $2 billion on the sale of mortgage-backed securities, by the way. Check out this list from the settlement documents of all the securitizations they issued that are covered by the settlement; it comes to roughly 530 securitizations, each of which typically held $1 billion in loans. I wouldn’t insult Goldman’s money-earning prowess by suggesting it only made $2 billion in profit on $530 billion in mortgage-backed securities. So even if you think Goldman is paying some kind of penalty, at best it’s a cut of the profits.

To continue reading: The Goldman Sachs Settlement Is an Abomination and Insult to All American Citizens

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Goldman Sachs’ Rich Man’s Bank Backstopped by You and Me, by Pam Martens and Russ Martens

Posted on October 26, 2015 | 3 comments

One simple but very powerful fact has not changed at all since the last financial crisis: the government is on the hook for the banking industry’s liabilities. Note the staggering derivatives exposures in the following graph. Bankers say that these are gross, not net exposures. In other words, banks often match the sale of a derivative with the purchase of the same derivative, giving them a net exposure of zero until…until a counterparty goes bust, like AIG or Lehman Brothers did during that last crises. From Pam Martens and Russ Martens at wallstreetonparade.com:

OCC List of Banks by Assets Versus Notional Amounts of Derivatives, June 30, 2015

Just when you thought Wall Street’s heist of the U.S. financial system couldn’t get any crazier, along comes a regulator’s report on FDIC-insured banks exposure to derivatives. According to the Office of the Comptroller of the Currency (OCC), one of the regulators of national banks, as of June 30 of this year, Goldman Sachs Bank USA had $78 billion in deposits, and – wait for it – $45.7 trillion in notional amount of derivatives. (Notional means face amount of derivatives.) According to the OCC report, Goldman Sachs Bank USA’s notional derivatives are an eye-popping 563 percent of its risk-based capital. You and every other little guy in America are backstopping this bank because it’s, amazingly, FDIC insured.

Compared to its Wall Street peers, Goldman Sachs Bank USA is a midget. JPMorgan Chase Bank NA has just shy of $2 trillion in assets; Citibank NA (part of Citigroup) has $1.3 trillion; Bank of America NA $1.6 trillion. That compares with Goldman Sachs Bank USA, which just became an FDIC insured bank at the height of the financial crisis on November 28, 2008, which has a puny $122.68 billion in assets. But it wants to play with the big boys anyway when it comes to derivatives, as the chart above shows.

Based on the data, it looks like the average taxpayer is backstopping a ton of risk at this FDIC insured bank and getting very little in return. According to financial data from the FFIEC for the second quarter, the bank had $25.1 billion in trading assets and according to the company’s web site, it’s those high net worth clients of its Private Bank that it’s working with “to manage their cash flow needs, finance private asset purchases, and facilitate strategic investments.”

To continue reading: Goldman Sachs Rich Man’s Bank Backstopped by You and Me

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Goldman Calls It: No Rate Hike Until Mid-2016, by Tyler Durden

Posted on September 20, 2015 | Leave a comment

SLL claimed no special insight into the Federal Reserve’s decision making this past week (“Who Cares?” SLL, 9/16/15), but instead went with Goldman Sachs, who seems to have all sorts of special insight. Goldman got it right with its call, made back in June, that the Fed wouldn’t raise its federal funds target rate. Now Goldman is saying wait until next summer for a rate increase, if one comes at all, and not wanting to abandon a winning strategy, SLL will go with that. Tyler Durden, at zerohedge.com, says that means there will be no rate increase because the Fed won’t raise rates that close to an election, and besides, the economy will be in recession by then. SLL says there’s a overwhelmingly good chance Durden will be right. From Durden at zerohedge.com:

Several days before Thursday’s FOMC meeting, we asked rhetorically whether “Yellen is about to shock everyone”, and lo and behold: everyone was quite “shocked” when instead of a hawkish hold or a dovish hike, Yellen proceeded with the loosest possible decision: keeping ZIRP indefinitely, crushing both the Fed’s credibility and its market “communication” strategy in the process, and sending the market tumbling. That said, not everyone was shocked – as we also reported one bank made the explicit case not only for no rate hike but for further easing – as first reported here last weekend, “Goldman said The “Fed Should Think About Easing.”

This is what we added last weekend:

What one should most certainly pay attention to, however, is what Goldman says the Fed will do – you know, for “risk management” purposes – because as we have shown countless times in the past, Goldman runs the Fed.

As such, forget a September rate hike. Or perhaps Yellen will listen too carefully to Hatzius and instead of a rate hike, shock absolutely everyone, and instead of a rate hike the Fed will join the ECB, SNB and Riksbank in the twilight zone of negative rates. That, or QE4.

And why not: after both the Swiss National Bank and the Chinese central bank crushed investors who thought the banks would never surprise them, why should the Fed not complete the 2015 trifecta of central bank turmoil? After all, the money printers are already running on “faith” and credibility fumes. Might as well go out with a bang.

Not only is this precisely what happened (yes, the Fed gave its first ever NIRP hint ever) but more importantly, we got the latest confirmation that when it comes to policy, anything that Goldman wants, Goldman gets courtesy of a few clueless lifetime academics in charge of the US money printer.

With that out of the way, the only question that remains is not what will the Fed do, but what Goldman tells the Fed to do in 2015, or rather in 2016, because according to Jan Hatzius’ latest note, one can forget about a hike in October or December, and instead focus on 2016, or rather the summer of 2016.

To continue reading: Goldman Calls It: No Rate Hike Until Mid-2016

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He Said That? 9/17/15

Posted on September 17, 2015 | Leave a comment

From Goldman Sachs CEO Llyod Blankfein, when asked at an interview with The Wall Street Journal if the Federal Reserve should raise its federal funds target rate by twenty-five basis points today.

I wouldn’t do it.

The Wall Street Journal, “Wall Street Has Doubts About Fed Lifting Rates,” 9/17/15

The Fed did not raise the rate today. Back on June 21, SLL said they wouldn’t; not because SLL has any special connections inside the Fed or insight into its decision-making process, but simply because Goldman Sachs said they wouldn’t.

There is no more connected institution than Goldman Sachs, supplying both Bill Clinton and George W. Bush with Secretaries of the Treasury (Robert Rubin and Henry Paulson) and regularly landing on Top 10 lists of campaign donors for candidates of both parties. The heads of the European Central Bank and the Bank of England are Goldman alumni. If Goldman says a rate hike won’t happen in September, it won’t happen.

“Goodfellas and Goodgals,” SLL, 6/21/15

Yesterday, SLL reiterated its prediction.

Goldman Sachs is far more plugged into the Fed than SLL. They have said for some time that the Fed won’t raise the rate and SLL will go with that. Our lack of insight about the imminent move is exceeded only by our disinterest.

“Who Cares?” SLL, 9/16/15

Goldman Sachs is an amoral amalgamation of soulless whores and the Fed is a wholly captured subsidiary of it and the other big money center banks. For all the pundits who were citing this and that economic factor as reasons why the Fed would or would not lift the rate, this offers an abject lesson in what, and who, really drives monetary policy.

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