Now let me get this straight. Goldman Sachs (GS), aka "Government Sachs", has just received the largest penalty ever imposed on a financial firm. Yes, a whopping $550 million.
Relative to Goldman's 2009 net income of roughly $12 billion, this represents less than 5%, or about two weeks worth of earnings. In the case of British Petroleum (BP), they were arm-twisted into establishing a $20 billion escrow fund, or about 15 MONTHS of 2009 income. BP's escrow fund is to compensate victims.
For Goldman's victims, they were assessed $300 million, payable to 2 European Banks. Forgive me, weren't there a whole lot of other victims? So, BP is paying about 70 times that of GS. Seems reasonable to me.
BP's market capitalization has fallen by about half from peak to trough, a wipe-out on the order of $100 billion. BP's shareholders are the public. Goldman's market capitalization is down only 20%. It's shareholders are very largely Government Sachs alumni in senior policymaking positions. And, of course, management.
Are you beginning to see the problem here?
BP may still have stiff penalties imposed on it. The investigation is far from over.
Ok, so one company's alleged negligence led to economic disaster and the other's to ecological disaster? Is one that many times worse than the other?
Could the difference have anything to do with the rather sizable number of GS alumni in the government? Lloyd Blankfein walks away unscathed. Tony Hayward is driven out of Dodge.
Goldman's settlement permits it to walk away, while admitting virtually NO wrongdoing. Do you think that BP will be so lucky?
One can assume that investigators and senior officials of the SEC knew what they were doing. After all, why would they EVER want to bring down their future bosses?
Goldman officials praised the settlement. Yes, you read that correctly. Goldman officials praised the settlement! Doesn't that, in and of itself, say something? Do you think for one minute that the remaining BP officials will be thinking what a great deal they got?
But, Goldman had another huge reason to celebrate: the passage of the financial reform bill. Not only are Goldman's business interests protected, but the bill establishes new regulatory bodies. A full employment act for Government Sachs at government expense!
Marko's Take
Showing posts with label Government Sachs. Show all posts
Showing posts with label Government Sachs. Show all posts
Thursday, July 15, 2010
Tuesday, May 4, 2010
Government Sachs In The Cross-Hairs: What The Scandal Is All About
Goldman Sachs (GS), aka "Government Sachs" has been exposed for being what readers of Marko's Take, as well as anyone with a brain, already knew: the most corrupt and greedy institution on planet Earth! (But Marko... how do you REALLY feel?)
With so many allegations and opinions flying about, it's easy to get confused as to exactly what prompted the SEC complaint and how it relates to the Obama Administration's formerly cozy relationship with Government Sachs.
Goldman was accused of fraud by the Securities and Exchange Commission (SEC) in a lawsuit filed April 16. The SEC claims Goldman duped investors in a Collateralized Debt Obligation (CDO) called Abacus 2007-AC1, by failing to disclose that it was created with the help of hedge-fund firm Paulson & Co., which made a profit of about $1 billion when the investment collapsed in value. John Paulson became an overnight celebrity within the investment community by virtue of his huge score shorting the real estate market.
The CDO is a bet against the value of mortgages and the housing market overall. The securities themselves were allegedly created specifically to give hedge fund manager John Paulson a means to profit from the real estate meltdown. Goldman, for its part, put its own clients into these CDO's, which defaulted in droves.
Paulson and Goldman got rich as America and the world got poor.
Warren Buffett, the richest man in America, and the most hypocritical man in America, sees ABSOLUTELY NOTHING WRONG! Why should he? His investment in Goldman, made at terms not available to anyone BUT him, is in the money. What him worry? (But Marko... how do you REALLY feel?).
Goldman's defense filing included copies of six lawsuits, as well as a "demand letter" from the Louisiana Municipal Police Employees Retirement System, that the company's board launch an internal probe of "officers and directors responsible for the Abacus 2007-AC1 incident."
In addition, Goldman clients are up in arms, believing not only that they had been misled, but that GS used its trading operation to benefit itself at their expense. Goldman, trade against its clients for its own profit? You're kidding, right? NOT! (But Marko... how do you REALLY feel?).
Prosecutors have demanded trading records as part of a probe that has ensnared several hedge-fund managers, including Galleon Group founder Raj Rajaratnam.
The U.S. Attorney's office in Manhattan has alleged Mr. Rajaratnam was at the center of a massive insider-trading ring that generated millions of dollars in improper trades. Mr. Rajaratnam has denied wrongdoing.
The SEC move came as President Barack Obama is making a final push for financial reform in the Senate next week. “Wall Street titans still recklessly speculate with borrowed money,” he told supporters. “We cannot delay action any longer.”
And this explains the sudden ploy by President Obama to throw his cronies at "Government Sachs" under the bus. It's 2010, and the elections are coming up. How better to show the American people that you have their interests at heart? He's gotten what he can out of Goldman. They're no longer useful. No honor among thieves!
Suddenly, the market impression of GS has taken an extreme turn for the worse. Not only has its stock plunged, but now market fears that the cumulative effects of the SEC and the private lawsuits will imperil Goldman's excellent credit-worthiness.
The cost of insuring Goldman Sachs’ debt against default has risen to about the level of Morgan Stanley and Citigroup, two less profitable rivals, as Goldman’s regulatory woes take a toll on investors’ confidence and its standing on Wall Street.
Credit Default Swaps (CDSs) leapt to 160 basis points yesterday, a real market sign that this is no slap on the wrist, but a real threat to the most corrupt institution in the world. Couldn't happen to a better bunch of guys! And that's how I REALLY feel!
Marko's Take
Our newest video entitled "Social In-Security: The Problem" will be uploaded in the next 24 hours. You can access all our videos by clicking here: http://www.youtube.com/markostaketv.
With so many allegations and opinions flying about, it's easy to get confused as to exactly what prompted the SEC complaint and how it relates to the Obama Administration's formerly cozy relationship with Government Sachs.
Goldman was accused of fraud by the Securities and Exchange Commission (SEC) in a lawsuit filed April 16. The SEC claims Goldman duped investors in a Collateralized Debt Obligation (CDO) called Abacus 2007-AC1, by failing to disclose that it was created with the help of hedge-fund firm Paulson & Co., which made a profit of about $1 billion when the investment collapsed in value. John Paulson became an overnight celebrity within the investment community by virtue of his huge score shorting the real estate market.
The CDO is a bet against the value of mortgages and the housing market overall. The securities themselves were allegedly created specifically to give hedge fund manager John Paulson a means to profit from the real estate meltdown. Goldman, for its part, put its own clients into these CDO's, which defaulted in droves.
Paulson and Goldman got rich as America and the world got poor.
Warren Buffett, the richest man in America, and the most hypocritical man in America, sees ABSOLUTELY NOTHING WRONG! Why should he? His investment in Goldman, made at terms not available to anyone BUT him, is in the money. What him worry? (But Marko... how do you REALLY feel?).
Goldman's defense filing included copies of six lawsuits, as well as a "demand letter" from the Louisiana Municipal Police Employees Retirement System, that the company's board launch an internal probe of "officers and directors responsible for the Abacus 2007-AC1 incident."
In addition, Goldman clients are up in arms, believing not only that they had been misled, but that GS used its trading operation to benefit itself at their expense. Goldman, trade against its clients for its own profit? You're kidding, right? NOT! (But Marko... how do you REALLY feel?).
Prosecutors have demanded trading records as part of a probe that has ensnared several hedge-fund managers, including Galleon Group founder Raj Rajaratnam.
The U.S. Attorney's office in Manhattan has alleged Mr. Rajaratnam was at the center of a massive insider-trading ring that generated millions of dollars in improper trades. Mr. Rajaratnam has denied wrongdoing.
The SEC move came as President Barack Obama is making a final push for financial reform in the Senate next week. “Wall Street titans still recklessly speculate with borrowed money,” he told supporters. “We cannot delay action any longer.”
And this explains the sudden ploy by President Obama to throw his cronies at "Government Sachs" under the bus. It's 2010, and the elections are coming up. How better to show the American people that you have their interests at heart? He's gotten what he can out of Goldman. They're no longer useful. No honor among thieves!
Suddenly, the market impression of GS has taken an extreme turn for the worse. Not only has its stock plunged, but now market fears that the cumulative effects of the SEC and the private lawsuits will imperil Goldman's excellent credit-worthiness.
The cost of insuring Goldman Sachs’ debt against default has risen to about the level of Morgan Stanley and Citigroup, two less profitable rivals, as Goldman’s regulatory woes take a toll on investors’ confidence and its standing on Wall Street.
Credit Default Swaps (CDSs) leapt to 160 basis points yesterday, a real market sign that this is no slap on the wrist, but a real threat to the most corrupt institution in the world. Couldn't happen to a better bunch of guys! And that's how I REALLY feel!
Marko's Take
Our newest video entitled "Social In-Security: The Problem" will be uploaded in the next 24 hours. You can access all our videos by clicking here: http://www.youtube.com/markostaketv.
Monday, April 19, 2010
What Does 'GOLD'man Sachs Have To Do With Gold?
Nothing's easier than hopping on board a consistent and trending market. A Buy and Hold strategy is the most effective. However, the precious metals market continues to trade within the confines of a fairly narrow range.
After peaking briefly just above $1,200 in early December, Gold has traded in a $100 range for the last 4 months, primarily oscillating between $1,050 and $1,150. After slighty piercing the upside part of the range several days ago and giving signs that it was ready to resume its bull market, the yellow metal has once again given faithfull investors a temporary heart attack - dropping about $25 on Friday.
The benchmark index for precious metals stocks, HUI or "Gold Bugs Index", has also traded within a fairly narrow range despite a great deal of intra-day volatility. After reaching a high of about 500 in early December, the HUI lost a quick 25% to the 375 level in February and has been gently climbing in a stair-step fashion.
Trading a market is always virtually impossible except for the extra-ordinarily skilled or lucky. In the case of GOLD, or the underlying HUI, the pattern has demonstrated very little momentum or continuity in either direction. So, trading has resulted in whip-saws, unnecessary transaction costs and frustration.
The question remains as to what to do now, especially in light of the Friday smackdown ostensibly driven by the SEC allegations levied against Goldman Sachs (GS), aka "Government Sachs". It would seem that these allegations are specific only to the company and not a market event. It's even more difficult to comprehend how the "GOLD"man Sachs situation would cause the smashing of GOLD itself.
The answer is quite simple. They aren't related! The reaction in the overall market and the precious metals space was purely coincidental. The S & P 500 was already tremendously overbought and overdue for a sharp correction. On some dimensions, so was GOLD and the precious metals market. Traders often use significant news events as a reason to go to cash, especially in advance of a weekend, so as not to get caught in an adverse situation while the markets are closed.
This led to the significant broad market selloff which took other financial assets with it. GOLD and the underlying precious metals stocks weren't nearly as stretched as the general market, but there had been a decent rally in the last several weeks and nimble traders used the news as an opportunity to take profits.
From a technical perspective, the charts of GOLD and HUI remain in a bullish configuration. Neither has experienced a downward penetration of their respective 200 day moving averages. If that should occur, it might justify taking a closer look.
None of the underlying fundamental factors suggest that any change in outlook is warranted. Physical supplies of GOLD and SILVER remain tight and precious metals mining companies continue to deliver record revenues and profits.
The effects of record stimulus spending remain to filter through the economy. We've witnessed some, but not much, good news on retail sales, GDP and corporate profits. Yet, without much benefit to employment. Economists refer to that initial reaction as the "output effect".
Historically, the "output effect" is followed, with a time lag, by the "price effect". The price effect, or an increase in reported and un-reported inflation, is still simmering beneath the surface. The inevitable price effect will prove to be an excellent underpinning toward the continuation and acceleration of real assets such as GOLD and SILVER. As that occurs, the precious metals companies will continue to spit out even better profits and will be leading market participants.
One should view these temporary one- or two-day selloffs in precious metals stocks as gifts. Once the mining sector is clearly into gear, it will be very difficult to board the train. The character of the market will change and short-term selloffs will become fewer and shorter.
During the great NASDAQ bubble, as the tech-market accelerated, many experienced investors became skeptical of the move and missed the opportunity to generate incredible wealth. I should know. I was one of them!
The GOLD and miners market have all the hallmarks of being on the cusp of entering a hyperbolic growth phase. Letting the day-to-day noise affect our emotions and investment strategies is a mistake that even the most experienced investors make. No one has a crystal ball. However, until demonstrated to the contrary, Marko's Take says stay long and stay patient.
Marko's Take
Please visit our new YouTube video on the Legality Of The Personal Income Tax at (http://www.youtube.com/markostaketv#p/u/0/1TInKnCIikg).
After peaking briefly just above $1,200 in early December, Gold has traded in a $100 range for the last 4 months, primarily oscillating between $1,050 and $1,150. After slighty piercing the upside part of the range several days ago and giving signs that it was ready to resume its bull market, the yellow metal has once again given faithfull investors a temporary heart attack - dropping about $25 on Friday.
The benchmark index for precious metals stocks, HUI or "Gold Bugs Index", has also traded within a fairly narrow range despite a great deal of intra-day volatility. After reaching a high of about 500 in early December, the HUI lost a quick 25% to the 375 level in February and has been gently climbing in a stair-step fashion.
Trading a market is always virtually impossible except for the extra-ordinarily skilled or lucky. In the case of GOLD, or the underlying HUI, the pattern has demonstrated very little momentum or continuity in either direction. So, trading has resulted in whip-saws, unnecessary transaction costs and frustration.
The question remains as to what to do now, especially in light of the Friday smackdown ostensibly driven by the SEC allegations levied against Goldman Sachs (GS), aka "Government Sachs". It would seem that these allegations are specific only to the company and not a market event. It's even more difficult to comprehend how the "GOLD"man Sachs situation would cause the smashing of GOLD itself.
The answer is quite simple. They aren't related! The reaction in the overall market and the precious metals space was purely coincidental. The S & P 500 was already tremendously overbought and overdue for a sharp correction. On some dimensions, so was GOLD and the precious metals market. Traders often use significant news events as a reason to go to cash, especially in advance of a weekend, so as not to get caught in an adverse situation while the markets are closed.
This led to the significant broad market selloff which took other financial assets with it. GOLD and the underlying precious metals stocks weren't nearly as stretched as the general market, but there had been a decent rally in the last several weeks and nimble traders used the news as an opportunity to take profits.
From a technical perspective, the charts of GOLD and HUI remain in a bullish configuration. Neither has experienced a downward penetration of their respective 200 day moving averages. If that should occur, it might justify taking a closer look.
None of the underlying fundamental factors suggest that any change in outlook is warranted. Physical supplies of GOLD and SILVER remain tight and precious metals mining companies continue to deliver record revenues and profits.
The effects of record stimulus spending remain to filter through the economy. We've witnessed some, but not much, good news on retail sales, GDP and corporate profits. Yet, without much benefit to employment. Economists refer to that initial reaction as the "output effect".
Historically, the "output effect" is followed, with a time lag, by the "price effect". The price effect, or an increase in reported and un-reported inflation, is still simmering beneath the surface. The inevitable price effect will prove to be an excellent underpinning toward the continuation and acceleration of real assets such as GOLD and SILVER. As that occurs, the precious metals companies will continue to spit out even better profits and will be leading market participants.
One should view these temporary one- or two-day selloffs in precious metals stocks as gifts. Once the mining sector is clearly into gear, it will be very difficult to board the train. The character of the market will change and short-term selloffs will become fewer and shorter.
During the great NASDAQ bubble, as the tech-market accelerated, many experienced investors became skeptical of the move and missed the opportunity to generate incredible wealth. I should know. I was one of them!
The GOLD and miners market have all the hallmarks of being on the cusp of entering a hyperbolic growth phase. Letting the day-to-day noise affect our emotions and investment strategies is a mistake that even the most experienced investors make. No one has a crystal ball. However, until demonstrated to the contrary, Marko's Take says stay long and stay patient.
Marko's Take
Please visit our new YouTube video on the Legality Of The Personal Income Tax at (http://www.youtube.com/markostaketv#p/u/0/1TInKnCIikg).
Saturday, March 13, 2010
Economic Data Strengthens While Fundamentals Weaken!
We are in the midst of what some folks refer to as an "inflection point", a place in time where a significant shift is in the process of occuring. Just like a well-trained illusionist, they divert your attention to where you should NOT be looking in order to pull off their "magic".
As far as the economy goes, a slew of data continues to pour in adding credence to the notion that we are in a building recovery. This data is both misleading and guiding the uninformed to make decisions that will prove costly.
Retail sales, a key barometer of economic activity, showed surprising strength. As reported by the Commerce Department yesterday, they rose last month by 0.3%. Economists, surveyed by Dow Jones Newswires, had forecast a 0.3% decrease in February sales. With the Super Bowl early in the month, electronic store sales soared. (Now, somehow I seem to recall reading somewhere that the weather was lousy and the sales were supposed to be pretty bad! (http://markostake.blogspot.com/2010/03/blame-it-on-weather-when-its-convenient.html)
Retail sales data are an important indicator of consumer spending. Consumer spending makes up 70% of demand in the U.S. economy. The unexpected increase moved Macroeconomic Advisers to push their forecast for first-quarter gross domestic product growth up, by four-tenths to 3.1%.
Excluding the car sector, all other February retail sales rose 0.8%. Economists had forecast a 0.1% increase. Excluding automobiles, sales in January rose 0.5%, revised from a previously estimated 0.6% gain.
Then, of course, we had more "good" news as the unemployment rate fell below 10% despite the fact that, on net, jobs were LOST! (http://markostake.blogspot.com/2010/03/great-news-more-jobs-lost.html)
The brilliant Dr. Williams of Shadow Stats (http://www.shadowstats.com/) has weighed in with his ungarbled data to help set the record straight!
Dr. Williams reports that the heavy public hype of the anticipated large jobs gains ahead completely ignores the impact of census hiring.
Accoring to Williams, the census will have only a very temporary impact on employment and virtually no impact on the economy. While hundreds of thousands of part-time census jobs will boost payroll employment in March through May 2010, they all will be lost in sharp cutbacks in June through September. That, at least, was the pattern of jobs change around the 2000 census, which also was conducted as of April 1st of that year. Details of temporary census jobs patterns seen around the last two census periods are available from The Bureau of Labor Statistics (BLS).
The retail sales report for February 2010 indicated a statistically insignificant, seasonally-adjusted monthly gain of 0.34% and followed a revised 0.15% (previously 0.48%) monthly gain in December. Although the February numbers likely reflected some dampening effect of severe blizzards, the monthly gain was artificially boosted by downward revisions to prior reporting as well as ongoing inflation.
On a year-to-year basis, the February 2010 retail sales were reported up by 3.85% from February 2008, versus a downwardly revised 4.08% (4.71%) annual gain in January. Rising gasoline and food prices — as suggested by increased gasoline station and grocery store revenues — accounted for 58% of the reported monthly gain in February sales!
If we remove the effects of inflation, according to Williams, February 2010 retail sales activity likely will show both monthly and annual gains, although the revised real January number has turned negative month-to-month in revision.
Perhaps this explains why consumer sentiment and among small business owners continues to drop. The supposedly beneficial economic activity isn't translating into anything material as far as middle-America goes, even if the folks at "Government Sachs" continue to reap huge profits ! (http://markostake.blogspot.com/2010/02/government-sachs-how-big-menace-is-it.html) and (http://markostake.blogspot.com/2010/03/government-sachs-under-fire.html)
Are we being unfair to "da boyz club" in Washington, D.C.? If you think so, TAKE ME ON!
Marko's Take
We realize that times are tough and not many folks have much to spare. This is a free site and we intend to keep it that way. There are three fabulous organizations that we support. California Wildlife Center, Carol's Voice and Global Green Forex, whose logos and websites are accessible simply by clicking on them on the right side of this site. We hope you visit them and consider participating!
As far as the economy goes, a slew of data continues to pour in adding credence to the notion that we are in a building recovery. This data is both misleading and guiding the uninformed to make decisions that will prove costly.
Retail sales, a key barometer of economic activity, showed surprising strength. As reported by the Commerce Department yesterday, they rose last month by 0.3%. Economists, surveyed by Dow Jones Newswires, had forecast a 0.3% decrease in February sales. With the Super Bowl early in the month, electronic store sales soared. (Now, somehow I seem to recall reading somewhere that the weather was lousy and the sales were supposed to be pretty bad! (http://markostake.blogspot.com/2010/03/blame-it-on-weather-when-its-convenient.html)
Retail sales data are an important indicator of consumer spending. Consumer spending makes up 70% of demand in the U.S. economy. The unexpected increase moved Macroeconomic Advisers to push their forecast for first-quarter gross domestic product growth up, by four-tenths to 3.1%.
Excluding the car sector, all other February retail sales rose 0.8%. Economists had forecast a 0.1% increase. Excluding automobiles, sales in January rose 0.5%, revised from a previously estimated 0.6% gain.
Then, of course, we had more "good" news as the unemployment rate fell below 10% despite the fact that, on net, jobs were LOST! (http://markostake.blogspot.com/2010/03/great-news-more-jobs-lost.html)
The brilliant Dr. Williams of Shadow Stats (http://www.shadowstats.com/) has weighed in with his ungarbled data to help set the record straight!
Dr. Williams reports that the heavy public hype of the anticipated large jobs gains ahead completely ignores the impact of census hiring.
Accoring to Williams, the census will have only a very temporary impact on employment and virtually no impact on the economy. While hundreds of thousands of part-time census jobs will boost payroll employment in March through May 2010, they all will be lost in sharp cutbacks in June through September. That, at least, was the pattern of jobs change around the 2000 census, which also was conducted as of April 1st of that year. Details of temporary census jobs patterns seen around the last two census periods are available from The Bureau of Labor Statistics (BLS).
The retail sales report for February 2010 indicated a statistically insignificant, seasonally-adjusted monthly gain of 0.34% and followed a revised 0.15% (previously 0.48%) monthly gain in December. Although the February numbers likely reflected some dampening effect of severe blizzards, the monthly gain was artificially boosted by downward revisions to prior reporting as well as ongoing inflation.
On a year-to-year basis, the February 2010 retail sales were reported up by 3.85% from February 2008, versus a downwardly revised 4.08% (4.71%) annual gain in January. Rising gasoline and food prices — as suggested by increased gasoline station and grocery store revenues — accounted for 58% of the reported monthly gain in February sales!
If we remove the effects of inflation, according to Williams, February 2010 retail sales activity likely will show both monthly and annual gains, although the revised real January number has turned negative month-to-month in revision.
Perhaps this explains why consumer sentiment and among small business owners continues to drop. The supposedly beneficial economic activity isn't translating into anything material as far as middle-America goes, even if the folks at "Government Sachs" continue to reap huge profits ! (http://markostake.blogspot.com/2010/02/government-sachs-how-big-menace-is-it.html) and (http://markostake.blogspot.com/2010/03/government-sachs-under-fire.html)
Are we being unfair to "da boyz club" in Washington, D.C.? If you think so, TAKE ME ON!
Marko's Take
We realize that times are tough and not many folks have much to spare. This is a free site and we intend to keep it that way. There are three fabulous organizations that we support. California Wildlife Center, Carol's Voice and Global Green Forex, whose logos and websites are accessible simply by clicking on them on the right side of this site. We hope you visit them and consider participating!
Tuesday, March 2, 2010
Government Sachs Under Fire!
Poor ole Government Sachs (sarcasm intentional!). Now, because of all the bad publicity, it seems that they have to disclose, as a "risk factor" of the company, the increasing drumbeat of negative publicity. We, at Marko's Take, are proud to have done our share to contribute to that negative publicity. Could the timing be more than just coincidental (immodesty intentional)?
Recall that just a couple of days ago, we took a hard, long look at the boys behind the curtain (http://markostake.blogspot.com/2010/02/government-sachs-how-big-menace-is-it.html).
Now, Goldman Sachs (GS) has been forced to whine that adverse publicity has become a "risk factor" in its annual report that any investor need to take into account before making an investment in the company (http://online.wsj.com/article/SB10001424052748704754604575095313135203110.html?mod=djemTMB_h). I can't recall such a disclosure in decades of being a professional investor!
In its annual report, the New York company said "adverse publicity" could have "a negative impact on our reputation and on the morale and performance of our employees, which could adversely affect our businesses and results of operations."
The unusual disclosure in a 12-page section of "risk factors", ranging from rocky financial markets to natural disasters, is the latest sign of Goldman's whipping-boy status among rivals, lawmakers and angry Americans because of the firm's giant profits.
Some corporate-governance experts said the move isn't surprising given all the unwelcome attention Goldman has received since the financial crisis erupted. In July, a Rolling Stone article compared Goldman to a "great vampire squid wrapped around the face of humanity." The phrase has been widely repeated in other publications and online, along with Chief Executive Lloyd Blankfein's comment to a U.K. newspaper in November that the firm is doing "God's work." (GOD'S WORK???)
But, before you feel TOO sorry for the boys, GS just released a report, filed with the Securities and Exchange Commission (SEC), confirming what Marko's Take reported in our piece last Friday: they make their money from proprietary trading, not traditional banking or investment banking activities
(http://www.ft.com/cms/s/0/a6ce91f6-256f-11df-9cdb-00144feab49a.html).
According to the report, GS made at least $100 million in net trading revenues on 131 days last year! – equivalent to once every other trading day, according to the filing with the SEC.
Goldman managed the result even as it took greater trading risks in 2009 than in the previous year. Its daily “value at risk” (VAR) – the most that the bank estimates that its traders could lose on a given day – was $218 million in 2009, up from $180 million during the previous fiscal year, which closed in November 2008.
Helps to have friends in high places, NO?
Goldman’s 131 $100 million trading days in 2009 shattered its previous high of 90 days, set in 2008. In last year’s 263 trading days, the bank lost money 19 times, Goldman said in the filing. Its daily losses never exceeded $100 milion. “It’s impressive, but it’s not unexpected,” David Hendler, an analyst with CreditSights said. “They were one of the few games in town in 2009.”
Trading and principal investments, which includes Goldman’s merchant banking activities, account for more than 75% of its total net revenue.
Once we at Marko's Take stop sobbing for poor GS, we would love to field your comments. Think we're picking on them? TAKE ME ON!
Marko's Take
Episode 3 of our new YouTube series is now posted at (http://www.youtube.com/markostaketv). Look for episode 4 exposing the internal machinations of the Federal Reserve to be posted shortly. Federal Reserve? Or do we mean Goldman Sachs? It's tough to tell the players apart without a scorecard!
Recall that just a couple of days ago, we took a hard, long look at the boys behind the curtain (http://markostake.blogspot.com/2010/02/government-sachs-how-big-menace-is-it.html).
Now, Goldman Sachs (GS) has been forced to whine that adverse publicity has become a "risk factor" in its annual report that any investor need to take into account before making an investment in the company (http://online.wsj.com/article/SB10001424052748704754604575095313135203110.html?mod=djemTMB_h). I can't recall such a disclosure in decades of being a professional investor!
In its annual report, the New York company said "adverse publicity" could have "a negative impact on our reputation and on the morale and performance of our employees, which could adversely affect our businesses and results of operations."
The unusual disclosure in a 12-page section of "risk factors", ranging from rocky financial markets to natural disasters, is the latest sign of Goldman's whipping-boy status among rivals, lawmakers and angry Americans because of the firm's giant profits.
Some corporate-governance experts said the move isn't surprising given all the unwelcome attention Goldman has received since the financial crisis erupted. In July, a Rolling Stone article compared Goldman to a "great vampire squid wrapped around the face of humanity." The phrase has been widely repeated in other publications and online, along with Chief Executive Lloyd Blankfein's comment to a U.K. newspaper in November that the firm is doing "God's work." (GOD'S WORK???)
But, before you feel TOO sorry for the boys, GS just released a report, filed with the Securities and Exchange Commission (SEC), confirming what Marko's Take reported in our piece last Friday: they make their money from proprietary trading, not traditional banking or investment banking activities
(http://www.ft.com/cms/s/0/a6ce91f6-256f-11df-9cdb-00144feab49a.html).
According to the report, GS made at least $100 million in net trading revenues on 131 days last year! – equivalent to once every other trading day, according to the filing with the SEC.
Goldman managed the result even as it took greater trading risks in 2009 than in the previous year. Its daily “value at risk” (VAR) – the most that the bank estimates that its traders could lose on a given day – was $218 million in 2009, up from $180 million during the previous fiscal year, which closed in November 2008.
Helps to have friends in high places, NO?
Goldman’s 131 $100 million trading days in 2009 shattered its previous high of 90 days, set in 2008. In last year’s 263 trading days, the bank lost money 19 times, Goldman said in the filing. Its daily losses never exceeded $100 milion. “It’s impressive, but it’s not unexpected,” David Hendler, an analyst with CreditSights said. “They were one of the few games in town in 2009.”
Trading and principal investments, which includes Goldman’s merchant banking activities, account for more than 75% of its total net revenue.
Once we at Marko's Take stop sobbing for poor GS, we would love to field your comments. Think we're picking on them? TAKE ME ON!
Marko's Take
Episode 3 of our new YouTube series is now posted at (http://www.youtube.com/markostaketv). Look for episode 4 exposing the internal machinations of the Federal Reserve to be posted shortly. Federal Reserve? Or do we mean Goldman Sachs? It's tough to tell the players apart without a scorecard!
Friday, February 26, 2010
Government Sachs: How Big A Menace Is It?
Goldman Sachs (GS) is the firm that everyone LOVES to HATE and for good reason. Not only does this firm bear unreasonable power in the world financial structure, it is so intertwined with the U.S. Government, that the term "Government Sachs" has now emerged in our lexicon.
To be fair, GS is the premiere investment banking firm. But, to be honest, did they achieve that position fairly? Marko's Take says NO!
Most obviously is the revolving door between high level GS executives and high level government posts. A partial list includes the following: Rahm Emanuel, Jon Corzine, Hank Paulson, Tim Geithner, Neil Kashkari, key Treasury players Dan Jester, Steve Shafran, Edward C. Forst, and Robert K. Steel. The list goes on and on.
The conflict of interest is OBVIOUS and very ominous.
But, the conflicts don't stop there. A senior Goldman Sachs executive sent an e-mail message to clients recently disclosing that the firm’s Fundamental Strategies Group might have shared investment ideas with the firm’s proprietary trading group, or some clients before sharing them with others.
The e-mail message, obtained by DealBook, demonstrates the various conflicts that Goldman and other firms face in balancing the interests of its various clients and its own trading operation.
“We may trade, and may have existing positions, based on trading ideas before we have discussed those trading ideas with you,” Thomas Mazarakis, head of Goldman’s Fundamental Strategies Group, wrote (http://dealbook.blogs.nytimes.com/2010/01/12/goldman-executive-discloses-conflicts-policy/).
Marko's Take? What a great bunch of guys!
GS is also believed to be one of, if not, THE CONTROLLING OWNER of the FED!
Still not enough? A highly secretive entity, known as the "Plunge Protection Team" (PPT), is also believed to be directed by GS. The Working Group on Financial Markets, known colloquially as the PPT, was created in 1988 by Ronald Reagan, in response to the Black Monday stock market crash in 1987. Their operations have always been shrouded in secrecy, with a Washington Post article from 1997 writing that the group aims to prevent the "smoothly running global financial machine" from locking up.
If GS in indeed involved in market operations, that would explain the firm's enormous profitability which emanates primarily from its trading book, not lending as its bank mandate would suggest. Nothing like having a little inside information, trading ahead of clients and minting money through the FED (sarcasm intentional)! Nothing like having all your executives get cushy government jobs when they get tired of $50 million bonuses (sarcasm intentional)!
Until the FED's, Goldman's and the Treasury's surreptitious activities are disclosed, reviewed and audited will we know the real truth. However, the circumstantial evidence is quite damning. Marko's Take? Let's put these folks under the microscope and, if necessary, CLEAN HOUSE!
Think I'm being unfair to big ole Goldman Sachs? TAKE ME ON!
Marko's Take
Please visit our new YouTube site at http://www.youtube.com/markostaketv. We have a total of 8 episodes planned with a new segment, "What Exactly Is Peak Oil?... Part 2", to be released shortly.
Keep the faith...the revolution has begun and we WILL take the country back!
To be fair, GS is the premiere investment banking firm. But, to be honest, did they achieve that position fairly? Marko's Take says NO!
Most obviously is the revolving door between high level GS executives and high level government posts. A partial list includes the following: Rahm Emanuel, Jon Corzine, Hank Paulson, Tim Geithner, Neil Kashkari, key Treasury players Dan Jester, Steve Shafran, Edward C. Forst, and Robert K. Steel. The list goes on and on.
The conflict of interest is OBVIOUS and very ominous.
But, the conflicts don't stop there. A senior Goldman Sachs executive sent an e-mail message to clients recently disclosing that the firm’s Fundamental Strategies Group might have shared investment ideas with the firm’s proprietary trading group, or some clients before sharing them with others.
The e-mail message, obtained by DealBook, demonstrates the various conflicts that Goldman and other firms face in balancing the interests of its various clients and its own trading operation.
“We may trade, and may have existing positions, based on trading ideas before we have discussed those trading ideas with you,” Thomas Mazarakis, head of Goldman’s Fundamental Strategies Group, wrote (http://dealbook.blogs.nytimes.com/2010/01/12/goldman-executive-discloses-conflicts-policy/).
Marko's Take? What a great bunch of guys!
GS is also believed to be one of, if not, THE CONTROLLING OWNER of the FED!
Still not enough? A highly secretive entity, known as the "Plunge Protection Team" (PPT), is also believed to be directed by GS. The Working Group on Financial Markets, known colloquially as the PPT, was created in 1988 by Ronald Reagan, in response to the Black Monday stock market crash in 1987. Their operations have always been shrouded in secrecy, with a Washington Post article from 1997 writing that the group aims to prevent the "smoothly running global financial machine" from locking up.
If GS in indeed involved in market operations, that would explain the firm's enormous profitability which emanates primarily from its trading book, not lending as its bank mandate would suggest. Nothing like having a little inside information, trading ahead of clients and minting money through the FED (sarcasm intentional)! Nothing like having all your executives get cushy government jobs when they get tired of $50 million bonuses (sarcasm intentional)!
Until the FED's, Goldman's and the Treasury's surreptitious activities are disclosed, reviewed and audited will we know the real truth. However, the circumstantial evidence is quite damning. Marko's Take? Let's put these folks under the microscope and, if necessary, CLEAN HOUSE!
Think I'm being unfair to big ole Goldman Sachs? TAKE ME ON!
Marko's Take
Please visit our new YouTube site at http://www.youtube.com/markostaketv. We have a total of 8 episodes planned with a new segment, "What Exactly Is Peak Oil?... Part 2", to be released shortly.
Keep the faith...the revolution has begun and we WILL take the country back!
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