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Goldman Joins JPMorgan On The PR Offensive Against The US Middle Class, As Americans Find A Surprise Champion In The Face Of Fed's Tom Hoenig

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Fri, 04/02/2010 - 16:23 | 284629 doggis
doggis's picture

this is lord of the rings' "battle for middle earth" wall street style. the two towers of GS/JPM has constructed ingenious financial derivative weapons that will be put to use to defeat and ultimately rule all of us - at any/all costs. the question is: Will our story end up with the same outcome as tolkien triliogy?

Fri, 04/02/2010 - 18:24 | 284715 AccreditedEYE
AccreditedEYE's picture

The Squid has more evil in 1 tentacle than Orthanc and Barad-dur put together. (yes, I'm a geek)

Sat, 04/03/2010 - 00:09 | 284919 _Biggs_
_Biggs_'s picture

No, man.  Haven't you been reading around here?  Ingenious financial derivative weapons are good.

Sat, 04/03/2010 - 09:16 | 285069 Dr. No
Dr. No's picture

But the hearts of men are easily corrupted

Fri, 04/02/2010 - 16:23 | 284630 mkkby
mkkby's picture

What a bunch of psychopaths.  We need to take away the big bank subsidies, break them up and disband the fed.  But how will that ever happen when politicians owe their jobs to pac money and corporations have the same civil rights meant for humans?

Fri, 04/02/2010 - 16:29 | 284638 Bolweevil
Bolweevil's picture

Mr. Hoenig is gonna get kicked out of The Fed's fightclub for breaking rules #1 and #2.

Fri, 04/02/2010 - 16:38 | 284646 Don Smith
Don Smith's picture

Getting kicked out of the club may be preferable to the "Andrew Maguire" treament.  He better keep his eyes out for cars speeding quickly out of side alleys.

Fri, 04/02/2010 - 16:37 | 284644 john_connor
john_connor's picture

It's too late.  Geithner already out saying they are very close to financial reform legislation (without any substance). 

In other words we are right back where we were in 2007, except much more indebted.

Fri, 04/02/2010 - 16:39 | 284647 SteveNYC
SteveNYC's picture

"The firm would have now been a distant memory (whose stock the daytrading algos may or may not be gunning to $1-2/share levels, but which would for all intents and purposes be worthless) had it not been for the actions of the top three men in the US: Paulson, Bernanke, and Geithner"

 

If only, if only. P,B, and G can not escape the fate that karma will deal them. You can't fuck 300 million people and just expect to be let off the hook when it comes time to meet your maker. No vigilantism necessary, they will be reincarnated as toilet bowls, leppers, or something far, far worse.

Fri, 04/02/2010 - 16:50 | 284655 crosey
crosey's picture

On this Good Friday, perhaps the Almighty will have mercy on them.

If not, Hell might be an eternity of short-squeezes for them?

Fri, 04/02/2010 - 18:31 | 284723 dumpster
dumpster's picture

yep the slum pits of calcutta ... has openings   .. they are filled by ex-bankers from previous lives .

need some one to go on down and clean up the pipes , large turds get caught in the steel mesh,

always a bright spot .  we think how unfair for these men working in the sewers .  but the spot is always filled with many waiting in line

Sat, 04/03/2010 - 11:16 | 285108 pan-the-ist
pan-the-ist's picture

Do you seriously believe that the pipe cleaners 'deserve' their caste by wrongs committed in a previous life Hindoo?  That is the most disgusting feature of the Indian culture.  At least Muhammadean's don't accept their condition.  Christians on the other hand... shoveling shit is just the latest test.  Grin and bear it.

Sat, 04/03/2010 - 13:15 | 285159 Chumly
Chumly's picture

Christians on the other hand... shoveling shit is just the latest test.

BWHAHAHAHAHahahaa!!  Hillarious! But, I appreciate your recognition.


Sat, 04/03/2010 - 08:59 | 285062 Seer
Seer's picture

300 million?  Oh no!  GS is international, the numbers are MUCH bigger (just ask those in Greece and elsewhere).  I'd hope that the pace of karma picks up before GS includes some sort of terrorist legislation that fingers anyone critical of them as being a terrorist.

We're now begining to see how GS and similar US corporations have been effing the rest of the world (why "they hate us").

Fri, 04/02/2010 - 16:44 | 284649 crosey
crosey's picture

3 wishes to be granted from the genie:

  • Marked-to-market on Monday
  • 1 case of Macallan 25
  • 1 box of Habanos

 

Fri, 04/02/2010 - 17:02 | 284661 JW n FL
JW n FL's picture
Client/Parent Total American Bankers Assn $8,970,000 JPMorgan Chase & Co $6,170,000 Citigroup Inc $5,500,000 Independent Community Bankers of America $4,750,000 Bank of America $3,570,000 Wells Fargo $2,880,000 Barclays $2,490,000 Consumer Bankers Assn $1,395,000 Electronic Payments Coalition $1,060,000 Bank of New York Mellon $1,041,000 Royal Bank of Scotland $980,000 Institute of International Bankers $810,000

http://www.opensecrets.org/lobby/indusclient.php?year=2009&lname=F03&id=

But Wait, Obama's New Bank Plan Won't Fix A Thing http://www.businessinsider.com/henry-blodget-wait-obamas-new-bank-plan-wouldnt-have-prevented-the-financial-crisis-from-happening-2010-1| Henry Blodget | Jan. 21, 2010, 2:49 PM

Read more: http://www.businessinsider.com/henry-blodget-wait-obamas-new-bank-plan-wouldnt-have-prevented-the-financial-crisis-from-happening-2010-1#ixzz0jye2UErF

 

Treasury Department Is Already Saying Volcker Rule Won't Change Goldman Sachs http://www.businessinsider.com/treasury-department-is-already-saying-volcker-rule-wont-change-goldman-sachs-2010-2 I LOVE this! http://www.youtube.com/watch?v=Ek7zc0lJxbM&feature=related Goldman Sachs To Become The Fourth Largest Bank Holding Company

September 21, 2008

New York, September 21, 2008 -- The Goldman Sachs Group, Inc. (NYSE: GS) today announced that it will become the fourth largest Bank Holding Company and will be regulated by the Federal Reserve.

In recent weeks, particularly in view of market developments, Goldman Sachs has discussed with the Federal Reserve our intention to be regulated as a Bank Holding Company. We understand that the market views oversight by the Federal Reserve and the ability to source insured bank deposits as providing a greater degree of safety and soundness. We view regulation by the Federal Reserve Board as appropriate and in the best interests of protecting and growing our franchise across our diverse range of businesses.

Since the spring of this year, the Federal Reserve has been reviewing our liquidity and funding profile, capital adequacy and overall risk management framework. We are pleased that the Federal Reserve recognizes the strength and health of our liquidity and funding and the overall quality of our risk management. We have maintained our Tier 1 capital levels well above the Federal Reserve’s “well-capitalized” threshold of 6 percent since these ratios were first calculated in 2004. For the past several quarters, in light of the difficult market environment, we have been reducing our risk exposures and increasing our capitalization. Our Tier 1 capital ratio at the end of the third quarter was 11.6 percent.

“When Goldman Sachs was a private partnership, we made the decision to become a public company, recognizing the need for permanent capital to meet the demands of scale. While accelerated by market sentiment, our decision to be regulated by the Federal Reserve is based on the recognition that such regulation provides its members with full prudential supervision and access to permanent liquidity and funding,” said Lloyd C. Blankfein, Chairman and CEO of Goldman Sachs. “We believe that Goldman Sachs, under Federal Reserve supervision, will be regarded as an even more secure institution with an exceptionally clean balance sheet and a greater diversity of funding sources.”

Goldman Sachs already has two active deposit taking institutions – Goldman Sachs Bank USA and Goldman Sachs Bank Europe PLC – which, together, hold more than $20 billion in customer deposits. We are moving assets from a number of strategic businesses, including our lending businesses, into GS Bank USA. With over $150 billion in assets, GS Bank USA will be one of the ten largest banks in the United States. While these assets are fully funded for term, they also are available to be funded by the Federal Reserve. We intend to grow our deposit base through acquisitions and organically.

Goldman Sachs is a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide to a substantial and diversified client base that includes corporations, financial institutions, governments and high net worth individuals. Founded in 1869, it is one of the oldest and largest investment banking firms. The firm is headquartered in New York and maintains offices in London, Frankfurt, Tokyo, Hong Kong and other major financial centers around the world.

 

0% Fed window ='s.....

January 21, 2010 Goldman Sachs Reports 2009 Earnings Per Common Share of $22.13; Fourth Quarter Earnings Per Common Share were $8.20

 

Would someone from the NY Fed kindly explain the precise nature of the waiver that has been granted to Goldman so that it can operate in this fashion?  If this is temporary, is it envisaged that Goldman will cease being a bank holding company, or that it will divest itself shortly of activities not usually allowed (and with good reason) by banks?  Or will all bank holding companies be allowed to expand on the same basis.  (The relevant rules appear to be here in general and here specifically; do tell me what I am missing.)

 

http://baselinescenario.com/2009/10/03/a-short-question-for-senior-officials-of-the-new-york-fed/

 


JPMorgan Chase & Co. 270 Park Avenue, New York, NY 10017-2070 NYSE symbol: JPM


 


www.jpmorganchase.com

News release: IMMEDIATE RELEASE

Investor Contact: Lauren Tyler (212) 270-7325 Media Contact: Joe Evangelisti (212) 270-7438 1 On a managed basis. For notes on managed basis and other non-GAAP measures, see page 13.

 

JPMORGAN CHASE REPORTS FOURTH-QUARTER 2009 NET INCOME OF

$3.3 BILLION, OR $0.74 PER SHARE, ON REVENUE


 

http://files.shareholder.com/downloads/ONE/414341759x0x344208/e19957ae-9c36-4e7b-bd64-4d42e3ebd8e9/4Q09_Earnings_Press_Release_Final.pdf

1 OF $25.2 BILLION

FULL-YEAR 2009 NET INCOME OF $11.7 BILLION, OR $2.26 PER SHARE,

                                                                         ON RECORD REVENUE

 

1 OF $108.6 BILLION

 

 

 

 

TARP Funds
On October 13, 2008, I went to Washington, DC with eight other chief executives of other financial firms. We were asked by the Secretary of the Treasury, the Chairman of the Federal Reserve, the Office of the Comptroller of the Currency, the FDIC and the New York Federal Reserve Bank to agree to accept a package of capital from the government to help fix the collapse in the credit and lending markets.

JPMorgan Chase did not ask for, nor did we need, a capital infusion from the federal government. As I noted earlier, our capital ratios remained well in excess of recommended regulatory levels throughout the crisis, even excluding federal assistance. We continued to lend to customers, invest in the business, hire new employees, and attract substantial deposit flows. However, federal officials asked us to set an example for others by accepting the TARP funds as a sign of support for the government's actions to strengthen the economy. We viewed our participation as the right thing to do for the economy and the financial system. We think the government acted boldly in a very tough situation, and the outcome possibly could have been far worse had it, and other governments around the world, not taken such steps. Some individual financial institutions were certainly rescued through these actions, but the entire economy benefited from the restoration of stability to the financial system.

After acceptance of the government's $25 billion preferred stock investment, we continued our lending activities to consumers, businesses and governments. In the fourth quarter of 2008 alone, we extended over $150 billion in new credit to consumers, businesses, municipalities and non-profit organizations. That figure includes over $50 billion in new consumer originations (mortgages, home equity loans, credit cards, student loans, auto loans, etc.); over $20 billion in new credit extended to 8,000 small and mid-sized businesses; and $90 billion in new and renewed commitments to our corporate and other clients. We also dramatically increased our presence in the interbank market, lending an average of $50 billion a day to other banks. We did so while maintaining prudent risk management and underwriting standards, mindful of market and credit risks.

In early May 2009, we successfully completed an extensive stress testing program for major banking institutions that determined there would be no need for us to raise additional capital even under the most adverse scenario envisioned by regulators. After consultation with our regulators and the Treasury Department, we received approval to pay back TARP funds in June 2009. Along with the $25 billion that we repaid, we paid $806 million in dividends on the preferred stock. In December 2009, the United States Treasury sold for $936 million the JPMorgan Chase warrants it received in connection with its TARP investment. Thus, all told, taxpayers received more than $1.7 billion, or an 11% annualized return on their investment.

http://investor.shareholder.com/jpmorganchase/releasedetail.cfm?ReleaseID=437415

How much have they borrowed at the 0% Fed window... ?

Lending activity focused on the large number of companies raising capital, as they looked to strengthen their balance sheets and pay down debt. Arbitrage and directional opportunities created by rights and convertible bond issues resulted in borrowing demand for shares of the issuer. CB arbitrage in particular had a terrible year in 2008, and has bounced back strongly in 2009 as issuance has increased.

http://www.jpmorgan.com/tss/General/From_the_Lending_Desks_Equities/1159392983145

 

So.... Goldman / JP will make loans... with 40% equity participation... when the requirements at the Fed window are still 20% (mean)... and pass thru the dollars directly to the bottom line for earned income... 6% rates? plus 40% equity requirements... and those are GREAT! TERMS! from the Squid and Friends.

 

The "American Tax Payer" has paid to Lobby / Bribe Congress and the House (White House as well)... so that the TBTF's will not only maintain maket share but grow thier foot print thru 0% loans at the Fed window and pick thru the best assets... The TARP funds repayment is NOT where the funding is coming from... it is comiong from the Fed Window at 0%...

 

Audit the Fed... Audit the Beltway... PAC, Soft and / or other monies and lets Hang these guys.

 

As long as the Lobby controls the purse strings inside the Beltway... nothing will change.

 

IMHO.

 

Be well all, JW

 

P.S. Gold Bugs are idiots! Junk that!

Fri, 04/02/2010 - 18:12 | 284704 AccreditedEYE
AccreditedEYE's picture

I really hope someone forwarded this story to Simon Johnson and Paul Volcker... Gotta keep ammo going to the troops.  

Fri, 04/02/2010 - 20:33 | 284798 buzzsaw99
buzzsaw99's picture

He has no vote and is on the way out. The public consumption dissent from middle earth. This changes nothing.

Fri, 04/02/2010 - 22:40 | 284873 AccreditedEYE
AccreditedEYE's picture

Indeed. I had false hope...  I wish it were as simple as destroying the One Ring in Mordor to fix the mess that we are sitting in.

Fri, 04/02/2010 - 20:41 | 284803 williambanzai7
williambanzai7's picture

Humpty Banker sat on a wall.
Humpty Banker was just too big to fail.
All the Fed's Bankers including it's Chairman
Were sure to let Humpty do it again.

HAPPY 2BIG2FAIL:

http://williambanzai7.blogspot.com/2010/04/happy2big2fail.html

 

Fri, 04/02/2010 - 21:03 | 284815 sweet ebony diamond
sweet ebony diamond's picture

"It is no secret that should all the US megabanks be forced to mark their assets to market, all of them would be immediately insolvent"

i think a better statement is:

should all megabanks be forced to mark their assets to common-law valuation metrics all of them would be immediately insolvent.

Fri, 04/02/2010 - 21:35 | 284837 HarrisonBergeron
HarrisonBergeron's picture

As soon as interest rates rise appreciably, whether a week or a day from now, the

IR swaps will turn JPM into a supermassive black hole. With a few TBTF to follow. I think the negative swap spread is the tell for this move. The TBTF think they have put together a perfect racket but are overplaying their hand. 

Fri, 04/02/2010 - 21:36 | 284839 aint no fortuna...
aint no fortunate son's picture

Business Week covers - aren't they supposed to be the kiss of death?

Oh yeah, and FUCK YOU Jamie.

Fri, 04/02/2010 - 22:14 | 284859 williambanzai7
Sat, 04/03/2010 - 00:12 | 284923 Cookie
Cookie's picture

My hatred knows no bounds. From Wall St. via London to Bangkok (where they launder Myanmar drug money), I loath them all

Sat, 04/03/2010 - 06:56 | 285035 boooyaaaah
boooyaaaah's picture

<<<In response, he says policymakers should simply break up the megabanks and split them off into their component parts.

"I think they should be broken up," Hoenig said. "I think there's no reason why as we've done in other instances of [sic] finding the right mechanism to break them into their components.>>>>

 

Wait a minute.  If the federal reserve's mission statement is to keep full employment and regulate the banks and money supply, then why doesn't ---the fed break up the banks -- all by themselves

Also if I remember correctley the hedge funds had almost brought the big banks to their knees --- prompting Paulson and the SEC chief to take drastic measures.

The hedge funds were actually doing a better job of regulating than the FED

Is there a way we can tap into this creative distruction into this before it is too late. Or have we lost or only opportunity.

Maybe the Fed could isue to the American public a one time naked short SDR against GS & JPM.

Hoenig for chairman

Git er done

 

Sat, 04/03/2010 - 09:04 | 285065 Seer
Seer's picture

Maybe the Fed could isue to the American public a one time naked short SDR against GS & JPM.

LOL!  Yes, but since corporations are "people" (recently backed by the SC), GS & JPM would take this to the Supreme Leaders and have it all tossed out; that or they'd be able to short themselves so that they could take themselves out and make a killing (and the zombies would rise again).

Sat, 04/03/2010 - 10:24 | 285087 Madcow
Madcow's picture

There's no way to hide deteriorating cash flow.

As incomes fall and taxes increase, there is simply no way around collapsing rents, debt repudiation, bond payment defaults, etc. etc. etc. 

A bunch of silly rhetoric. Just stick to the math:

Collapsing money supply x Increasing public sector borrowing = Skyrocketing interest rates.

Sure, that helps the dollar - until it doesn't. 

Sat, 04/03/2010 - 11:33 | 285113 ptoemmes
Sat, 04/03/2010 - 13:50 | 285180 Jim B
Jim B's picture

More self-serving BS from Wall Street...  The arrogance is mind numbing

 

Sat, 04/03/2010 - 16:42 | 285319 HarrisonBergeron
HarrisonBergeron's picture

a poet once said:

"Yeah I'm rollin' down Rodeo wit a shotgun

The rungs torn from the ladder can't reach the tumour
One god, one market, one truth, one consumer "

Mon, 04/12/2010 - 04:30 | 296080 mark456
mark456's picture

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