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Goldman Sachs Responds To Zero Hedge
A week ago we posed several questions to Goldman managing directors Lucas van Praag and David Viniar. Earlier today we received a broad response. We present it in its entirety for our readers. We will provide our counter-response shortly.
Dear Mr. Durden:
We read your comments about prop trading with interest. I’ve addressed some of the points you raised, as well as the questions you directed to David Viniar and me. The fact that I haven’t necessarily addressed all your points shouldn’t be construed as tacit acceptance of any of them.
1) “Considering that Goldman must disclose a trading VaR, or value at risk on a quarterly basis, which over the past year has averaged over $200 million, one can back into actual prop capital and revenue”
Our VaR is primarily driven by client-related activity rather than proprietary activity. Using VaR to “back into actual prop capital and revenue” would produce a meaningless result.
2) “A month ago Zero Hedge presented a unique glance into Goldman’s prop trading activities courtesy of the 2008 tax filing of the Goldman Sachs Foundation”
Your premise wrong. There are tax and legal restrictions which prohibit the firm from trading on the Foundation’s behalf.
3) “Goldman disclosed that it had $352.2 billion in fair value of principal trading instruments at September 30, 2009. How much of this is considered allocated to prop if this is in fact a distinct strategy from principal?”
The $352.2bn is the fair value of our trading assets, the vast majority of which consist of trading inventory we use to make markets for our clients.
4) “Does the firm's FICC revenue line have absolutely no prop trading embedded within it? Goldman made $20 billion in FICC year to date: is none of this $20 billion due to capital at risk, or is it all due to wide bid//ask spreads? ”
We’ve said publicly that prop trading represents approximately 10% of this year’s reported net revenue. Some of that revenue is reflected in the FICC line.
We generate the vast majority of our revenue in FICC by facilitating trading activity for our clients and nearly all our revenues in FICC are “due to capital at risk” (your phrase). In periods when capital withdraws from the market, bid-offer spreads tend to widen and we benefit to the extent that we are willing to commit capital and do so successfully. These activities necessarily involve risk taking.
Over the last 5 years, prop investing activities have represented about 12% of firmwide net revenues
5) “What was the pro rata allocation to Goldman Sachs Foundation as a percentage of capital per each trading ticket in 2008? Does GSF have a dedicated trading silo within Goldman?”
As I said above, as required by law, the Goldman Sachs Foundation is managed separately. There are no “trading silos” dedicated to the Foundation’s activities
6) “Why did the Goldman Sachs Foundation not participate in Goldman's prop CDS trades?”
See above.
7) “How much did Goldman's prop operations lose in 2008 trading Russell 1000 futures?”
The amount was de minimus.
8) “How much did Goldman's prop operations lose trading all equity, credit and commodity products?”
Not disclosed
9) “When will Goldman clearly and distinctly segregate on its income statement the prop trading profit and losses, if these are in fact unique from "principal" trading as defined, and attach an MD&A to all relevant disclosure?”
Our proprietary activity is small in the context of the firm’s overall revenues and risk exposures.
10) “Goldman is insinuating is that the firm's prop trading really carries virtually no risk.”
We don’t think any trading activity is risk-free. Risk is risk, and our job is to make sure individual risks are appropriately sized.
11) “How do you define market risk?”
We define it as the potential for change in the market value of our trading and investing positions.
12) “Do you take fixed price positions?”
Please explain your question.
13) “Are you exclusively a hedger or do you ‘optimize’ your assets?”
Please clarify what you mean.
14) “Do you have a risk policy?”
Yes. We think of risk management as being one of our core competencies and it remains integral to our success as a firm.
Our management team is active in risk management discussions across the firm and open discussion on the subject are encouraged. By the way, we think fair value accounting is a critically important aspect of risk management. Another important tenet of our approach to risk management is the independence of control functions from the business units
We also use a variety of approaches to monitor risk. In addition to VaR, we use multiple stressed-based methodologies, including jump-to-default analyses, to quantify tail risks.
16) “How do you monitor trading/hedging limits?”
Virtually all of our equity and fixed Income businesses receive VaR based risk-limits, aged inventory limits and balance sheet limits. The limits are reviewed by senior management and Risk Committee on a regular basis.
17) “Mr. David Viniar, who recently said that the firm doesn't benefit from any implicit government guarantee. Goldman, as presented here, benefits directly from $21 billion in FDIC (taxpayer)-insured bond issues. How does Mr. Viniar reconcile this particular fact with his spurious claim?”
We don’t believe that we have any form of guarantee, implicit or otherwise, from anyone and we certainly don’t manage our business as though we do.
We issued debt under the FDIC’s Temporary Loan Guarantee Program and, like every other bank that issued debt under the program, paid the FDIC a significant amount of money upfront for the guarantee. We also pay interest to the investors who bought the notes. We stopped issuing debt under the program in March. The notes are not callable.
In the context of the firm’s approximately $900 billion balance sheet and hundreds of billions of dollars of funding, we don’t think any informed investor would believe that FDIC insurance on a small portion of our funding represented a “guarantee” of the firm.
Regards / Lucas van Praag
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Tad my Man!
Watch it from minute 1:15
http://www.youtube.com/watch?v=0VWkghFkofE
Wow. Only once before did I have an inkling of urge to subscribe to a YouTube channel, and that was because I thought the guy was a goof. But this Tenebroust guy is fucking terrific.
Thanks for the link!
I am Chumbawamba.
Ya. He knows how to use a post hole digger on these people assholes doesn't he.
That is stunning imagery. Thanks!
I am Chumbawamba.
Funny thing is that methinks it's reality for Squid and 29 year old, tight, and right Mr. COO. Post hole digging hence the promotion may be based on favoritism. Maybe.... Rumors, sex in the city and such.
Naughty boys of Wall St.
To Goldman: you can get rid of a lot of public ire by getting rid of your TLGP issues -before- paying out bonuses. Then take whatever is left and pay it out to whomever you want. Why hasn't Lloyd figured this out?
because Lloyd is a hypocrite who claimed he wished the TLGP amount utilized by Goldman was "zero" and now that they have the cheap TLGP funds (still cheaper than the fees and interest paid per their response to ZH today) and greed takes over.
Most hated corporation in the USA and polls show a majority of Americans detest Goldman Sachs.
I believe Americans will win.
I believe Goldman will lose.
I have a dream, where ex-goldmanites are made to restore whole those whom they cheated or deprived of substance with malice aforethought. I have a dream that all their neighbors, friends, family, and citizens of the world can view their actions and misdeeds in exact detail.
I see them travailing in hard labour working off a long sentence in the land once bountiful which they stripped and deprived of its core wealth.
I awoke with a sense that justice could be served.
@deadhead,
You and I had a good dialogue several weeks back, so I ask you to please entertain my contribution with an open mind, and please respond accordingly.
http://money.cnn.com/2009/05/12/news/fdic.guarantee.fortune/
The amout that GS issued is comparatively less than their peers under the FDIC TLGP:
JP Morgan: $40B total; $11B non-guar.
Morgan Stanley: $24B total; $4B non-guar.
Goldman Sachs: $21B total; $5B non- guar.
http://www2.goldmansachs.com/our-firm/press/press-releases/current/pdfs/...
GS stated in their Q3 earnings release that their capital structure consisted of $255.07B in total assets, with $65.35B in shareholders' equity ($58.40B common, $6.96B preferred) and $189.72B in long-term "unsecured" borrowings (all Freudian slips aside). For arguments sake, lets assume that the $189.72B included the $17B backstopped by the FDIC. That means only 8.96% of GS's debt financing is from said secured issues.
http://online.wsj.com/article_email/SB125737396782229187-lMyQjAxMDI5NTE3...
Given that GS issued less debt than JP Morgan and Morgan Stanley, one can only deduce that their competitive advantage with respect to long-term funding costs lie with the management of their capital structure (since refinancing only 8.96% of outstanding debt would have a negligible effect compared to the reductions explained herein; see chart attached to WSJ article):
"...The low rate on long-term borrowings also appears to give Goldman a competitive edge. At 0.92%, the firm is well below J.P. Morgan Chase's 2.09%. Since J.P. Morgan is funding a markedly different mix of assets from Goldman, the comparison mightn't be apples-to-apples. Morgan Stanley is a closer comparison. It has yet to release its third-quarter long-term borrowing cost, but in the second quarter Goldman's 1.26% was less than half of Morgan Stanley's 3.2%.
"Goldman has been helped by its use of interest-rate derivatives. When issuing long-term fixed-rate debt, Goldman has for years entered swaps that effectively convert nearly all of that debt to floating-rate. Thus, as interest rates plummeted, so did one of Goldman's main expenses.
"This sort of conversion is widespread on Wall Street. So why hasn't it led to similarly low funding costs at, say, Morgan Stanley? Maybe the two firms calculate the cost differently. Or Goldman may have converted more of its fixed-rate debt to floating..."
Further, GS does not repay the funds borrowed under the FDIC TLGP because they contractually cannot:
"...The notes are not callable."
In summation, you have articulated your position on GS very well over your numerous contributions. I suppose that my only question for you is whether you personally detest GS for participating in the FDIC TLGP (which you had stated as your only discontent prior to- see "Is The Fed Facing Margin Calls From European Banks?"), or is it because the government in backstopped all TBTF institutions in the first place, and GS has been the most successful since that time. Neither answer is wrong.
But from my perspective, it can't be because GS has attained low long-term funding costs, because (according to the WSJ article) they already had that handled, regardless of the FDIC TLGP financing.
Thanks again, and I hope that this post elicits more "Ashbury" than "Haight."
Briefly summarizing on my part and I will answer anything that I may have missed if that's okay with you.
1. I absolutely do NOT detest GS for participating in the TLGP. The program was made available by the U.S. gov't for a number of financial institutions and GS simply took advantage. My disgust for Goldman on this issue is twofold: A. Mr. Blankfein's hypocricy for stating that he wishes his firm's participation was zero, yet the firm has the money to cut itself loose from this government subsidized program yet does not do it. That's prima facie hypocricy in my book. B. Mr. Viniar's comments averring that Goldman has no implicit or explicit gov't guarantees: like I said, this one doesn't pass the giggle test. I simply cannot reconcile Viniar's comments with the fact that they still participate in the TLGP. I would love for someone to point out some form of logic where I am incorrect.
As to this matter of the notes not being callable. Firstly, I do not know the contractual details and my expertise on bonds is limited. Secondly, for the right price, just about everything is callable. Thirdly, if a party claims to be independent of the government or wishes it was independent of the government and has the financial wherewithal to make the wish come true, then put your money where your mouth is and make it happen. I hope this is clear.
You are correct about the other financial institutions receiving government assistance, specifically TARP in this discussion. I don't recall specifics of Dimon or Mack making the claims that they are free from the government. If they have in the past or begin to trumpet that mantra, then they are no different than GS and should be called out.
FWIW, I have always viewed myself as more of a "capitalist" or "free enterprise" person and I think that this type of system is still superior to others. The Wall Street/Banking Industry/Federal Reserve cabal would like the general public to think that this is still the way it is in the USA but it is clear to me that power has been significantly consolidated amongst a small group of financiers and such concentration of power portends dangerous waters ahead (we know what they are, hence I will not re-write history). Further, I am of the notion that this financial group has significant control over the United States Congress and Executive Branch to the detriment of the general populace. With all the due respect in the world to James Madison, I would call our situation "tyranny of the minority".
I'm happy to respond to other questions or clarify any points.
Thanks deadhead. As always, I appreciate your thoughts.
I fully agree with you about the hypocisy of Goldman's public discourse. Regardless of their intentions for stating what they have (defending compensation packages, deflecting animosity, etc.), GS simply cannot honestly state that they are out from governmental assistance so long as they carry the FDIC TLGP funding on their balance sheets.
As for the callable status of the notes, I also find it a convenient circumstance that GS can state that the horrible plight to which they suffer also aids their bottom line (regardless of how substantial or minute).
I would tend to agree that, in most circumstances, anything can be accomplished for a given price. With respect to the callability of these specific bonds, I would be curious to hear what an industry insider has to say about this (hint hint- Tyler, CreditTrader... Bueller...), as I think it would do a lot to shed significant light on the People v. Goldman case playing out in the media.
Thanks again for taking the time, and I'm sure that our opinions will meet again going forwards.
cool beanz...
I've kinda been out of the loop again DH, but for anyone looking to read the article in the January Vanity Fair on Goldman entitled "Goldman Sachs, Too Bare Knuckled to Fail?" there's nothing new in it. The writer tries to address the public hatred of the firm but fails to get anywhere near the goal. However, Annie Liebowitz took a great shot of Lloyd for those of you needing a new dartboard icon for Christmas.
was worried about you there Howard...good to see you back on the keyboard.
Written by Bethany McLean.
Perennial hedge fund journo-skank-ho. Made a quiet exit from Fortune after she was implicated in naked shorting schemes with other Wall Street skanks. She is definitely the go-to-girl for Goldman.
I wonder how much they paid her for services rendered?
Bethany McLean
Okay, since I can't prove you're not a GS apologist, or worse, I'll bring up this point too:
Hey, DH, you make a lot of good posts - but why waste your time!
Why don't you call up your Senator and cry a little - I'm sure Senator 'You bitch' Schumer would understand. Call up Fwank, too. He's always listening. I may not be as articulate as you, but I cannot help but quietly 'puke a little in my mouth' at your attempts to thank/damn congresscritters by calls, letters, emails, howthefuckever. You appear to be pretty damn detached from the reality of encroaching, if not heavily present, tyranny. You mention your awarness, but your posts seem to accept it as if it has nothing to do with your investment perspective. Are you that callous? ZH may not be a political soapbox, but, then again, you use it quite regularly for it.
Thank you for propping up the system as it fails. So, my question would be, how can you logically support the status quote, in any way?
Ready, DH.
WaterWings...
I genuinely am not able to understand the following:
A. I asked for a logical counterargument to mine and your response is "
Okay, since I can't prove you're not a GS apologist, or worse, I'll bring up this point too:
Hey, DH, you make a lot of good posts - but why waste your time!
A. I cannot see where you answered my request with any form of argument relating to the TLGP issue and the concept of gov't guarantee vs. the Goldman position on this matter.
B. as to "but why waste your time!". I don't view my attempts to discuss with others the enormity of our financial, economic and political problems a waste of time.
C. as to "at your attempts to thank/damn congresscritters by calls, letters, emails, howthefuckever" This is one of the standard protocols in the USA for petitioning the government. Writing and expressing opinions in blogs such as this and others is also another form of petition. Contributing resources to organizations, people, and causes is another. Speaking and having discussions with those I have relationships with is another. I do all of them to attempt to effectuate change.
D. as to "You appear to be pretty damn detached from the reality of encroaching, if not heavily present, tyranny. You mention your awarness, but your posts seem to accept it as if it has nothing to do with your investment perspective. " I have stated on numerous occasions that I am concerned about encroachment, tyranny. In this thread, for example, I wrote a play on words of one of James Madison's most famous quotes, that being "tyranny of the majority." I used the term "tyranny of the minority". Hello? Do you understand the basis political science behind this? I simply do not understand your point about my investment objective. I don't understand what my investment objective has to do with this subject matter anyways.
E. As to "ZH may not be a political soapbox, but, then again, you use it quite regularly for it. " It seems to me that ZH is both a financial and political soapbox. I discuss as do most others on ZH, including the owners of this site, a number of financial and political matters. Sometimes they are separate from one another, sometimes mixed. I repeat (from this thread as well) that I am in the camp that "almost all politics is about who gets the money". In other words, it's pretty tough from where I sit to segregate politics and financial matters in the USA (or any other organized group of people for that matter).
F. As to "Thank you for propping up the system as it fails. So, my question would be, how can you logically support the status quote, in any way?" I don't support the status quo. I think the words I have typed on ZH show just the opposite.
Honestly, and I don't mean to be mean about it, I simply find your response disjointed. You certainly did not present an argument as noted in my response portion "A" above.
Touche. I genuinely appreciate your response - and I shouldn't just swing my keyboard around, late at night, heavily inebriated.
I'm just saying this doesn't work anymore. As for a logical argument...well, you have me, but if I were to get close it would be that I consider it illogical that GS can utilize government loans and then turn around and pay shareholders and bonuses. It's like buying (fixed-game) lottery tickets with food stamps. So I don't really feel one can make a logical counterargument in the first place - it's just another day in fiat-land. So, I agree with you that it's hypocritical, I just have to giggle when people think we have yet to reach the point-of-no-return. But until people hit the streets we may as well talk about it, and even add to our wealth - I can't fault your efforts, in fact, it's admirable if you actually do contact our 'elected' reps.
I consider it illogical that GS can utilize government loans and then turn around and pay shareholders and bonuses
I agree.
It was one thing during the Lehman crisis for the Fed to act to forestall the potentiality of a melt down, acting in their role of lender of last resort as statutorily enumerated, but quite another to keep the same flow of honey money going to the minority I mentioned and not taking the necessary steps to begin repair to the banking system, those steps having been enumerated by many others versus the current Fed/US Gov't policy.
"I'm just saying this doesn't work anymore"
It does still work in my view. However, we genuinely are in such an awful period right now that the frustration and anger level of Americans is quite high, continually rising, and they have become most impatient with the lack of progress combined with the comical attempt by the US gov't to spin things otherwise. Though America is infested with clueless people, there are more than enough to know that they are getting phucked by the financial oligarchy in concert with many elected officials.
I believe the powers that be in the US Congress, the US Executive branch and the financial crew are in panic mode right now as they understand the anger level of the citizenry and the risks going forward into 2010, 2011 are genuine and present the potential for peril.
I share your frustration, anger as I perceive it. I'm pissed off, very much so.
I do wish you the best.
Ditto, DH. You add a lot more to the situation than myself, so either way, thanks.
You are a 'gentleman'. Thank you for your insightful contributions. I have been reminded before, by another prolific and wonderful poster here at ZH, that I get off target. This is my 'favorite post of the day':
Merci beaucoup.
Class all around
Yeoman work deadhead. Thank you for your contributions
With munis, retiring non-callable debt early is done via escrow and the resulting securities are then termed 'pre-refunded'. No reason this could not be applied to any other obligation (although these days you may want a small CDS hedge on the escrow agent). Holy shit! A new product the squid overlooked! Oh, forgot, the squid is the only one with a pipeline to the couch potatoes' paychecks so they can retire debt.
Feudalism ftw...
Here's how I have it modeled:
The banks are feudal lords, the elected government is a weak (albeit pricey) monarchy, and the citizenry has been converted to serfs.
You're forgetting that little matter of the $13 billion GS stole via Hank Paulson and Ben Bernanke called the AIG bailout. Put that on the tab, with interest at 10%, since it was and remains a high-risk investment.
Plus there is that matter of having access to the Fed window called Cash For Crap. That has to end too.
Oh, and take back all of the sniveling littel traitors planted throughout the US and global governments.
Till then, no dice. And even then, no dice. Once bitten twice shy.
conviction buy list, secondary stock issuance, rating upgrades, HFT ramping, leveraged buyouts,one way derivatives (with included market manipulation), insider trading. do they do ANYTHING that is not criminal?
According to the GS reply, the TLGP issue is not callable.
Do you not think it's negotiable. A contract between GS and the Government not negotiable? TLGP could be callable tommorrow, and GS could have the check in the mail by Christmas.
Deadhead has made some outstanding contributions to this thread, and I hope most of you go back and read what he has to say a 2nd time. Excellent stuff, indeed.
I'm going to put my thoughts about GS as simple as I can:
(1) While their replies to Zero Hedge are very clever and-- on occasion-- insightful, nothing they said persuades me to trust them anymore than the day they became a bank and approached the Fed's discount window.
(2) While we're on the subject... now that the investment banks have averted disaster, their bank charters need to be taken away-- now.
(3) Goldman had the benefit of ex-CEO Hank Paulson being in office while the financial crisis became unwound. In the process, they became a hedge fund with Fed discount window privileges. And the bonus... they had the bond new issue business handed to them with the demise of Bear Stearns and Lehman. Hank made 'live or die' decisions to the sole benefit of an ex-employer.
(4) The AIG and TLGP handouts are well documented. The best way to earn trust is not to be hypocritical and claim you really didn't need them. If you want to say that-- fine-- pay them back. It's really that simple.
(5) Whether Goldman is a primary participant or not, I trade enough equities to know that there is something far from normal here, especially in index futures, ETFs, and select companies with crappy balance sheets. When I see activity I don't understand and many deviations appear from the norm-- I won't trade. Many of my colleagues say they won't either. While 'providing liquidity' is all well and good, Goldman and others stand to be more a part of the problem-- rather than someone to turn to for a solution.
And why is that? Because NO ONE TRUSTS YOU. And that's a huge problem... isn't it?
Absolultely spot on in regards numbers 1,2,3,4, and 5.
On #5, I've traded since the 80s and things are definitely not normal (unless one considers the dot com era where a P/E of triple figures was considered "value"".
The best part now for me is the banks.....it is such an obvious overkill of a full court press that virtually every bank has upgraded each other to super duper must have, must buy status, knowing full well that.....
FASB 157 has made a mockery of balance sheets (they are atrocious, pure and simple)...
regulators are looking the other way...
FASB 166/167 kicks in for Q1 2010....(FDIC just ruled, sans any media coverage, that they are giving a 6 month break on new capital necessitated by the Grand Cayman incoming tsunami of shit)...
the Fed has already approved re-writing CRE paper (with FDIC insured funds no less) with LTV's greater than 100%...absolutely irresponsible. the Fed is making subprime mortgage brokers/bankers look good here.
the business model of banking has changed in regards credit cards and fees. this is a forward looking matter. i would argue that the banks have significantly alienated their customer base and they are leaving or plan to. i don't care what anybody says, but once you phuck over your customer, you are phucked, and in my 30 year business career (all of it in financial services, 17 years in banking), I have never seen the American citizenry as pissed off at the banks as they are now.
..return of glass steagall anyone
Split them and break them.
U.S. Senators Propose Reinstating Glass-Steagall Act
http://www.bloomberg.com/apps/news?pid=20601103&sid=aQfRyxBZs5uc
Goldman’s Inner Conflicts Also Need Unraveling
http://www.bloomberg.com/apps/news?pid=20601039&sid=acB6gG_pifUY
Do you not think it's negotiable. A contract between GS and the Government not negotiable? TLGP could be callable tommorrow, and GS could have the check in the mail by Christmas.
Thanks for stating the obvious, Assetman. This poor GS refrain of "We'd pay it back if they'd let us" would be hilarious if people weren't ignoring the absurdity of that proposition. GS could easily do a work out--they wouldn't even need to bring in the PR Department to get that one done.
12) “Do you take fixed price positions?”
Please explain your question.
You must admit that is a loaded question. How about,
Are prices fixed?
or
Do you fix prices?
I have a scenario for Mr Viniar: I have no money, nobody will lend me money, but I was able to use my connections to get the Mr Viniar to guaranty that he'd pay back anybody who lent me $21B. Consequently several people lent me $21B only because they knew they would be paid back by Mr Viniar. I took the $21B and invested the money when every asset in the world was undervalued due to deleveraging and as a consequence made a quick $1T. Is it Mr Viniar's assertion that he wouldn't care that rather than paying back the initial $21B to the investors and letting Mr Viniar off the hook, I instead went and gave $20B to my kid and put the rest in my offshore accounts??
What say you Lucas? Any response to the allegations about Mr. Viniar's shell game detailed in the aforementioned by my colleague HEHEHE?
I do believe you have some 'splainin to do or are you too busy feeding The Squid?
"The fact that I haven’t necessarily addressed all your points shouldn’t be construed as tacit acceptance of any of them"... Think of it more as an explicit acceptance or inability to come up with an angle
Vielen Dank...
Remember those idiotic 'Terrorist' playing cards they where selling after 911?
Anyone made a deck of those with Goldman alumni on it yet?
My take on it is that GS is like CDC. All transactions go through Goldman and they take a little bit. A tithe'ing if you will. Praise the Lard.
I just want to say that everyone here should remember that as much as Goldman Sacks 'folks' bonus themselves for doing 'the lards work' , they don't bonus themselves quite as much as Creflo Dollar would given the chance.
-MobBarley
I love the deck of cards idea. not that we need to lynch them. but them knowing that lots of people know where to direct their bad vibes. how comfortable can the most hated man in america be.
I had a similar idea - seriously, it could make some money.
http://www.financialcrisiscards.com/
I am impressed they took the time to answer.
Now who am I impressed with - thats the question.
How about is the BRIC thesis a short squeeze tale or is it the real thing? LOL
What a bunch of insulting 'de minimus' answers - but some of them were funny!
You can't have fair value accounting and an independent printing press at the same time. I'm sure their core competency of risk analysis is 'chance of bloody revolt'.
We interrupt this program to bring you an important message:
RockBridge Commercial Bank, Atlanta GA (#134)
Cost to DIF: $124.2 Million
Now back to our regularly scheduled program.
Add on:
Independent Bankers' Bank Springfield IL, New South Federal Savings Bank Irondale AL, Citizens State Bank New Baltimore MI, Peoples First Community Bank Panama City FL,Sweet, I should be able to buy a 4 bedroom home for about $500 in Florida next year at this rate.
Ahhhh, to be rent & mortgage free. Glad I'm an irresponsible single guy :)
Son...I had no idea you were posting here.
This just in: 4 MORE BANKS FAIL (#135-#138)
People's First Community Bank, Panama City, FL - $556.7 million
Citizens State Bank, New Baltimore, MI - $76.6 million
New South Federal Savings Bank, Irondale, AL - $212.3 million
Independent Bankers' Bank, Springfield, IL - $68.4 million
TOTAL COST TO DIF TODAY (Includes RockBridge) = $1.038 BILLION
2 MORE BANKS FAIL TODAY (#139-#140)
Imperial Capital Bank, La Jolla, CA - $619.2 million
First Federal Bank of California, Santa Monica, CA - $146.3 million
TOTAL COST TO DIF TODAY (7 BANKS) = $1.804 BILLION
GoldmanSachs666.com
I have always believed that the economic crisis that began with the so called mortgage meltdown was a preplanned event. I now believe that the planner was Goldman Sachs. I could never understand how the meltdown occurred almost overnight. Markets just don't react to that extent that quickly. What drove the mortgage market was the securitization process which was driven by the bottomless pit of investors of all shapes and sizes world wide. As an insider in the mortgage industry, what I saw was that almost overnight that endless pit of worldwide investors disappeared. I said then and I say now, "who turned off the tap?"
Further more, Merrill Lynch, Bear Stearns and Lehman Brothers were the kingpins of mortgage backed securities and Goldman Sachs insured their MBS against failure with a little help and participation from AIG. All of them, I believe, were working in concert with then Treasury Secretary Paulson (former CEO of GS) and then Federal Reserve Bank of New York (FRENY) President, Timothy Geithner (current Treasury Secretary). Both played on the same team yet they wear different color uniforms - red and blue.
Being co conspirators to a failed economy by providing an even more failed bailout plan, these two most recent team members obviously have a team captain called Goldman Sachs not the people of the United States whose interests they are obliged to uphold.
It becomes even more apparent when you consider that the only surviving and prospering entity is Goldman Sachs. Paulson and Geithner orchestrated the demise of Merrill and reportedly forced Bank of America to acquire them. Of course ML's stockholders got wiped out in the process. They very specifically negotiated the demise of Bear Stearns by providing $55 billion to JP Morgan who in turn purchased Bear Stearns for $250 million, less then the market value of the Bear Stearns headquarters building. You should find it interesting also that the most prominent member of the board of FRENY is Jamie Dimon, CEO and Chairman of JP Morgan/Chase.
Then the demise of Lehman Brothers, a long time and hated rival of Goldman Sachs. They were simply allowed to fail and go away. Why? I suppose it is because they just did not want them around anymore in any way, shape, manor or form. Their arch rivals - gone.
Like on the TV program SURVIVOR - the last survivor standing is Goldman Sachs - who receives the grand prize. But in this case it is not just the fame and one million dollar prize. It is infamy with trillions of dollars in rewards.
If we are a country being held hostage by one of our own domestic corporations it would sound to me like this would be a treasonous act. One that should be investigated as any other person, group or government which causes harm to the United States. Our President and our Congress are constitutionally obligated to protect us. But they are not. Does that mean that Goldman Sachs tentacles reach into the White House and Congress? It seems so as I said earlier, their influence was evident throughout different administrations and different controlling political parties.
The dots are connecting. Goldman's apologies, lame efforts to offer up some money to small business and comments about being one of gods angels become comical if you look at the picture developing from connecting the dots.
We have said here before and I say again, Wake Up America. It is time we learn the truth and begin to correct and protect.
"I have always believed that the economic crisis that began with the so called mortgage meltdown was a preplanned event. I now believe that the planner was Goldman Sachs. I could never understand how the meltdown occurred almost overnight"
This is how it started, "Bear not trustworthy in the eyes of GS", the question from David Faber was a set up,
http://www.youtube.com/watch?v=bIWCwwn8JjI
the real question, is who are the SOB's behind goldman, and do they have dual citizenship.
+100
Brilliant Bingo
A preplanned event? That seems like a bit of a stretch.
Yeah, until you spend some time reviewing the phone logs and visitor schedules of Hank Paulson as Treasury Sec. It was just a coincidence that the GS board of directors just happened to be meeting in Russia at the same time that Hammerin' Hank was there on an "official visit?" And, no joke, his agenda actually says he met with the GS board to discuss what to do if Lehman blows up? Yeah, I guess I'm too cynical. I mean, subversive behavior is so passe', like when all of the banker assumed fake names on that fateful visit to Jekyll Island. WAKE. THE. PHUCK. UP.
Right in front of your eyes is a God's mark on Hanky Panky Paulson! Your eyes see it, take it in, and see not it predictive power.
That pinky finger is as crooked as could be devised, and Hanky flourished it time and again in front of all America as he was extolling the need for his vision of quelling the panic. History would like you to believe he was caught unawares, responding to a crisis moment by moment without a finely detailed counterplan. Bah! Setup-takedown.
"I have seen all the works that are done under the sun; and, behold, all is vanity and vexation of spirit.
That which is crooked cannot be made straight: and that which is wanting cannot be numbered."
The evil will have pleasure in their dark works for a season, but will not be upheld nor found upright in a final day. True equity is always restored. But a thief's substance is transitory, as is all ill-gotten gain. No support in the hour of need.
Not my words but will say this...
Any student of history of the early parts of last century knows that it has happened before...
To which I respond - SocGen and UBS were the largest buyers (if you still consider $100billion large) of CMBS's. Generally speaking, the Swiss are unable to imagine losing their house. Their house has been in their family for hundreds of years and they expect that they will leave it to their children's children. They have homes that are 600 years old, that look brand new. AAA tranche of sub-prime to them, meant AAA like Rabo Bank. They could not imagine that tens-of-millions of Americans would default on their mortgages. As such, when the news came out (I think NewCentury was the first sub-prime large lender to explode) - they stopped buying. At the same time, WaMu, Country Wide and Wachovia realized how exponentially f*cked they were; because they never expected the bonds to default in such large numbers (no refinancing houses when the national price is declining 1% per month). They all pulled their warehouse/conduit lines from the local "large" mortgage brokers on the same day (I know because my brother-in-law fired 450 people the day after). And then the sweater started unravelling.
IMO Goldman had nothing to do with that. They just realized earlier that the housing bubble was unsustainable.
What happened after Bear and Lehman is a totally different story. But the housing crash had more to do with UBS than with GS.
There is also the matter of the Bear put options. And massive naked short selling. Why didn't the SEC investigate?
http://www.bloomberg.com/apps/news?pid=20601109&refer=exclusive&sid=aGmG...
Whoever placed the bet used so-called put options that gave purchasers the right to sell 5.7 million Bear Stearns shares for $30 each and 165,000 shares for $25 apiece just nine days later, data compiled by Bloomberg show. That was less than half the $62.97 closing price in New York Stock Exchange composite trading on March 11. The buyers were confident the stock would crash.
``Even if I were the most bearish man on Earth, I can't imagine buying puts 50 percent below the price with just over a week to expiration,'' said Thomas Haugh, general partner of Chicago-based options trading firm PTI Securities & Futures LP. ``It's not even on the page of rational behavior, unless you know something.''
the sausage maker (GS) knew exactly how much fat and gristle was stuffed into each sausage (MBS, CDO, SIV) as it was being made....and knew the purchasers were gonna choke on them at some point. They just didn't give a flying fuck.
Good luck on that.
Until the crash, they will act and believe (manipulate) as if they control the game.
THEN, you can probably take them down.
By the way, I'm planning on going public on a company that sells pitchforks, Boiled rope, tar and feathers (feathers will be goose or pheasant for those especially festive occasions) .
Watch for the IPO.
Berlusconi Attack Spurs Souvenir Sales
http://thelede.blogs.nytimes.com/2009/12/18/berlusconi-attack-spurs-souv...
You are, of course, totally correct AnonymousMonetarist that the speed and intensity of the collapse is the result of a very successful strategic sting of America by Goldman.
You are also totally correct that they own the government and the elected officials from both parties who helped them set the sting. Goldman is like Don Corleone. They are the godfather of what is, "in my opinion" (as they say), Organized Crime.
They remind me of what Sollozzo said about Don Corleone and "all of those politicians that you carry around in your pocket, like so many nickels and dimes."
The deregulations took over a quarter of a century to get to the point where the activities that went down could go down but, if there was one act of deregulation that crystalized it all, it was Gramm, Leach, Bliley, the bill that eliminated the last big hurdle for them, the Glass Steagall Act. If you Google up all those who voted "Yea" for that bill in both the House and the Senate, you see the wide swath of "nickel and dimes Goldman has in it's pocket. Democrat, Republican, "liberal," "conservative" it amazing how many of them got into bed with each other on this one for the sake of their benefactor(s).
Democracy is an illusion. We are a Plutocracy. The two party system is a false choice. By the time you get to vote for anyone for Federal office, they are already owned. They already have benefactors who paid for their ticket to run and who they are beholden to. You, Mr. and Mrs. American middle-class, are not one of them.
Free Market Capitalism is an illusion. The rules do not exist for Goldman Sachs and the entities they need to survive.
While we are not, of course, just like the U.S.S.R., we are a damn sight closer to that form of central planning, central banking government than we are to the government most people think we have.
While the U.S.S.R. never had the prosperity the U.S. had, I don't think the U.S. will every have the prosperity going forward the U.S. had. We started deteriorating slowly and barely perceivably forty years ago to where we are now. At the same time, The Powers That Be have been transferring what wealth was left in the middle class to them. I think with this last scam, the biggest and most society changing one has occurred and by the time it is done we will be essentially the U.S.S.R.
It's the height of irony that the Cold War ends and not too long after that we end up a recreation of the type of government and society of the eliminated enemy
or. . .
maybe we really were all along. It just wasn't necessary to expose the invisible hand while the "enemy" existed.
"The deregulations took over a quarter of a century to get to the point where the activities that went down could go down but, if there was one act of deregulation that crystalized it all, it was Gramm, Leach, Bliley, the bill that eliminated the last big hurdle for them, the Glass Steagall Act."
You forgot the CFMA (Commodities Futures Moderniztion Act) that enabled and gave legal standing to Swaps and their evil spawn, Credit Default Swaps, without which risk could not be effectively and obfuscatorily transferred and magnified. Interest Rate Swaps are also integal to the fixed/floating rate toxic poison that have been foisted upon many municipal entities by the "salesmen" of the investment bankers.
Goldman and JP Morgan both clearly saw the potential, and they've put them to use toward their own benefit at the cost of the citizenry and taxpayers. I do not feel the least amount fo empathy for Harvard's endowment fund. I do for the ordinary citizen and taxpayer.
RICO Goldman & JP Morgan and then Anti-Trust and dismember all the TBTFs.
There are many bills and people who chipped away at the regulations over an approximately 25 year period under the guise of making the markets freeer who were actually setting up or aiding and abetting the fleecing of America by the few from the many.
My point was to take just one, a major one at that in this process, Gramm, Leach, Bliley, and show the wide swath of politicians of all stripes who voted for it because they were paid off by the banking lobby of which Goldman was the major contributor, to codify, i.e., make legal the scams that we are now being held hostage to pay for.
If the Paulson, Geithner, Bush et. al. (I'm not blaming them or the Republicans, they are the ones who were/are ones in the positions to make it all happen at the time it had to happen) felt there was absolutely no choice but, were really interested in what was best for masses of the people, they would have let these ibanks at the top go bankrupt, as a "free market" system demands, and concentrate on the mid to smaller banks who serve the people more but, can also syndicate to take care of big banking deals as long as those deals ultimately served the many.
We, The People, will spend generations paying off covering the these scams like CDOs, that made the few massive "High Yield" income because their set up was absolutely set up to fail, in order to keep these bankers who fleeced us, in power.
Like I said, we don't live in a democracy, we live in a Plutocracy very similar to what we hated about the U.S.S.R. We really always have, it's just that the events of the last 25 to 30 years culminating with what is happening now, has brought this truth into the light where Joe and Jane Sixpack, if they care to accept the truth, can see it for what it is. They will never have a "choice" via candidates in elections that will change that no matter what the candidates say they will do. Obama is my prime example on that one.
wake me up when the revolution starts
If you wait for someone else to wake you up, you are going to die in your sleep.
Oh, man, ever watch any Cameron or Fincher sci-fi? Waiting for arrival in cryosleep is a rough gamble.
The final Copenhagen draft agreement which was hammered out in the early hours of Friday morning includes provisions for a global tax on financial transactions that will be paid directly to the World Bank
I find a kindle of optimisim that Goldman felt compelled to respond. This is THE BEST financial site on the web and if we keep pushing they will be compelled to action. By they I mean our legislative and executive branches. They only clout bigger then the political influence of Goldman and Jamie Dimon is the power of the vote. If we get enough information out there and their inboxes fill up with irate and alert citizens they will act. Let's be real they understand how hard it is to replace a cushy government job complete with private air transporation in today's economy.
It isn't the system that is broke. What is broken is active citizenary.
Thank You a million times to Tyler, Marla and all contributors and commentors on ZH. You all ROCK.
"What is broken is active citizenary."
I implore all of you to pick up a copy of Democracy Inc. - Managed Democracy and the Specter of Inverted Totalitarianism, by Sheldon Wolin, a Princeton political science professor. He wrote about what we are experiencing, the melding of state and corporations, and the consequent impov the political power of the demos, the body politic, the People. Brilliant, and scary true in all particulars. A march on Washington by 20 million is the only solution.
It isn't "the only solution". It's not even a solution because it's not going to happen. 20 million people? Jeeeze. Get a grip.
Lets all hope you are wrong. Can't hurt to hope and believe it can happen. Certainly I don't seem to be at a loss finding people in all positions that fear where we are an what is comming.
People do seem to be awake, or waking up. I'm not sure that position is to far from deciding to meet at the capital.
Of course the problem here is, if this had allready happened, the main stream media would never report it. If it does happen the main stream media will not report it. And we've plenty of examples of very larges protests that the main stream media effectively wipes from history.
So there is this other issue of not only having an effective ptotest, but making sure everyone else knows it's happening, and leaving a solid mark on history. Like Amazon deleting Kindle purchasors copy of 1984 recently, the later is the double edge sword. We now have a medium, the internet, by which we can communicate as never before, but "history" can not only be rewritten, but it can be rewritten as it happens.
So everybody involved with such protests need to setup a web page anyplace, and post videos or at least pictures. In other world not only must the protest occur in the real world, but those involved should create and "electronic fingerprint" of the event in so many places across the internet that the event can't be wipped from history.
To sum up, Ron Paul frequently says how it only take about 6% of a population to create an unstoppable change. I'm sure that's still true, but I think it assumes a media that actually reports news versus creating news. So that 6% now has the additional burden to be it's own news/reporting force, but using the internet so difusely that there is no one place the "internet censors" can destroy on manipulate the evidience. And my experiance suggests there are far more that 6% with the right mindset now, now it's "just" about taking the next step effectively.
What is needed is a group the size of which cannot be denied.
No media quotes of "Oh it was just 200,000 angry unemployed..." or "former union members marched on Washington", etc.
It MUST be a massive group, so they cannot try to marginalize the accomplishment, the anger, or the diversity of legitimate claims.
No strongarm tactics will disperse 2 million plus. Can you imagine all the cellphones taking videos as Americans are being beaten or shot at? It would be on Twitter, or these other sites instantly, making it important to either NOT beat citizens, or TAKE DOWN the web, and censor it, as needed...
They had the military attack FORMER veterans who were protesting during the Great Depression. The vets were a great threat because of their organization and persistence, and were in complete disbelief the army was turned on them!
hahaha
Honestly, I think twenty million is an UNDERESTIMATE.
Alex, What is 295,000,000:5,000,000 please?
Can you say FIRING SQUAD, Mr/Mrs/Ms Lying Piece of Shit? Thought so.
Excellent work, Tyler.
Mark Pittman
We haven’t got to the bottom of this whole thing yet. Somebody’s going to do this big forensic—and it might be me!—somebody’s going to do the deep dive into how everything happened...
I'm going long Goldman and short the XLF, 1 to 1. Pretty sure I'll make money on that one.
Trading for clients, eh?
Would the US Govt / Fed be one their biggest clients?
My two favorite quotes from Mr. van Praag's response (there were many)...
- and -
To (1), I would reply...
To (2), I would reply...
It's a deviant mind indeed that can make those statements and claim to believe them. Probably a psychologist's gold mine.
BTW, it took less than 10 minutes to Google the links in this post. One wonders just how long the list of refutations would be if they came from someone who really wanted to demonstrate just how outrageous those two statements are? I mean, do you really want to taunt the public and the media into carefully dissecting the telephone calls, travel schedules, trades, and other forensic data surrounding the SEP '08 - MAR '09 period to see if there's a connection between, say, GS risk management and GS before-the-fact access to market-making information from government ad other officials? Really?
Lloyd Blankfein was the only private sector person with Paulson and the other gubberminites during the bailout talks.
There must be some fellow Deadheads at Goldman:
"...the sky was yellow and the sun was blue"
Yep, they can believe anything they want.
Sky is yellow.
Sun is blue.
We don't believe we have....gov't guarantees.
Down = Up, Lies = Truth, War = Peace
repeat as necessary until believed
If they're there, they sold out long ago. I doubt they even remember how good they felt when they first heard Scarlet Begonias.
Psychopaths don't really relate to concepts like truth, they simply say what works (for them). That is their "truth".
@Entrepreneur
Lulzasauras, bro, lulz! TD, put this in your response.
- and -
The lies can be repeated until you believe them. They'll keep repeating the same lies over and over trying to make them truth no matter what evidence shows up against it. To the risk argument they believe they are competent. They survived the risk and rewarded themselves the 14Billion. So it's TRUTH to them. When they fail they'll just chalk it up to messing with the wrong people or not using the right tactict at the right time.
The citizens of the United States are the WRONG people to mess with.
GS does it for the lulz
"The $352.2bn is the fair value of our trading assets, the vast majority of which consist of trading inventory we use to make markets for our clients."
I suspect that you can cause selling and buying pressure so severe on everyone else with these kinds of assets that you can control the markets, even create crashes when need be...
Right or wrong, a response like this is a wet dream for the creators of this site. I know some people who will be masturbating furiously tonight... besides me that is.
I know some of what their saying is false, but do you expect them to spill the beans and actually tell you whats going on. Our own politicians and government won't do that. I think they answered professionally and basically won that discussion. I think ZH could come up with a better questions but I don't think GS they will respond.
Answered, no; responded, yes. See above about relationship between lies and truth at their level. Our government is, as you correctly observe, no different. Same team, different uniforms. Different scum, same pond.
Good point. I can't believe they responded at all. Something stinks about it.
Rick...are you suggesting that lying in a professional manner vs. in a half ass amateurish fashion is the difference between a win and a loss?
morally no. In the business world unfortunately it is accepted. If I was in his position I would probably answer the same way, I want to think that I would'nt but most people probably would.
well Rick, you have to deal with your own self.
some of us have the stones to tell the truth, some of us don't.
if it is to be, it is up to me.
Easy to say unless there is a lot at stake. I don't have billions at stake and I don't have the advantages they have so I haven't been in that kind of situation. I do tell the truth but I haven't walked in their shoes is what I'm saying. What is their incentive to commit financial suicide by letting everything out of the bag? If they are in that position they probably have sacrificed their morals already. I am not on their side but think people have a lot of self righteous comments.
Actually it's bad business to destroy your brand. Contrast the GS response with Lee Iacocca's response when the gov't bailed Chrysler out. I think he is still regarded warmly by most, Goldman will never enjoy public trust and the damage to their goodwill continues unabated.
One could make the argument that they really aren't that smart.
Hey Goldman, I'm gonna do you a favor by offering you good counsel. Here goes: Express some gratitude for the unprecedented assistance you received from America and show some respect (even if you have to feign it) to the American people who's money you used in your hour of failure. It's no secret that you are free-market failures and would be as dead as Lehman if not given preferential treatment, express some thankfulness in any way you know how, if you don't know how, post back here, I'll give you some tips. But in pondering how you might express thankfulness, please remind yourself that you were road kill and by any free market measure you would be bankrupt today if the peeps didn't cover your dumb-asses.
Someone who got it right:
http://en.wikipedia.org/wiki/Lee_Iacocca
Yes I believe that would be good advice.
If Obama/Geithner/Bernanke/the federal courts would revoke Goldman's bank status (after all they were given this status without having to wait the requisite 30 days--absent that they WOULD HAVE COLLAPSED) that would go a long long way toward restoring confidence in our financial system. Until Goldman Sachs is bankrupted and no longer with us, this financial chaos will not end. Get a clue Democrats, lawyers, judges.
Yup. Until then it's spiraling down for the masses. These are extraordinary times. Ordinary efforts will produce more of the same - decline.
They really, really should heed what you have just stated.
Whatever GS is, they are not "dumb"-asses. They aren't going to show "gratitude" to "the peeps" because "the peeps" didn't cover anything of theirs at least, not by choice. "The peeps" are "marks," sheep to be sheered with the support of a "government" they own.
In any good con you "cool out the mark." No gratitude is just stupid, arrogant, and clueless.
GS does not give a rats ass what I think but here is a bit of it.
GOLDMAN SACHS IS NOT JUST UNAMERICAN, THEY ARE ANTI-AMERICAN. YOU FUCKERS ONLY CARE ABOUT MAKING MONEY AND NOTHING ELSE. GO AHEAD. LAUGH AT ME. AND WHILE YOU LAUGH, AND MAKE MONEY AT THE EXPENSE OF SO MANY PEOPLE, KNOW THAT YOU ARE PLANTING GROWING AND NURTURING A HATRED SO PROFOUND THAT IT WILL SNAP BACK ON YOUR ASS.
I want to say karma is like that, but karma is magical thinking. You don't need magic to get this. You will hurt or screw so many people that you can't keep track of it, keep a lid on it, or put the fires out fast enough.
I don't like everything about Chumba (too much tin foil baby) but he gets right to the point.
Goldman Sachs, I would curse you, but you are already cursed. Don't you get it? It's too fucking late. You are being sucked up in the vortex of the black hole your conduct has created. The choices you make to screw people is a sacrifice you have made that I can't explain to you because you are too far gone to get it. You are not human any more. And you don't get what that means.
Is this some of the feedback you think they were looking for? It would be wonderful to think even a lowly GS minion read this. Doubt it, but it still feels good to put it out there.
Here's "God's" plan. The people inside the city caring for each other the people outside the gate alone without ill will.
Here's reality. The gates getting hammered night and day. Anyone leaving it getting assaulted with psychotic rage.
All the zombie stuff in the collective conciousness isn't even close to what it's going to be like. It's giong to be so much worse than that. Karma doesn't exist with forgiveness. Once forgiveness disapears it'll come back in with a vengeance.
They don't want to back off. It's going to get ugly.
I wouldn't call it tin-foil-hattedness as much as it was really a case of having my eyes ripped wide open due to a couple small events over the past year, including the rape of Gaza and the gang rape of the American people by its banks and government, then setting forth on a journey to guage just how far down the rabbit hole went with my newfound vision, and perhaps (PERHAPS) found myself too deep and came back up a ways.
There is definitely something sinister afoot, my dear MsCreant, and don't think that just because it sounds like a conspiracy it isn't actually true. As they say, and as has been bourne out on many an occasion, truth is stranger than fiction.
Do not be fooled. This is war. This here is the modern day battlefield of the first shots of a war that is coming between us (currently the schlubs) and the banksters/government (let's call it The Corporation). What is happening is simply not going to pass. The tension in the air is palpable and growing and the breaking point is approaching.
This is war. You either get ready to fight or get out of the way.
I am Chumbawamba.
I just bought 51,000 puts on their favored client's prep school alma maters.
Tyler, well done. They answered those questions as any Congresscritter or bureaucrat would be expected.
Good work and I look forward to your response.
Here's my response:
A. Mr. GS, you must be mighty skerred to even answer questions you don't have to, of which there is zero benefit to you and of no business to anyone but you
B. You sell a product to a client and then short against it, you have zero integrity
C. Anyone who has an average degress of skill in finance knows most of what you blow is pure smoke
D. People and corporations are there actions, you took the money, became a bank holding company overnight, borrowed more from Mr. Buffet ( fwiw, I always assumed that was pure trading money to buy at the bottom, since who else would pay such a vig unless you knew the outcome )
E. Some people have good memories, and still wonder about the lost month in December of 08
F. Face Facts, you are the stick man, you see the order flow and take advantage of it, always.........
G. No one goes to jail when white collar crimes have mutliply layers and high priced lawyers and those who can follow a plan, thus, you folks will probably continue to do well, trying to convince others of what you are is futile, stick to your knitting, little white crimes in wait for the big one, rinse wash and repeat
Instead of all the vampire squid bs, how about refuting Goldmans responses with logical counter-argument.
I dont care for them either, but their responses seemed basically sound and kinda implied TD grasping at straws with little substance.
No fair getting served with logical responses and then abandon the original discourse in favor of emotionally charged insults.
At least they are responding like Steve Liesman did, and didnt call the insinuations childish tin-foil hat pandering.
Again, Im just making an observation and personally feel the vampire squid case has merit, but tar and feathering LLoyd, while a lot of fun, isnt where any meaningful change to the corrupt system lies, IMO.
Instead of all the vampire squid bs, how about refuting Goldmans responses with logical counter-argument.
I dont care for them either, but their responses seemed basically sound and kinda implied TD grasping at straws with little substance.
No fair getting served with logical responses and then abandon the original discourse in favor of emotionally charged insults.
At least they are responding like Steve Liesman did, and didnt call the insinuations childish tin-foil hat pandering.
Again, Im just making an observation and personally feel the vampire squid case has merit, but tar and feathering LLoyd, while a lot of fun, isnt where any meaningful change to the corrupt system lies, IMO.
I've listened to this drivel long enough. I, also, am a buy-side derivatives trader that deals with GS. GS makes their money through facilitating client flow for the naive (state pension funds, defined benefit pension funds, city & county, etc). Period. However, the key is HOW they facilitate this flow that matters. For example, if XYZ pension fund has a need to hedge something, GS will be happy to provide guaranteed 'liquidity' at a price (and these naive clients have no clue on how bad they're getting ripped off because it's all "baked in the spread.")
For example, if XYZ wants to hedge exposure to the SPX, for example, GS will quote a market. GS will trade around that market regardless of whether they have the order. Information rules. Call it whatever you like. They're connected. They're smarter than the rest of the Street and the brightest minds either work at GS or have left to launch hedge funds. The list is long.
In the holy grail of a "free market" this could never happen. Goldman, JPM and their ilk operate in a tightly-reigned oligopoly and therefore need to be BUSTED UP. Real competition would kill Goldman.
All of these specific refutations are nice, but how do we get rid of this parasite? Don't want to argue with them - just want em gone.
Describe a silver stake which might work.
The bankster doth respond too much, methinks.
Similar to their SEIU statement.
For the smartest folks in the room they seem to be unawares of the grenade theory.
Walk into a room that has a live grenade and the only upside is that you get out without it going off.
So don't walk into the room.
Goldie won't win any converts here ...
So why respond?
Do the employees of Goldman Sachs realize that the idiot general public is actually pointing in the direction of their firm now? You are talking about a hundred hours of TV watching, carbohydrate stuffing, fat belly over the belt hanging, alcohol soaked, public school educated, dominant wife having, over-indebted, state lottery playing, slob of wasted space actually dropping their Cheeto eating jaw in complete horror of what their company is doing right out in the public. The finger is being pointed at their firm from the simple fact that any particular “problem” that exists in our economy seems to have Goldman Sachs as an involved party. Beyond the simple guilty by association to said “problems”, Goldman Sachs happens to have a very direct line to whom is making the rules in Washington and those Legislative Branch employees’ careers and livelihood. We can see the influence and debauchery right in front of our eyes. No longer though gentlemen, many more are eyes seeing the first time.
Now, I am not one to be into all of that financial jargon some will sling around in their own defense like possessed little monkeys, but I sure as hell can smell a stinking pile of shit a mile away. Slowly, the veil is indeed being lifted from the eyes of the average Joe Schmuck. No amount of Wall Street slang is going to divert the attention away from their firm at this point. They might want to consider changing their firm’s name like AIG did. It might buy them some time from the awakening of a couple hundred thousand more slobs of apathy and pent up frustration.
Times are a changing and a mass political awakening has been brewing. They should enjoy their coke and cock binges while they can. Their lies are no longer working. It is quite fun watching them spin their wheels to keep the game going. It provides me with great entertainment. I didn’t realize living without a soul was actually possible, but I guess vampires and zombies have this ability.
Adam Smith didn't say greed is good. He argued that in a free market, the desire of individuals to succeed benefits the entire society.
When a few individuals try to fleece the rest of society, they will only do so for so long.
The key words are "free market."
In a free market, none of these banks would have done what they did because they would go bankrupt or closed down and the officers and other employees put in jail for various forms of fraud or, if you want to take the tack that they really didn't know what they had wrought until it collapsed. In a free market, they would have gone bankrupt and their officers and other employees would have gone to jail for, however you look at it, fraud.
There are actually three keys. Individual aspirations, the markets and social benefits. The market is the context in which society provides for competition. Too much regulation and you have North Korea. Too little and you have Somalia. The bankers are going to be their own worst enemy. If the public guarantees the currency, it's a form of public utility. Since the banksters cannot be trusted to manage it, it will eventually become a public function. Probably at the state level, since the Federal government is so complicit. It's not a question of changing the current system, since it is effectively bankrupt, but rebuilding a new one. The longer this system is propped up, the more destructive the collapse will be.
I'm following you in this vein, brodix. I would hope to see the Feds only as a referee between states, and never actively involved. The centralization of power comes too quickly once the masses forget the taste of freedom.
I would call up the Pope to canonize this, but I'm not Catholic, and good stuff like this doesn't need official approval - it's within every human being, often buried by unnecessary discouragement or squid-like psychopathy.
What's wrong with (almost) everyone here? GS is playing by the rules as everyone else. Sure, they've got better connections in the administration but don't blame GS for getting special treatment, blame the corrupt/stupid/etc politicians.
GS is just trying to maximize shareholder value, as they are supposed to.
But unless GS moves their CDS levels inside the market, I'll continue trading with the rest of the street...
GS is toying with Obama/Dodd/Frank and inside buddies, they could diffuse a tremendous amount of political fallout by employing a smart PR firm. I don't think anyone on the inside of GS has the capacity to do anything but further damage to its image/brand. It's pretty much a psychopathic organization incapable of expertise in anything beyond predatory behavior.
and how is GS different from MS/JPM etc? they're all playing the same game. some are better some are worse at it. none should have gotten government aid etc. in the way they did.
They are all free market failures sucking on the gov't teat, GS just left more fingerprints behind after the heist.
Verbal Kint:
maximize shareholder value?
My rough calculations are that the dividends paid out to shareholders is around $730 million. The bonus pool was expected to be $16-21 billion.
Personally, I don't understand why anyone would own shares of a company with that kind of hypocrisy. They very obviously care very little about their shareholders.
Eric, how can you judge a company by the level of dividends? Any thoughts on GOOG? They've never paid a dividend and do not expect to pay one for the foreseeable future.
Ultimately, the ability to pay cash dividends is EXACTLY how a company should be judged. Why? Because it's a real cash return on investment. That became a real important item in the last US depressionary period. You might want to bone up on it.
GOOG is a interesting company that does have the ability to pay a dividend. However, they have gained the trust of many investors and have reinvested that cash into intiatives that continue to grow. If somday, excess cash is generated, GOOG may buy back shares and shareholders would benefit-- or GOOG will invest unwisely and investors would lose trust.
Goldman has lost the trust of it's investors and like its client base. Sure, they are making money... but a lot of it goes into bonuses. And this, shortly after getting government subsidies... oh... and issuing stock to the American people and Warren Buffett (with the latter getting the much better deal).
I'd gather, in a twisted way, we can judge Goldman just like we can any company generating an earnings stream. But it's almost impossible for me to imagine that I could trust Goldman to give their money back to their shareholders.
To be quite honest, Goldman should have remained a limited partnership rather than going public. But issuing shares and granting excutive stock options can be really hard things to wean away from once you used them.
I am really curious how this chart relates to your statement of GS having lost its investors trust. http://finance.yahoo.com/q/ta?s=GS&t=1y&l=on&z=m&q=l&p=&a=&c=
Textbook definition of a market requires many buyers and many sellers. Goldman controls far too much in the financial/ stock arena and must be broken up, along with their colluding "competitors".
Goldman and their political minions are the modern day version of Mother England blithely dictating terms to the underclass of ungrateful peasants.
Why it must be the truth, for Goldman has stated it so....
The truth will need to be cut out of this stinking monster and it will not be cut out easily. Look to the sewage Bernanke has bought from these guys (of course, they don't want the American public to know, because they will all lose their heads). Look into and unearth all the off-shore bank accounts to find where the real money and gold is hidden. And look to the current absurd accounting, which at one time the FASB dared call accounting "principles".
Some prescient ZH'r stated that our political masters would rather see the country fail before Goldman- and I believe this to be true.
Until and unless the many heads of this monster are chopped off, then this country is doomed to failure. A country cannot survive from skimming, for what will be left for these myopic idiots to skim from ???
Fellow Americans there has been a coup. Crony capitalists goldmann sachs have put their manchurian candidate Barry Sotello in the White House it is time to rise up !!!!!! BRING IT ALL DOWN MAN
You are thinking of Barry Soetoro.
There has been a coup, but it has been a steady, ongoing effort.
Watch the tv series V, it shows you glimpses of the truth.
Split them and then break them. All of them.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aYfTHXGX1zIU
“We cruise along for 80 years without a major calamity infecting the entire financial system and then less than eight years after the repeal of Glass-Steagall we have a financial meltdown in this country,” Camden Fine, president of the Washington-based trade group for about 5,000 smaller U.S. banks, said in a telephone interview. “That’s no accident.”
"prop investing"; is that defined as the Goldman investments, such as the 10% of Burger King or the 15% of Geely ?
Of course there is no mention of how much of the Goldman revenue comes from so-called market making trading, (puleeeze don't tell me how risky that is).
While we are reading this drivel from Goldman, they are forging ahead with their next bazillion dollar scam which is cap-and-trade.
How much funding did Goldman provide for the Global Warming crowd? How many ex-Goldmanites are now working for not-for-profit environmental companies/governments pimping for cap-and-trade?
+++ Good point on cap and trade. A total fleecing by the interested parties (capping and trading facilitators).
A simple carbon-tax would work 10x better but it not supported because it benefits no special interests.
Sad. But actually a political problem.
I have a message for you Mr. Van Praag.
If this was my country; you would be in prison, or worse.
And the thing is....
This is my country, and there are a whole lot of people just like me.
I hope this dangerous game you are playing with our Republic turns out well for you, because, if not....
Well, then you are in a fair amount of trouble amigo. Lucas van Praag. Nope, there will be no forgetting you.
There is this other thing too, that's been bothering me. Where the fuck do you get off that your so called bank is scot free of the government's interest, and can pay your aristocrat employees whatever you want? Hmmm? Tell me how when we paid your bitch asses 100 PERCENT on AIG's swaps. Have you paid back that back? Your company only now has life because of corruption among the Peoples' elected representatives.
Usury is a sin on the order of slavery. Your corporation/bank, and other companies/banks like yours, are rapiing this country. Do you think people don't know it? We know your words are poison lies. The gig is up. The People, will, come for you one way or the other. I suppose you can't hear the psychic scream in middle America right now? I pity you sir.
GS, we gave you billions of dollars through the AIG scam that you comitted. That is your bonus pool. You are thieves. No amount of risk management changes that. It is hard to imagine that you are the same assholes who also promote carbon tax and trade scams and endless wars for the gain of you and your friends. Whether we have a deflation or inflation catastrophe ahead, we will be waiting for you people.
If god is on your side, who can be against you. Belteshazzar and Shadrach had to pass through den of lions and fiery furnaces but come through whole, pure on the "other side".
Not so for thieves, plunderers, mercenaries of evil kings. Lie with dogs, gets the fleas. And forget not the host of pollutions which attach themselves to your "shadow man". Those black spots will be like millstones about the neck when cast into the coming sea. "What man, for one sweet grape, would the vine destroy? Or but to touch the crown, would with the sceptre straight, be strucken down?"
The golden coin of ill-gotten gain will be forged in the chains you must wear in the stage-to-come when the earth invites you to nap.
Jacob Marley can come to warn even such a material, urbane, supremely confident fool as GS.
"Oh! But he was a tight-fisted hand at the grind-stone, Scrooge! a squeezing, wrenching, grasping, scraping, clutching, covetous, old sinner! Hard and sharp as flint, from which no steel had ever struck out generous fire; secret, and self-contained, and solitary as an oyster. The cold within him froze his old features, nipped his pointed nose, shriveled his cheek, stiffened his gait; made his eyes red, his thin lips blue and spoke out shrewdly in his grating voice. A frosty rime was on his head, and on his eyebrows, and his wiry chin. He carried his own low temperature always about with him; he iced his office in the dogdays; and didn't thaw it one degree at Christmas."
Merry Christmas, sorry could offer the franken-insensed and Demyrrh.
"Who is this coming up from the wilderness
Like palm-trees of smoke,
Perfumed with myrrh and frankincense,
From every powder of the merchant?"
Initially, I find it utterly absurd that any executive from GS would consider responding to any web site, this one or any other. Not because of the content or intellect, it just flies in the manner of distinguished business practice. But, I guess this is the new distinguished.
I don't want to date myself, but I go back to a day when Kidder, Peabody and Co was a BSD in the MBS market. And the erosion of competition has been occurring since that time. We once had over 32 Primary Dealers, they've been dropping like flies since I first hedged my first specified pool of GNMA speed bonds vs. the 7 year. I called it then, the MBS market, the most biggest, illiquid market in the world. It has only become worse and more esoteric since the days of Louis G.
I have also worked in equities and on the option floors, washing money for drug dealers in Europe. And the point and bottom line to all of this drivel, is that GS can say, and most likely prove whatever they want their trading blotters to say, as on the surface, one side of the room may have no clue as to what the other side is doing. And then again, maybe it does. Are we trading for the customer? Are we trading for sales credits? Are the traders pads all independent P n L's? Doesn't really matter. They can make it look however it's needed to appear.
Here it is in a nutshell, "Where are the customers yaghts?"
As an old MBS trader, of specified's and generic spreads, it was very, very hard to get stuff done with GS and Co, Solly, First Boston and of those type firms, as their pricing was too used to jamming it down fund managers throats. Now why was this? Simple, the size some of these funds needed to trade in basically precluded many others from competeing for the business. I saw business devolve from eating an entire order on the "wire", to having to buy 10% to work the balance. A prop that would've gotten you laughed off the floor when I first started trading.
Now there is basically no one left. So if you screw GS on the equity side, good luck getting out of your esoteric junk bonds, or LEAPS or whatever? So GS has basically reduced the market to it's all an agency trade for them in many respects. People always focus on the most liquid items, but that is not where the money is made, as GS points out in their answer #4. This is where the real thievery is occurring. I used to due battle with a trader at Solly over who controlled Sallie Mae Wts, there were 9 of us in the box, but if you needed to trade them, only 2 of us you could call. Him or me. We had the 2 best analysts on the street, hence we had the only buyers of the issue. So where were those warrants going to trade? Where ever we said they were. Never mind the quote, stock ahead.
Basically, this is what GS has reduced the majority of the market to. I cannot even imagine how corrupted the Farm Critter market has become, or any other of off the run issues. Who's left that can afford to carry the inventory. Answer, few if any. Basically, GS has done to the financial market, what Congress did for Major League Baseball.
Merry Christmas to all.
>[...] I find it utterly absurd that any executive from GS
>would consider responding to any web site, this one or any
>other.
I find it refreshing that there is justified fear of the power of the internet. I just wish there were a lot more websites for GS, and their peers, to live in fear of ... Fear of the masses knowing the full truth, about financial games that were previously impossible for the masses to track or understand.
Which is why the internet freedom itself will be attacked next .... I'm in the internet industry, it's clearly been setup for the last year or so. And it'd be impossible for me to explain it at this point for the same reason folks previous could not understand the inner working of the financial markets (which I'm doing my best to learn about now).
Next year everyone must stay very alert to pricing changes of any kind related to the internet, or domain names registrations. Everything is setting up for this to happen next year, or just after the initial deployment of "new TLDs" schedualed next year. If it is successful, 1984 will be upon us in no time.
I agree. I would like to know a lot more about this and if you can provide some links or additional insight in the discussion forum regarding this subject I would greatly appreciate it.....I heard about Internet 2 coming a few years back in which the govt would force all traffic over to a completely monitored and controlled network......and as you likely know Sen. Rock-a-Fella was quoted saying the Internet was a mistake. Thanks!
If GS thinks they have Mugabe Jr. on their side, they are in for a big surprise. Just wait and see what commies do to their sugar daddies.
I'm just a dumb carpenter who knows nothing about GS and etc but i think this blog is a tad more interesting than csi:miami.
To me, GS is the financial division of the CIA. When Blankfein says he's "doing God's work", he just means that his 350 Bil is at the service of the USA to: hold down the price of gold, tweak long-term interest rates, prop up the Dow, fight off the Chinese, the Russian, the Germans, the Saudis and whoever else may challenge the US world hegemony.
But what do I know?
You nailed it.
Also, who doesn't understand yet that AIG = CIA?
Look at the founder, look at the people who've run it:
The Secret (Insurance) Agent Men
http://articles.latimes.com/2000/sep/22/news/mn-25118
Explains a lot, doesn't it?
Agree. One small clarification. We live in the USI, not the USA.
Time for the Ma Bell treatment. But first, seize n search all the hard drives. Hard time is in order in the new, extra-pissed-off America.
The only question is, do we have to replace both crapped-out political parties to get at these turkeys?
It's as easy as a drug raid. Could be over by 10 AM Monday.
Vampire Squid T-shirt for sale on Ebay
http://cgi.ebay.com/Vampire-Squid-T-shirt_W0QQitemZ300379010691QQcmdZVie...
Then what you are saying very directly DrExcitement is that this is untouchable by all the normal means such as regulations, laws, or outright bribery. Is that what you are saying???
If so then there is only one answer, and that is exactly what is proposed in "Project Mayhem".
If all the doors are closed, and there is no accountability, and everything is a rigged game, then it is in reality time for violence.
Nothing else is going to solve it, and the politicians are in their pockets.
The most corrupt area of the business when I started was the "Muni Bond Trading Desk". And yes, the inmates basically run the asylum, and have for quite sometime. For a while in the 80's, 90's through the dot com bubble, it was looked at with a nod and a wink. And there were enough firms left on the street where if one was disenfranchised, you go to another shop. Now there have been so many displaced, without anywhere to go, or really a marketable skill, (one of the old jokes was how come there are so many english majors on wall st) except to look at screens at home and trade a bit, the real truth is being slowly let out of the bag.
I was working on a rather large West Coast OTC equity desk during the big one, and the retort on the trading floor from the partner in charge of trading was, "the next one who answers the phone is fired!", and I'm sure that was standard practice that day, it's the only way a market can fall that far that fast, is to stop answering the phone and keep lowering the bids, hit or not.
"on a long enough, (or short enough) time line the survial rate for everyone/thing drops to zero".
It is probably never going to reach the violence stage, as the end game will be just simply that. No different than North Korea, turn in your money.
The financial world is too big, too fast and too complex for your under staffed SEC, FBI or whoever to catch everyone. And if you understand the system, or as in GS's case, own or control the system, there are just too many transactions moving far too quickly to catch. It was the basis for the scam that I worked for that had a presense on every options floor in the country. we hid in plain sight. provided liquidy in a large amount. and no one was the wiser. it took me about 6 months to figure out exactly what was occurring, and my background was from the mailroom up. very street smart and savy. or so I thought.
The real too big to fail, is GS. And there was a time during the Long Term Capital crisis, GS wasn't even really a player in MBS back in those days, that they were brought to their knees, and had to reach outside the firm and bring in, OMG, Japanese money... I think they learned some very hard lessons then, because it has been a merciless climb ever since.
I am afraid, we've allowed ourselves as a country to get in so deep, that we have to trust GS to unwind the trade, as they are the only one's who know where the bones are buried I'm afraid.