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The Goldman Grift Shows How Greece Got Got

Reggie Middleton's picture




 

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Greece will burn economically because of financially engineered, grifted ways and it most definitely will not be the only country in the EZ to do so. I have made this unequivocally clear since February of 2010, over two years ago -reference the Coming Pan-European Sovereign Debt Crisis.

So who is responsible for such a potentially cataclysmic event and what can be done about it? Well, amazingly, I'll answer it all in one post by combining a little reporting with some hardcore, truly objective, independent financial analysis. Ahhh, I love this new media blogging thingy! From Bloomberg:

Goldman Secret Greece Loan Reveals Two Sinners

Greece’s secret loan from Goldman Sachs Group Inc. (GS) was a costly mistake from the start.

You know, one sentence into this Bloomberg piece it already smacks of realism simply by indicating it was a mistake for an unsophisticated party to do business with Goldman. It's a damn shame that such a statement can be so believable on its face without even an ounce of justification provided yet. It goes to show you exactly how many feel, deep down, Goldman actually manages to outperform. It takes money from the foolish, as opposed to earning it by being the so called best of the best. It is the best, but the best had marketing and grifting - not necessarily engineering the best solution for its clients. You see, most of the time the best solution for your clients are antithetical to both your bonus pool and margin expansion.

On the day the 2001 deal was struck, the government owed the bank about 600 million euros ($793 million) more than the 2.8 billion euros it borrowed, said Spyros Papanicolaou, who took over the country’s debt-management agency in 2005. By then, the price of the transaction, a derivative that disguised the loan and that Goldman Sachs persuaded Greece not to test with competitors, had almost doubled to 5.1 billion euros, he said.

I hate to say it, but if you're foolish enough to listen to the most profitable bank tell you not to say thing to anybody else about said deal, then you may deserve what's coming to you. If there are any sovereigns or any other entities reading this and you find yourself in a similar situation, I suggest yousimply contact me. For those who aren't familiar with me and my ability to sniff things such as these out, I urge you to ask the question,Who is Reggie Middleton?I'll independently review the deal for you and give you the T-R-U-T-H! You know, its been a while since I've seen that word in articles such as these. Another damn shame. There should be plenty of opportunity for me to discuss this, for Greece is definitely not the only European entity to be diagnosed with a chronic case of Goldman's financially engineered derivative product indigestion, referenceSmoking Swap Guns Are Beginning to Litter EuroLand, Sovereign Debt Buyer Beware!  So, I'll be looking forward to hearing from, and visiting you France, Spain, Italy, Portugal, Ireland, Belgium...

Papanicolaou and his predecessor, Christoforos Sardelis, revealing details for the first time of a contract that helped Greece mask its growing sovereign debt to meet European Union requirements, said the country didn’t understand what it was buying and was ill-equipped to judge the risks or costs.

“The Goldman Sachs deal is a very sexy story between two sinners,” Sardelis, who oversaw the swap as head of Greece’s Public Debt Management Agency from 1999 through 2004, said in an interview.

Righhhhht!!! Two sinners... How about an orgy in an economic brothel where financial syphilis was being passed around by the pimp who told all of the excited teenage boys who were about to get their cherry popped that they didn't need condoms, those little rubber things were for wimps. BTW, those pimply faced teenage boys who were convinced to get down without their intellectual/economic prophylactics had a much more diverse selection of accents than this story may lead one to believe - as excerpted from Smoking Swap Guns...

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Moreover, one of the key reasons why such manipulations continued is the apparent ignorance of the EU's Eurostat, which knew enough about these deals to tighten the rules governing their accounting-albeit only after they had served their purpose - the Ponzi! When Italy's then-Prime Minister Romano Prodi miraculously achieved a four-percentage-point improvement in Italy's budget deficit in time to usher the country into the common currency, Italy's use of accounting gimmicks was widely discussed, and then promptly ignored. As at that time, everyone was only too eager to look the other way in the drive to get the single currency up and running.

It wasn't until 2008-a decade after the deals became popular-that Eurostat was able to revise its rules to push countries to include swaps in their debt and deficit calculations. Still, till date too little is known about countries' continued exposure to the deals that are already out there.

Overall, though there is less evidence to support that there are more such swap deals that happened during the late 90's till early part of this decade, the data below showing a sharp decline in interest payments as a percentage of GDP particularly for Belgium (apart from Greece and Italy), hints that there are considerably more of these deals to be discovered. The questions is, will they be discovered before or after the respective sovereign issues record debt to the suckers sovereign fixed income investors.

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Notice the extremely supercalifragilisticexpealidocious reductions Belgium, Greece and Italy have made in their interest payments from 1993 to 2000 in this graphic made pre-2000. If one didn't know better, one would have thought theses countries actually used magic to make such reductions. Italy practically cut their debt service (projected, of course) in half. It really makes one wonder. I'm just saying...

BoomBustBlog subscribers (clickhere to subscribe) are welcome to download our contagion models which have been quite accurate thus far in mapping out where this has, and quite likely will lead us.

In Contagion Should Be The MSM Word Du Jour, Not Bailouts and Definitely Not Greece! I included sample output fromthe Model detailing the various paths of contagion that can be taken given default by "XYZ" country..

thumb_Sovereign_Contagion_Model_-_Pro__Institutional_demonstration_of_Greek_default

And back to the Bloomberg article...

Goldman Sachs’s instant gain on the transaction illustrates the dangers to clients who engage in complex, tailored trades that lack comparable market prices and whose fees aren’t disclosed. Harvard UniversityAlabama’s Jefferson County and the German city of Pforzheim all have found themselves on the losing end of the one-of-a-kind private deals typically pitched to them by securities firms as means to improve their finances.

Goldman Sachs DNA

“Like the municipalities, Greece is just another example of a poorly governed client that got taken apart,” Satyajit Das, a risk consultant and author of “Extreme Money: Masters of the Universe and the Cult of Risk,” said in a phone interview. “These trades are structured not to be unwound, and Goldman is ruthless about ensuring that its interests aren't compromised -- it’s part of the DNA of that organization.”

Nawwww!!!  It can't be! Say it "Ain't True!" For those who haven't seen this VPRO special on how Goldman Sachs looted European countries years ago, it is literally a must see. The mayor of a small Italian village speaks candidly and openly to the audience. All it really takes is to hear it from the horse's mouth. If that's not good enough, you can always hear my 15 minute contribution, or that of Simon Johnson, or even Matt Taibbi. Yes, it's all here, complete with English translations where necessary.

A gain of 600 million euros represents about 12 percent of the $6.35 billion in revenue Goldman Sachs reported for trading and principal investments in 2001, a business segment that includes the bank’s fixed-income, currencies and commodities division, which arranged the trade and posted record sales that year. The unit, then run by Lloyd C. Blankfein, 57, now the New York-based bank’s chairman and chief executive officer, also went on to post record quarterly revenue the following year.

So Greece helped "grease' the FICC bonus pool under Lord Lloyd, eventually catapulting him up to the CEO position. Hmmm... Of course, you don't get something for nothing. Methinks Goldman et. al. may have a couple of bones stuffed up into thier closet as well. Speaking of FICC, reference this excerpt fromSo, When Does 3+5=4? When You Aggregate A Bunch Of Risky Banks & Then Pretend That You Didn't?...

Banks exposure to interest rate and foreign exchange contracts

Withvolatility in currency markets exploding to astounding levels (with average EUR-USD volatility of 16.5% over the past year (September 2008-09) compared to 8.9%  over the previous year),commercial and investment banks trading revenues are expected to remain highly unpredictable. This, coupled with huge Forex and Interest rate derivative exposure for major commercial banks, could trigger a wave of losses in the event of significant market disruptions - or a race to the exit door of this speculative carry trade. Additionally most of these Forex and Interest rate contracts are over-the-contract (OTC) contracts with 96.2% of total derivative contracts being traded as OTC. This means no central clearing, no standardization in contracts, the potential for extreme opacity in pricing, diversity in valuation as well as a dearth of liquidity when it is most needed - at the time when everyone is looking to exit. Goldman Sachs has the largest OTC traded contracts with 98.5% of its derivative contracts traded over the counter. With the 5 largest banks representing 97% of the total banking industry notional amount of derivatives and most of these contracts being traded off exchange, the effectiveness of derivatives as a hedging instrument raises serious questions since most of these banks are counterparty to one another in one very small, very tight circle (see the free article, "As the markets climb on top of one big, incestuous pool of concentrated risk... ").

bank_ficc_otc_exposure_and_currency_volatility.png

The table below compares interest rate contracts and foreign exchange contracts for JPM, GS, Citi, BAC and WFC.

JP Morgan has the largest exposure in terms of notional value with $64,604 trillion of notional value of interest rate contracts and $6,977 trillion of notional value of foreign exchange contracts. In terms of actual risk exposure measured by gross derivative exposure before netting of counterparties, JP Morgan with $1,798 bn of gross derivative receivable, or 21.7x of tangible equity, has the largest gross derivative risk exposure followed by Bank of America ($1,760 bn, or 18.1x). Bank of America with $1,393 bn of gross derivatives relating to interest rate has the highest exposure towards interest rate sensitivity while JP Morgan with $154 bn of Foreign exchange contracts has the highest exposure from currency volatility. We have explored this in forensic detail for subscribers, and have offered a free preview for visitors to the blog: (JPM Public Excerpt of Forensic Analysis SubscriptionJPM Public Excerpt of Forensic Analysis Subscription 2009-09-18 00:56:22 488.64 Kb), which is free to download, andFile Icon JPM Report (Subscription-only) Final - Professional, orFile Icon JPM Forensic Report (Subscription-only) Final- Retailas well as a free blog article on BAC off balance sheet exposureIf a Bubble Bubble Bursts Off Balance Sheet, Will Anyone Be There to Hear It?: Pt 3 - BAC).

bank_ficc_otc_exposure_jpm.png

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Cute graphic above, eh? There is plenty of this in the public preview. When considering the staggering level of derivatives employed by JPM, it is frightening to even consider the fact thatthe quality of JPM's derivative exposure is even worse than Bear Stearns and Lehman‘s derivative portfolio just prior to their fall.Total net derivative exposure rated below BBB and below for JP Morgan currently stands at 35.4% while the same stood at 17.0% for Bear Stearns (February 2008) and 9.2% for Lehman (May 2008). We all know what happened to Bear Stearns and Lehman Brothers, don't we??? I warned all about Bear Stearns (Is this the Breaking of the Bear?: On Sunday, 27 January 2008) and Lehman ("Is Lehman really a lemming in disguise?": On February 20th, 2008) months before their collapse by taking a close, unbiased look at their balance sheet.

bank_ficc_otc_exposure_bac_and_gs.pngbank_ficc_otc_exposure_bac_and_gs.png

Subscribers, seeWFC Research Note Sep 2009 WFC Research Note Sep 2009 2009-09-30 13:01:30 281.29 Kb, ~WFC Off Balance Sheet Exposure WFC Off Balance Sheet Exposure 2009-10-19 04:25:53 258.77 Kb~WFC Investment Note 22 May 09 - Retail WFC Investment Note 22 May 09 - Retail 2009-05-27 01:55:50 554.15 Kb~WFC Investment Note 22 May 09 - Pro WFC Investment Note 22 May 09 - Pro 2009-05-27 01:56:54 853.53 Kb~Wells Fargo ABS Inventory Wells Fargo ABS Inventory 2008-08-30 06:40:27 798.22 Kb

Of course, this article is about Goldman right? In addition, exposure doesn't necessarily mean that the  shit will it the fan, right? After all, it's different this time!!!

The interest rate storm is coming, that is unless Europe can maintain historically low rates as several countries default. Then again, they never default, right...

Don't believe me, let's look at history...

Again, click the little pics to make big pics...

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So, as I was saying...

Hunting the Squid, Part2: Since When Is Enough Derivative Exposure To Blow Up The World Something To Be Ignored?

Hunting the Squid, Part2: Since When Is Enough Derivative Exposure To Blow Up The World Something To Be Ignored?

Goldman is much more highly leveraged into the derivatives trade than ANY and ALL of its peers as to actually be difficult to chart. That stalk representing Goldman's risk relative to EVERY OTHER banks is damn near phallic in stature!

Click those little pictures to make BIG pictures....

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As opined earlier through the links "The Next Step in the Bank Implosion Cycle???"and As the markets climb on top of one big, incestuous pool of concentrated risk... , this is not a new phenomenon. Quite to the contrary, it has been a constant trend through the bubble, and amazingly enough even through the crash as banks have actually ratcheted up risk and assets in a blind race to become TBTF (to big to fail), under the auspices of the regulatory capture (seeLehman Dies While Getting Away With Murder: Introducing Regulatory Capture). So, what is the logical conclusion? More phallic looking charts of blatant, unbridled, and from a realistic perspective, unhedged RISK starring none other than Goldman Sachs...

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And to think, many thought that JPM exposure vs World GDP chart was provocative. I query thee, exactly how will GS put a real workable hedge, a counterparty risk mitigating prophylactic if you will, over that big green stalk that is representative of Total Credit Exposure to Risk Based Capital? Short answer, Goldman may very well be to big for a counterparty condom. If that's truly the case, all of youpretty, brand name Goldman counterpartiesout there (and yes, there are a lot of y'all - GS really gets around), expect to get burned at the culmination of that French banking party I've been talking about for the last few quarters. Oh yeah, that perpetually printing clinic also known as the Federal Reserve just might be running a little low on that cheap liquidity antibiotic... Just giving y'all a heads up ahead of time...

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... I'd like to announce to the release of a blockbuster document describing the true nature of Goldman Sachs, a description that you will find no where else. It's chocked full of many interesting tidbits, and for those who found "The French Government Creates A Bank Run? Here I Prove A Run On A French Bank Is Justified And Likely" to be an iteresting read, you're gonna just love this! Subscribers can access the document here:

Okay, now back to that Bloomberg article...

‘Extremely Profitable’

The Goldman Sachs transaction swapped debt issued by Greece in dollars and yen for euros using an historical exchange rate, a mechanism that implied a reduction in debt, Sardelis said. It also used an off-market interest-rate swap to repay the loan. Those swaps allow counterparties to exchange two forms of interest payment, such as fixed or floating rates, referenced to a notional amount of debt.

The trading costs on the swap rose because the deal had a notional value of more than 15 billion euros, more than the amount of the loan itself, said a former Greek official with knowledge of the transaction who asked not to be identified because the pricing was private. The size and complexity of the deal meant that Goldman Sachs charged proportionately higher trading fees than for deals of a more standard size and structure, he said.

“It looks like an extremely profitable transaction for Goldman,” said Saul Haydon Rowe, a partner in Devon Capital LLP, a London-based firm that advises global investors on derivatives disputes.

Disappearing Debt

Goldman Sachs declined to comment about how much it made on the swaps. Fiona Laffan, a spokeswoman for the firm in London, said the agreements were executed in accordance with guidelines provided by Eurostat, the EU’s statistical agency.

Oh yeah, Eurostat! That bastion of Eurofellas who really, really know what they're talking about - as evidenced from Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse!

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Revisions-R-US!

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and the EU on goverment balance??? Way, way, way off.

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“Greece actually executed the swap transactions to reduce its debt-to-gross-domestic-product ratio because all member states were required by the Maastricht Treaty to show an improvement in their public finances,” Laffan said in an e- mail. “The swaps were one of several techniques that many European governments used to meet the terms of the treaty.”

 

As excerpted fromSmoking Swap Guns Are Beginning to Litter EuroLand, Sovereign Debt Buyer Beware!

The Greeks (again)...

According to people familiar with the matter interviewed byChina Securities Journal, Goldman Sachs Group Inc. did as many as 12 swaps for Greece from 1998 to 2001, while Credit Suisse was also involved with Athens, crafting a currency swap for Greece in the same time frame.

Under its "off-market" swap in 2001, Goldman agreed to convert yen and dollars into euros at an artificially favorable rate in the future. This helped Greece to use that "low favorable rate" when it recorded its debt in the European accounts-pushing down the country's reported debt load.

Moreover,in exchange for the good deal on rates, Greece had to pay Goldman(the amount wasn't revealed).And since the payment would count against Greece's deficit, Goldman and Greece came up with another twist: Goldman effectively loaned Greece the money for the payment, and Greece repaid that loan over time.And the two sides structured the loan as another kind of swap. So, the deal didn't add to Greece's debt under EU rules. Consequently, Greece's total debt as a percentage of GDP fell from 105.3% to 103.7%, and its 2001 deficit was reduced by a tenth of a percentage point in GDP terms, according to people close to Goldman.

Another action that smacks of Hellenic manipulation, at least to the staff of BoomBustBlog: for years it apparently and simply omitted large portions of its military-equipment spending from its deficit calculations. Though, European regulators eventually prevailed on Greece to count everything and as a result, in 2004, there was a massive revision of Greek deficit figures from 2000 (a budget deficit of 2.0% of GDP in 2000 to beyond the 3% deficit limit in 2004), by then Greece had already gained entrance to the euro. As in my trying to prepare for the coming sovereign debt crisis, timing is everything, isn't it???

File Icon Greece Public Finances Projections

File Icon Greek Banking Fundamental Tear Sheet

 

Cross-currency swaps are contracts borrowers use to convert foreign currency debt into a domestic-currency obligation using the market exchange rate. As first reported in 2003, Goldman Sachs used a fictitious, historical exchange rate in the swaps to make about 2 percent of Greece’s debt disappear from its national accounts. To repay the 2.8 billion euros it borrowed from the bank, Greece entered into a separate swap contract tied to interest-rate swings.

Falling bond yields caused that bet to sour, and tweaks to the deal failed to prevent the debt from almost doubling in size by the time the swap was restructured in August 2005.

Greece, which last month secured a second, 130 billion-euro bailout, is sitting on debt equal to about 160 percent of its GDP as of last year...

‘Teaser Rate’

The derivative Loudiadis offered Sardelis in 2001 was also complex. Designed to provide a cheap way to repay 2.8 billion euros, the swap had a “teaser rate,” or a three-year grace period, after which Greece would have 15 years to repay Goldman Sachs, Sardelis said. All in, the deal appeared cheap to officials at the time, he said.

“We calculated that this had an extra cost above our normal funding cost on the yield curve of 15 basis points,” Sardelis said....

‘Very Bad Bet’

Sardelis said he realized three months after the deal was signed that it was more complex than he appreciated. After the Sept. 11, 2001, attacks on the U.S., bond yields plunged as stock markets sold off worldwide. That caused a mark-to-market loss on the swap for Greece because of the formula used by Goldman Sachs to compute Greece’s repayments over time.

“If you calculated that when we did it, it looked very nice because the yield curve had a certain shape,” Sardelis said. “But after Sept. 11, we realized this would be the wrong formula. So after we discussed it with Goldman Sachs, we decided to change to a simpler formula.”

The revised deal proposed by the bank and executed in 2002, was to base repayments on what was then a new kind of derivative -- an inflation swap linked to the euro-area harmonized index of consumer prices. An inflation swap is a financial bet that pays off according to the degree to which a consumer-price index exceeds or falls short of a pre-specified level at maturity.

That didn’t work out well for Greece either. Bond yields fell, pushing the government’s losses to 5.1 billion euros, according to an analysis commissioned by Papanicolaou. It was “a very bad bet,” he said in an interview.

“This is even more reprehensible,” Papanicolaou said of the revised deal. “Goldman asked them to make a change that actually made things even worse because they went into an inflation swap.”

And what the hell were they expecting? Didn't they realize that it was Goldman that was on the other side of the swap? Do you expect a wolf to turn down a pound of meat if he is asked if he wants it?

Confidentiality Requirement

Greece was handicapped, in part, by the terms Goldman Sachs imposed, he said.

“Sardelis couldn’t actually do what every debt manager should do when offered something, which is go to the market to check the price,” said Papanicolaou, who retired in 2010. “He didn’t do that because he was told by Goldman that if he did that, the deal is off.”

Sardelis declined to comment about the analysis, as did Petros Christodoulou, director general of the debt-management agency since February 2010.

It isn’t unusual for dealers to impose confidentiality requirements on clients in complex transactions to prevent traders from using the information to front-run or trade against the bank arranging and hedging the deal, said a former official who analyzed the swap and asked not to be named because the details are private.

Personally, I dont care if it isn't unusual to impose confidentiality on complex deals. If you don't understand the deal, seek qualified, impartial assistance. If you're counterparty doesn't like that, then ever so politely tell them to f@ck off - PERIOD! If you enter into a deal that you don't understand, don't be surprised from that itchy/burning/stretched feeling you're bound to feel in your anus a few months into the deal.

‘Large Number’

Goldman Sachs’s initial 600 million-euro gross profit “sounds like a large number, but you have to take into account what the bank will be setting aside as a credit reserve, the cost to Goldman to fund the loan and the cost of hedging the currency component,” said Peter Shapiro, managing director of Swap Financial Group LLC in South Orange, New Jersey, an independent swaps adviser. “It’s hard to tell what the profit margin would have been.”

Hmmmm... Methinks I could tell that it would have been a lot higher than a plain vanilla loan's profit margin at prevailing rates, no?

The report Papanicolaou commissioned after taking over the agency showed the repayment formula meant that Greece would have to pay Goldman Sachs 400 million euros a year, he said. The coupon and the mark-to-market swings on the swap prompted George Alogoskoufis, then finance minister, to decide to restructure the deal again to limit losses, Papanicolaou said.

Loudiadis and a team of Goldman Sachs advisers returned to Athens in August 2005, according to former Greek officials. The agreement they reached to transfer the swap to National Bank of Greece SA and extend the maturity to 2037 from 2019, gave the Greeks what they wanted, Papanicolaou said.

Oh yeah! That ever so solvent bastion of Greco-intellectual economic capability that I warned about two years ago, seeHow Greece Killed Its Own Banks! and the File Icon Greek Banking Fundamental Tear Sheet.

‘Squeeze Taxpayers’

The 5.1 billion-euro mark-to-market value of the swap was “locked in,” Papanicolaou said. It was that politically motivated decision to restructure and fix the increased market value that did as much damage as the original swap, said Sardelis, now a board member of Ethniki General Insurance Co., a subsidiary of National Bank of Greece.

“You can’t have prudent debt management if you change all the assumptions all the time,” he said.

Gustavo Piga, a professor of economics at University of Rome Tor Vergata and author of “Derivatives and Public Debt Management,” sees a different lesson.

“In secret deals, intermediaries have the upper hand and use it to squeeze taxpayers,” Piga said in an interview. “The bargaining power is in investment banks’ hands.”

Professor Gustavo Pigais the esteemed fellow who offered the nuggets of wisdom in the VPRO video above.

The nitty gritty on Goldman Sachs that you just won't get anywhere else...

If you haven't already, please do review the first four parts of this series, and if so skip past this break and into the nitty gritty--->

 

 I'm Hunting Big Game Today:The Squid On The Spear Tip, Part 1 & IntroductionI'm Hunting Big Game Today:The Squid On The Spear Tip, Part 1 & Introduction  

I'm Hunting Big Game Today: The Squid On A Spear Tip

Summary: This is the first in a series of articles to be released this weekend concerning Goldman Sachs, the Squid! In this introduction (for those who do not regularly follow me) I demonstrate how the market, the sell side, and most investors are missing one of the biggest bastions of risk in the US investment banking industry. I will also...

 Hunting the Squid, Part2: Since When Is Enough Derivative Exposure To Blow Up The World Something To Be Ignored?Hunting the Squid, Part2: Since When Is Enough Derivative Exposure To Blow Up The World Something To Be Ignored?  

Hunting the Squid, Part2: Since When Is Enough Derivative Exposure To Blow Up The World Something To Be Ignored?

Welcome to part two of my series on Hunting the Squid, the overvaluation and under-appreciation of the risks that is Goldman Sachs. Since this highly analytical, but poignant diatribe covers a lot of material, it's imperative that those who have not done so review part 1 of this series, I'm Hunting Big Game Today:The Squid On The Spear Tip, Part...

Reggie Middleton Serves Up Fried Calamari From Raw Squid: Goldman Sachs and Market Perception of Real Risks!Reggie Middleton Serves Up Fried Calamari From Raw Squid: Goldman Sachs and Market Perception of Real Risks!

Hunting the Squid Part 3: Reggie Middleton Serves Up Fried Calamari From Raw Squid

For those who don't subscribe to BoomBustblog, or haven't read I'm Hunting Big Game Today:The Squid On The Spear Tip, Part 1 & Introduction and Hunting the Squid, Part2: Since When Is Enough Derivative Exposure To Blow Up The World Something To Be Ignored?, not only have you missed out on some unique artwork, you've potentially missed out on 300%...

 Hunting the Squid, part 4: So, What Else Can Go Wrong With The Squid? Plenty!!!Hunting the Squid, part 4: So, What Else Can Go Wrong With The Squid? Plenty!!!  

Hunting the Squid, part 4: So, What Else Can Go Wrong With Goldman Sachs? Plenty!

Yes, this more of the hardest hitting investment banking research available focusing on Goldman Sachs (the Squid), but before you go on, be sure you have read parts 1.2. and 3:  I'm Hunting Big Game Today:The Squid On A Spear Tip, Part 1 & Introduction Hunting the Squid, Part2: Since When Is Enough Derivative Exposure To Blow Up The World Something To...

 

Hunting the Squid, Part 5: Sometimes Your Local Superhero Doesn't Look Like What They Show You In The Movies

What Was That I Heard About Squids Raising Capital Because They Can't Trade?

Reggie Middleton vs the Squid That Can't Trade!

A Few Quick Comments On Goldman's Q4 2011 ... - BoomBustBlog

Reggie Middleton on Realism and being Offensively Honest

The many ways to reach Reggie Middleton:

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Orsimply email me.

 

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Sun, 03/11/2012 - 12:20 | 2244864 100pcDredge
100pcDredge's picture

Nice piece of text + graphs - +++ IAPP.

Wed, 03/07/2012 - 06:34 | 2231467 Element
Element's picture

holy crap! ... goin' long hippie beads!

Tue, 03/06/2012 - 18:12 | 2230030 Zero Govt
Zero Govt's picture

Someome at Goldman Sucks has aalot of explaining to do across Europe to taxpayers

Will Lloyd 'toxic legacy' Blankfein be available for comment over here anytime?

Tue, 03/06/2012 - 17:37 | 2229915 The Heart
The Heart's picture

Hey Reggie or anyone else, can you please help out RBN here? They need all you good hearted folks to donate to the pledge drive today.

We must support alternative news networks that tell us the real truth.

At this time right now, Bob Chapman is on and will be for the 2.5 hours. Donate to the pledge drive if you can. This is about the best network for truth without all the banter and fearism.

http://republicbroadcasting.org/?p=18849

Listen now:

http://republicbroadcasting.org/?page_id=3

Please everyone, do what you can to support and listen to Republic Broadcasting Network.

***

Tue, 03/06/2012 - 17:36 | 2229910 BlackholeDivestment
BlackholeDivestment's picture

...great work Reggie.

 

Tue, 03/06/2012 - 17:38 | 2229893 The Heart
The Heart's picture

Hey Reggie or anyone else, can you please help out RBN here? They need all you good hearted folks to donate to the pledge drive today.

We must support alternative news networks that tell us the real truth.

At this time right now, Bob Chapman is on and will be for the next 2.5 hours. Donate to the pledge drive if you can. This is about the best network for truth without all the banter and fearism.

http://republicbroadcasting.org/?p=18849

Listen now:

http://republicbroadcasting.org/?page_id=3

Please everyone, do what you can to support and listen to Republic Broadcasting Network.

***

Tue, 03/06/2012 - 17:06 | 2229792 Benjamin Glutton
Benjamin Glutton's picture

I hate to say it, but if you're foolish enough to listen to the most profitable bank tell you not to say thing to anybody else about said deal, then you may deserve what's coming to you.

 

Let us not forget that the Greek people did not choose to screwed by Goldman.

Tue, 03/06/2012 - 18:20 | 2230063 CompassionateFascist
CompassionateFascist's picture

Yes they did: 60% of all jobs in Greece = government "jobs": 4-hour actual workdays, fat salaries, fat pensions, early retirement. Socialism = debt finance.

Tue, 03/06/2012 - 19:57 | 2230382 Zero Govt
Zero Govt's picture

Socialism = debt finance

Socialism = country down the sewer

..and nobody will help get you there faster than book-cooking Goldman Sucks

Thu, 03/08/2012 - 18:44 | 2237537 GoinFawr
GoinFawr's picture

T.Douglas' CCF: 17 surplus budgets despite inheriting debt.

Top of the following list with it's national balance sheet firmly in the black: 'socialist' Norway

http://www.guardian.co.uk/news/datablog/2010/may/27/debt-deficit-oecd-countries-data

Your stilted misnomered political bifurcation a la "The Spy who came in out of the Cold": priceless.

Tue, 03/06/2012 - 16:38 | 2229655 steelhead23
steelhead23's picture

Another terrific post Reg.  I am a tad astounded that trained financial personnel, such as Papanicolaou and Sardelis could be so stupid, but that is not the true tragedy here.  You see, in western democracies, politicians who offer goodies such as large pensions, public education, and health care easily beat those who trumpet fiscal sanity, thrift, and the joy of work.  Then, as those promises lead to financial difficulties, it is not too surprising that these same politicians and their minions, find secrecy, even secrets that may later embarrass them, preferable to telling the truth and adopting policies to rectify the situation.  My view is that this is not merely destructive of banks that hold debt in these nations, it is destroying governments and is indicative of the problem of democracy itself.  What is going to have to happen - and nobody is talking about this at all - is that to preserve global peace and democracy some form of grand agreement is reached in which creditors take hits in proportion to their complicity in the problem (e.g. GS should get zilch, while innocents like pension funds get only small haircuts) and global financial regulators apply something akin to Force Majuer to make it legal.  If deals like this are allowed to filter through to the debtor nation's populace, the results would effectively be enslavement (e.g. Germany under the Versailles Treaty).  You know where that leads.  Looking at your contagion graphic is downright scary (freaking Belgium?).  Yeah Reg, there clearly is an opportunity here, but I would far rather live a long peaceful life in poverty than die rich and young.

Tue, 03/06/2012 - 16:11 | 2229493 noob
noob's picture

Blaaah, fried squid yucky.

Tue, 03/06/2012 - 16:10 | 2229489 irishlink
irishlink's picture

Jesus we need you over here in Ireland to flush out the nefarious shenanigans that our 'wonderful' leaders . The Government has given the contract for refuse collection for parts of the Capital (Dublin)  to a private company  based in an off shore tax haven. They did this without putting the contract out to tender and handed over 140,000 names and addresses without prior notification or permission of the home owners. The company then demanded payment up front and have already increased fees by 16% even though they only took over the service 6 weeks ago. How fishy is that ? I believe this company will now have in excess of €30 MIL in an offshore account  which will  be changed into  POUNDS or  CHF and once Ireland leaves the € OR IT COLAPSES these funds will be converted back and be in a position to buy up prime assets aruond the capital. The more things change, the more they stay the same!!!!! Wake up sheeple!!

Tue, 03/06/2012 - 16:51 | 2229717 GoinFawr
GoinFawr's picture

Tell the Irish sheople not to worry so much: Jesus is everywhere! Or was that G-S? Anyway, I hear they are both doing God's work, so buck up!

Tue, 03/06/2012 - 15:20 | 2229198 prains
prains's picture

I hate to say it, but if you're foolish enough to listen to the most profitable bank tell you not to say thing to anybody else about said deal, 

 

"don't tell your mommy or daddy I touched you there"

Tue, 03/06/2012 - 14:44 | 2229019 GCT
GCT's picture

Reggie thanks for the blog and spot on.  While we always blame the bankster for their shennigans one must remember there are the greedy fricking politicians that knew about all of this and screwed their people.  When we assign moral blame as you are doing in this blog, none of this could have happened if the political elite had not wanted this to happen.  They are all crooks.  The bank will walk away from this getting bailed out by us working stiffs, no one will go to jail and the fucking greedy politicians will head to another country to enjoy their richer lifestyle.

Break out thropes and hang them all in a public square!  They deserve no less!

Tue, 03/06/2012 - 16:41 | 2229630 GoinFawr
GoinFawr's picture

Which came first, the chicken or the egg? Corrupt Banksters or Corrupt politicians? Psychopathy or Empathy?....

'Plutocracy' or the shredding of The Constitution of the United States of America?

Oh wait nm, I just answered my own question.

Tue, 03/06/2012 - 14:11 | 2228825 SillySalesmanQu...
SillySalesmanQuestion's picture

Two weeks from today, on March 20, World Wide Wrestling proudly presents a cage death match between Reggie "The Truth" Middleton vs The SQUID, at London's Royal Albert Hall. Proudly presented by ZH, where on a long enough timeline, even squid ends up as a fried calamari appetizer...Tickets are going fast! As a exciting undercard, Jon Corzine is pitted against Jamie Dimon in a grudge match to see who gets to keep the two billion from MF Global and who goes to jail...

Tue, 03/06/2012 - 14:47 | 2229046 11b40
11b40's picture

Where can we get tickets?  Gimme' 3.

Tue, 03/06/2012 - 14:04 | 2228807 Clowns on Acid
Clowns on Acid's picture

Reggie - Way to lift the burka off of GS and their global underhanded (illegal?) shenanigans.

The Greek people  should clawback from GS. The ECB will enforce that clawback.....right ?

Tue, 03/06/2012 - 15:20 | 2229200 LongSoupLine
LongSoupLine's picture

The ECB is GS

Tue, 03/06/2012 - 13:31 | 2228670 Hugo Chavez
Hugo Chavez's picture

I love you reggie.

Tue, 03/06/2012 - 22:44 | 2230834 StychoKiller
StychoKiller's picture

Tis the screwing you get for the screwing you got!

OT:  I've been collecting examples of the use of doubled wordz in English; examples so far:

so so

do do

to to

can can

is is    and now I can add

got got 

Thanks Reggie!

Tue, 03/06/2012 - 12:43 | 2228461 undertheradar
undertheradar's picture

You may want to provide your services as an independent analyst to Dutch Pension Funds. Apparently GS is opening up an office here.

http://tegenlicht.vpro.nl/nieuws/2012/februari/Goldman-Sachs-in-NL.html

Tue, 03/06/2012 - 11:41 | 2228114 AN0NYM0US
AN0NYM0US's picture

meanwhile Lenny Dykstra will do hard time for misrepresenting his financial statements and stealing a car

 

http://latimesblogs.latimes.com/lanow/2012/03/lenny-dykstra-sentenced-to...

Tue, 03/06/2012 - 14:28 | 2228938 NotApplicable
NotApplicable's picture

Meanwhile, as long as Jon Corzine is a free man, Reggie's anaylsis (and all of the other number people) is totally moot.

The only numbers that matter anymore in the financial world are the number of layers anyone is from the top.

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