Egan Jones Downgrades Goldman Sachs From A- To BBB+

Tyler Durden's picture

The juggernaut continues as Egan Jones exposes a key issue we have been discussing: namely that in the absence of actual trading, banks, which can no longer rely on Net Interest Margin, will have to get smaller, leaner and more efficient, or else lose some of the competition. Such as Bear. Such as Lehman. Maybe, even, such as Knight.

8/10/2012: Goldman Sachs Group Inc/The: EJR lowered A- to BBB+ (S&P: A-) (GS)


Synopsis: Dodging a bullet is the good news; the bad news is weaker results, concerns over proprietary positions, and the higher potential for losses. The DoJ's decision not to pursue GS for its role in the 2008 financial crisis is good news, however operating results for the June 12 quarter have weakened. Net revenues declined by 9% from $7.2B to $6.6B. Investment banking revenues were down 14% YoY (up 4% QoQ), with significant declines in equity underwriting. Inst Client Svc were up 11% YoY with the largest increase in mortgage securities and commodities transactions. Investing and Lending was down 80% YoY (down 89% QoQ) and Investment Management was up 5% YoY (up 13% QoQ). The major issues facing GS is the cost of complying with the Volker rule and a still weak IB and trading environment. We are downgrading.

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malikai's picture



redpill's picture

Downgrading the squid?  Hope they don't like helicopters or hot tubs.

ZerOhead's picture

Goldman calls Obama to telll him to downgrade Egan Jones on the Do not Kill List or the check won't clear...

Cognitive Dissonance's picture

Goldman - "Will someone please shut this son-of-a-bitch up?"

disabledvet's picture

I thought "they tried but failed." Didn't CNBC haul them into "CNBC Court" and pronounce them guilty?

True.North's picture

Guilty of what? Telling the truth? No wonder CNBC has taken a nosedive in the ratings.

GetZeeGold's picture



NBC is in the works to sell CNBC to it all makes sense.


LMAOLORI's picture



"Goldman calls Obama to telll him to downgrade Egan Jones on the Do not Kill List or the check won't clear..."

Goldman dodges crisis-related charges twice in one day


SEC Keeps Ratings Game Rigged




A case the commission filed last week epitomizes a lot of what's wrong with the agency, even under the supposed overhaul by its chairwoman, Mary L. Schapiro.

The agency brought a civil case against a tiny, iconoclastic ratings agency called Egan-Jones, run by the outspoken Sean Egan, accusing it of, well, essentially filling out forms wrong.

Before the S.E.C. charges, Egan-Jones was best known for two things: having made some bold calls about shaky credit prospects and having a business model that was different than that of the big boys — Moody's Investors Service, Standard & Poor's and Fitch. Mr. Egan's outfit gets paid by the users of his ratings; the oligopoly gets paid by the issuers whose debt is going to be rated.

in full


Now let's see if Egan Jones has the balls to go after obama's other favorite banker JP Morgan

'JPM's $150 Billion FDIC Reality Adjustment' - Jamie Dimon Just Admitted To The World That JPM's Assets Are Overvalued By $150 Billion



JPMorgan Chase Libor Subpoenas Coming From Everybody In The World



yrad's picture

I'm gonna miss Government Sachs...

knukles's picture


(voice of lady saying "Culligan Man")

Collateral Call

slaughterer's picture

Goldman Sachs did not deserve that downgrade.  Somebody else did. 

LongSoupLine's picture

Awaiting the "go long GS" call from Stolper...that'll be the nail.

Ima anal sphincter's picture

It doesn't matter....GS still rules the world.

malikai's picture

It's still good for a laugh, I'd say.

govttrader's picture

Just wait 6 months for the bankruptcy deals to start flowing...that should give banking and M&A deals a boost...lemmings

LoneStarHog's picture

Egan Jones doing the Devil's work against God's servants at Goldman Sucks!

Dr. Engali's picture

Now you've gone and done it Sean. I'm sure the squid will have their employees at the SEC turn off the midget tranny porn and do a little deeper digging into your books.


Speaking of trannies...transports are rolling over.

JustObserving's picture

Last time the SEC moved with surprising speed:


Egan Jones Downgrades USA From AA+ To AA, Outlook Negative

April 5, 2012


Egan-Jones Ratings Co. and Sean Egan Charged with Making Material Misrepresentations to SEC


Washington, D.C., April 24, 2012 — The Securities and Exchange Commission today announced charges against Egan-Jones Ratings Company (EJR) and its owner and president Sean Egan for material misrepresentations and omissions in the company’s July 2008 application to register as a Nationally Recognized Statistical Rating Organization (NRSRO) for issuers of asset-backed securities (ABS) and government securities. EJR and Egan also are charged with material misrepresentations in other submissions furnished to the SEC and violations of record-keeping and conflict-of-interest provisions governing NRSROs.



Hype Alert's picture

The ratings agencies got a free pass as their opinions are nothing but free speech.  But, yes they must be punished for such vile acts.  More humor for this market, like my stomach isn't hurting enough already.

ArrestBobRubin's picture

That's called justice, Shapiro style

TheInfoman's picture

What I don't get it that Max Kaiser, et al are always saying GS and others have High Frequency trading machine that make $10Mill a day.  At that rate, they should be awash with cash.

gmrpeabody's picture

Should that preclude him from being wise to the squid?

Landrew's picture

He isn't but you say socialist as though you don't know what it means. To 99% of the world that isn't an insult. 

surf0766's picture

Socialism is a step on the road to communism.

gmrpeabody's picture

Just keep throwing it out there..., eventually something might stick, eh?

FYI.... socialism can also be a step on the road to capitalism, depending on your starting point.

Lost Wages's picture

Keiser and Herbert are socially liberal, fiscally conservative. It's called "having a brain."

malikai's picture

$10mil a day is nothing to the Squid.

knukles's picture

Afternoon Coke and Hooker party :)

PontifexMaximus's picture

but not on fridays after 16'00

kliguy38's picture

Just the first steps of many before they short themselves to zero then take themselves private in the end....wash rinse repeat.......they not only love the game ..........they are the game

mr. mirbach's picture

Breaking news - DOJ files Economic Terrorism charges against Eagan Jones....

Sandmann's picture

How can Goldman Sachs have a low Bond Rating when it owns the US Treasury ?  Won't they have a War Bonds Rally for Goldman to float its boat ?  Surely those words hold true ?

Let every nation know, whether it wishes us well or ill, that we shall pay any price, bear any burden, meet any hardship, support any friend, oppose any foe, in order to assure the survival and the success of Goldman Sachs

slaughterer's picture

So where is the 20 point plunge in GS?

Fail2Deliver's picture

When Goldman builds a short position in  themselves, you will get the crash. As long as they still make money.

Legolas's picture

Further proof that the retail investor has left the market.  A 20 point drop would mean GS plays with itself. 

Let The Wurlitzer Play's picture

Would someone like to tell me how a bunch of ivey league, uber smart, sophisticated, metro sexual geniuses could manage a business to be downgraded to BBB+ (if it is acually that) ???

Please do tell....

Meesohaawnee's picture

lookey the matt nesto clown hour says that gs "dodged" criminal charges. dodged. More like paid off  idiot. the clueless continues on being clueless.

FieldingMellish's picture

I <3 you EJ! Squid is best when its deep fried.

yrad's picture

WTF does this actually mean? GS gets a stock bump?

Goatboy's picture

Where to find all Egan Jones ratings?