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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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Fri, 08/10/2012 - 13:44 | 2694611 malikai
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Fri, 08/10/2012 - 13:50 | 2694642 redpill
redpill's picture

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

Fri, 08/10/2012 - 13:56 | 2694655 ZerOhead
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...

Fri, 08/10/2012 - 13:59 | 2694685 Cognitive Dissonance
Cognitive Dissonance's picture

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

Fri, 08/10/2012 - 14:41 | 2694856 disabledvet
disabledvet's picture

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

Fri, 08/10/2012 - 14:58 | 2694906 ParkAveFlasher
ParkAveFlasher's picture


Fri, 08/10/2012 - 16:13 | 2695184 True.North
True.North's picture

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

Sat, 08/11/2012 - 06:24 | 2696633 GetZeeGold
GetZeeGold's picture



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


Fri, 08/10/2012 - 14:58 | 2694863 LMAOLORI
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"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



Fri, 08/10/2012 - 14:08 | 2694729 yrad
yrad's picture

I'm gonna miss Government Sachs...

Fri, 08/10/2012 - 14:22 | 2694780 knukles
knukles's picture


(voice of lady saying "Culligan Man")

Collateral Call

Fri, 08/10/2012 - 14:33 | 2694824 slaughterer
slaughterer's picture

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

Fri, 08/10/2012 - 16:10 | 2695169 LongSoupLine
LongSoupLine's picture

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

Fri, 08/10/2012 - 13:44 | 2694613 Frank N. Beans
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Fri, 08/10/2012 - 13:45 | 2694615 Ima anal sphincter
Ima anal sphincter's picture

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

Fri, 08/10/2012 - 13:45 | 2694622 malikai
malikai's picture

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

Fri, 08/10/2012 - 13:45 | 2694616 govttrader
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

Fri, 08/10/2012 - 13:45 | 2694617 Meesohaawnee
Meesohaawnee's picture


Fri, 08/10/2012 - 13:47 | 2694620 LoneStarHog
LoneStarHog's picture

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

Fri, 08/10/2012 - 13:52 | 2694649 The Devil
The Devil's picture

All My Children

Fri, 08/10/2012 - 14:15 | 2694753 Satan
Satan's picture

Do I know you?

Fri, 08/10/2012 - 13:48 | 2694621 Dr. Engali
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.

Fri, 08/10/2012 - 13:59 | 2694679 JustObserving
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.



Fri, 08/10/2012 - 14:11 | 2694742 Hype Alert
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.

Fri, 08/10/2012 - 14:24 | 2694784 ArrestBobRubin
ArrestBobRubin's picture

That's called justice, Shapiro style

Fri, 08/10/2012 - 13:47 | 2694623 Jlmadyson
Jlmadyson's picture


Fri, 08/10/2012 - 13:50 | 2694641 TheInfoman
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.

Fri, 08/10/2012 - 13:52 | 2694651 Meesohaawnee
Meesohaawnee's picture

so will  chucky schumer

Fri, 08/10/2012 - 13:56 | 2694669 surf0766
surf0766's picture

Kaiser is a socialist

Fri, 08/10/2012 - 14:10 | 2694740 gmrpeabody
gmrpeabody's picture

Should that preclude him from being wise to the squid?

Fri, 08/10/2012 - 14:21 | 2694776 Landrew
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. 

Fri, 08/10/2012 - 14:24 | 2694786 surf0766
surf0766's picture

Socialism is a step on the road to communism.

Fri, 08/10/2012 - 14:41 | 2694819 gmrpeabody
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.

Fri, 08/10/2012 - 17:06 | 2695360 Lost Wages
Lost Wages's picture

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

Fri, 08/10/2012 - 13:58 | 2694676 malikai
malikai's picture

$10mil a day is nothing to the Squid.

Fri, 08/10/2012 - 14:24 | 2694787 knukles
knukles's picture

Afternoon Coke and Hooker party :)

Fri, 08/10/2012 - 15:29 | 2695020 PontifexMaximus
PontifexMaximus's picture

but not on fridays after 16'00

Fri, 08/10/2012 - 13:51 | 2694643 kliguy38
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

Fri, 08/10/2012 - 13:51 | 2694645 mr. mirbach
mr. mirbach's picture

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

Fri, 08/10/2012 - 13:51 | 2694647 Sandmann
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

Fri, 08/10/2012 - 15:17 | 2694867 FoeHammer
FoeHammer's picture

+1 for lulzy quote

Fri, 08/10/2012 - 13:52 | 2694652 slaughterer
slaughterer's picture

So where is the 20 point plunge in GS?

Fri, 08/10/2012 - 13:56 | 2694670 Fail2Deliver
Fail2Deliver's picture

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

Fri, 08/10/2012 - 14:22 | 2694779 Legolas
Legolas's picture

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

Fri, 08/10/2012 - 13:54 | 2694657 Let The Wurlitz...
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....

Fri, 08/10/2012 - 13:58 | 2694678 Meesohaawnee
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.

Fri, 08/10/2012 - 14:00 | 2694689 FieldingMellish
FieldingMellish's picture

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

Sat, 08/11/2012 - 18:55 | 2697958 StychoKiller
StychoKiller's picture

Mmm, Calimari!

Fri, 08/10/2012 - 14:04 | 2694712 yrad
yrad's picture

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

Fri, 08/10/2012 - 14:05 | 2694719 Goatboy
Goatboy's picture

Where to find all Egan Jones ratings?

Fri, 08/10/2012 - 14:21 | 2694774 ArrestBobRubin
ArrestBobRubin's picture

Blankfein is gonna need more botox.

Fri, 08/10/2012 - 14:25 | 2694789 R. Giskard
R. Giskard's picture

BBB is the new AAA


Fri, 08/10/2012 - 14:27 | 2694800 caimen garou
caimen garou's picture

DOJ, dept of jerks! it's ok as long as your last name is holder,morgan,corzine,or sachs as they are all obamas bastard children!

Fri, 08/10/2012 - 14:32 | 2694820 Shizzmoney
Shizzmoney's picture

Blankfien: "Someone get the SEC or DOJ on the fucking phone and shut up these assholes!"

I love how the SEC this week says about Goldman, "Hey, nothing to see here!" and.........then Egan Jones downgrades dat ass.  Brilliant.

Fri, 08/10/2012 - 14:46 | 2694872 eclectic syncretist
eclectic syncretist's picture

Word on the street is that Goldman Sachs has downgraded a world record number of muppets from Moet to Mad Dog 20/20.

Fri, 08/10/2012 - 14:47 | 2694873 AdrenalineTrade
AdrenalineTrade's picture


Fri, 08/10/2012 - 15:35 | 2695042 MachuPicchu
MachuPicchu's picture

Revenge of muppets!

Fri, 08/10/2012 - 17:08 | 2695378 Lost Wages
Lost Wages's picture

I pray to Goldman Sachs and Hollywood that someone remakes "Revenge of the Nerds" with Muppets.

Fri, 08/10/2012 - 15:56 | 2695132 pmm009
pmm009's picture

Good call, how many people were around willing and able to bail Knight out of a 5-7 Billion position in one day?????  Little quid pro quo????  Anyone know who sold the 4-5 Billion ES position at market end July 31st??? 

Fri, 08/10/2012 - 16:17 | 2695197 TideFighter
TideFighter's picture

Just a bit of a drop.

Their morality rating is still FFF junk status.

Fri, 08/10/2012 - 16:20 | 2695211 TideFighter
TideFighter's picture

Don't think it's only to TBTF banks that are engaged in fraud. Little BancorpSouth Bank frauded their 10k filings, pleaded nolo contendre to the charge (massive class actions piling up) and settled for an undisclosed amount. In totally unrelated news, their CEO is retiring and they issued 100 million dollars of new stock. Wonder what the finds and settlement amounts were?  

Fri, 08/10/2012 - 16:27 | 2695233 FoeHammer
FoeHammer's picture

Generate 21.6 mil of revenue, pay 4.8 mil to assuage the muppets. F U MS

Fri, 08/10/2012 - 17:07 | 2695373 Lost Wages
Lost Wages's picture

Egad! No one told Egan Jones that Goldman Sachs rules the world? You don't downgrade God's credit, bitchez.

Fri, 08/10/2012 - 18:45 | 2695645 sandhillexit
sandhillexit's picture

It must be true, Manhattan rents are dropping.  Things not bad enough yet to bring back marriage among the 20-somethings though.  Matter of time.

Fri, 08/10/2012 - 19:33 | 2695742 Under construct...
Under construction...'s picture

It's about time. Next stop, downgrade the JP Morg.

Fri, 08/10/2012 - 19:37 | 2695754 GoldandSilverTrain
GoldandSilverTrain's picture

That's far too generous of a downgrade for Government Sachs, but I'll take it!



Fri, 08/10/2012 - 19:41 | 2695762 GMadScientist
GMadScientist's picture

-9%...ooh...thats "two coyote" ugly for a company that barely has a trading day with a loss.

God's work doesn't pay like it used to, eh Blankfein? Fucking dead prick walkin'

Fri, 08/10/2012 - 23:27 | 2696276 Kasperfx
Kasperfx's picture

llooks like goldmans trying to keep all their dirty little secrets locked up tightly


Ex-Goldman programmer charged, again, over code theft

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