goldman sachs

Some much needed clarity from the people who run Europe's printers. And, just as in the case of Credit Suisse, Goldman is desperately pushing for Italy to avoid precisely the outcome that Berlusconi has said is coming, namely early elections: "These could be held in mid-January at the earliest, although they would most likely be postponed until the Spring amid market turmoil. This would represent the worst scenario for markets, in our view. Since President Napolitano is aware of this, he will probably try to resist dissolving Parliament at this juncture. Also, most centrist parties would want to change the electoral law before a new vote takes place. All these scenarios will take some time to play out, a couple of weeks at least. In the meantime, the higher priced Italian government bonds will continue to be sold, as gradually higher margin requirements are applied. On our central case, intermediate to long-end bonds should continue to be supported relative to AAA-rated securities by the ECB."

While hardly the explanation for why the EURUSD has surged nearly 100 pips in the past 45 minutes on absolutely no news (or, in this bizarro market, explaining it perfectly), and as the market focuses its attention on where the line of angry young protesters is longer: by the New York Stock Exchange or in front of the Apple store, Italians, once again betrayed by their politicians who were bribed by Berlusconi to vote for him in the latest vote of "confidence" (at a price of €250k per vote), have decided to make their feelings for financial innovation, and its patron saint, known, by storming the Goldman office in Milan. From Corriere: "on Friday students took to the streets to demonstrate for and against the public school funds the crisis and the government. The procession was attended by about ten thousand young people (two thousand according to initial estimates of the Police Station). The raid at the headquarters of U.S. bank Goldman Sachs was the first action of the student demonstration. A group of twenty boys tried to get a surprise in the Milanese headquarters of the U.S. bank, Bossi in the square, near Piazza Cordusio. Rejected by some employees of the home, the young people then smeared with spray paint the hallway and throwing bags full of garbage to the cry of "Goldman Sachs has the courage to face the future without young people." We doubt this is the last expression of love for those who do God's work in Europe, primarily with austerity-delaying FX swaps... Now that the delay can no longer be delayed.

Something tells us this formerly well-hidden treasury trove of imminent layoff information will soon be the most visited webtsite for every bankers in the Manhattan area. Presenting the Department of Labor's Worker Adjustment and Retraining Notification program, aka the "advance notice of mass layoffs on Wall Street" website. A great example of why 554 people should not look forward to the holidays presented below (our condolences Bank of Americans and Goldman Saches).

Booyah! There you go. The markets & the media have concentrated on Morgan Stanely because Goldman has successfully hid much of its risk from those who didn't subscribe to BoomBustBlog. Watch the fireworks as the truth is exposed, then goes VIRAL!!!

A little under a year ago, with much pomp and circumstance, Goldman’s economic team proclaimed its multi-year long bearish outlook on the economy over, and on December 1 of 2010, issued a report in which it noted that it was turning a new leaf in its “bleak” perception of the economy, based in big part on its expectation that the combination of an ebullient monetary environment (QE2 has just been launched) and a cornucopic (sic) fiscal stimulus (the first, of many, payroll tax cuts had just been passed) would lead the economy to a sustained growth of not less than 4% (and led Zero Hedge to officially proclaim Goldman as having jumped the shark in conjunction with our prediction that a year hence the US economy would be contracting yet again). Zero Hedge was right, and Goldman was 100% wrong. Today, we however witness something different: in what seem to be a major paradigm shift within the firm’s strategic research team (not Jan Hatzius’ group but that of Dominic Wilson), the firm appears to officially give up on “recovery” as a modal outcome for both the US and the developed world, and instead aims a little lower. Far lower. The report is titled “From the 'Great Recession' to the 'Great Stagnation'” and in an extended analysis looking at 150 years of historical data, it concludes that “those historical lessons suggest that the probability of stagnation in the current environment is much higher than usual, at about 40% for developed markets. Trends in Europe and the US are so far still following growth paths that would be typical of stagnations.” Looks like Goldman just proved us at least half right when we said in January that the keyword of 2011 would be “stagflation.” Luckily, the Fed and the world’s central banks still have 3 months in which to prove the second half of our prediction correct as well.

If Goldman rules the world where governments around the world fail as Alessio Rastani claimed, then GS stock chart should not look this ugly-- down almost 50%-- in the past 24 months.

While there is speculation whether today's historic announcement by the Fed in which it dated the beginning of the end of ZIRP, and in reality just the beginning of the beginning, is some form of shadow QE3, what is certain is that there is no Large Scale Asset Purchasing component to it yet. As such while the market immediately discounted the impact of 2 years of duration risk elimination (roughly 70 ES point equivalent), this has now been priced in, and the market must now look to mechanisms by which the it will have to absorb ~ $2.0 trillion in debt issuance over the next year without Fed help (and to those sticking to some modified version of MMT, keep in mind there is only $1.6 trillion in excess reserves so even a full recycling thereof would be insufficient to match demand of funds). Enter Goldman Sachs which puts the argument to bed: "We now see a greater-than-even chance that the FOMC will resume quantitative easing later this year or in early 2012." Why? Because what was lost in the noise today is that the US economy is contracting and the unemployment rate is rising: i.e., we are reentering a recession. And what the Fed did today is absolutely powerless to change this even from the Fed's point of view. Quote Hatzius: "This would probably mean more QE if their forecast converged to our own modal view of a flat-to-higher unemployment rate through the end of 2012, let alone our downside risk case of a renewed recession." But what about the historic dissent? Ah, therein lies the rub: "We view Chairman Bernanke's willingness to live with the dissents as a strong signal that he and the rest of the Fed leadership view the need for renewed easing as more important than the institutional norm of consensus decisionmaking." So there you go. The market will wake up tomorrow with a hangover, and say the one word it always does: "More." Absent that, the slide will, as predicted, resume, and it is none other than Goldman Sachs who has once again, just like back in 2010, set the strawman up for the Fed doing simply more of the same which does nothing to actually fix the economy, but bring us all closer to that epic meltdown discussed by Andy Lees earlier, and by Zero Hedge over the past two and a half years.

Still confused by the last two days of Ben Bernanke testimony which in under 24 hours had elements of glaring contradiction? A) You are not alone and B) Judging by the market's response to the Congressional and Senatorial portions of Bernanke's testimony, not even he knows what monetary message he was trying to convey. And since all of his decisions are ultimately predicated by Goldman Sachs (either in the form of current GS employee Jan Hatzius, or former GS employee Bill Dudley) here is Goldman's take on the "Q&A on the Monetary and Fiscal Policy Outlook" based on Alec Phillips and Sven Jari Stehn's take of Humphrey Hawkins events in the past two days.

In advance of tomorrow's Bureau of Labor Statistics fireworks, Goldman's Andrew Tilton explains why GS has a prediction of +125,000 for tomorrow's NFP number (and sees the unemployment rate declining to 9.0%), and provides a short perspective on why the market is still bearish on the employment picture. Probably a more fitting question is why the market is not far more bearish on jobs: 13 weeks of 400K+ claims, offset merely by one 0.1 increase in the service ISM employment component (from 54.0 to 54.1). Ah yes, the ADP number. The same ADP number which "surged" in January leading Barclays to come up with the insane NFP prediction of +580,000 (and a 95% confidence in a 450,000 print) only for the final number to be a gross disappointment. But who cares about headfakes: the market is back in its mania phase when good news are doubly accentuated, and bad news are immediately ignored. So anyway, here is Goldman and David Rosenberg. As to what happens tomorrow, only the Obama administration, Congress, Larry Meyer, and virtually every single NFP bank, know what is coming tomorrow.

As Zero Hedge readers predicted by a margin of more than nearly three to one, Tim Geithner's next employer of choice, per bnet's Constantine von Hoffman, is none other than the universal viceroy-cum-vampire squid presiding at 200 West according to a just "leaked" letter. And while we all know the key resume highlights (issuing $1.5 trillion in debt a year for the duration of his tenure, mopped up on both sides by Quantitative Easing, bringing America to the verge of insolvency and living on an "auction to auction" basis), here is the summary of Geithner's key qualifications that make him a shoo in for the job.

Its one thing when Investment Banks use optimistic assumptions for revenue growth and margin expansion to "rationalize" a high price for its client's stock. Its another thing entirely to assume a Chinese company has the same level of risk as a U.S. one...

Sometimes observing the counterclockwise rotation on Jim O'Neill's Koolaid-O-Dispener knob from 10 to 1.5 is the most gratifying thing that can happen to a person. Which is precisely what the most recent weekly report by the man who was sanctimoniously relegated to managing Goldman's most unprofitable division, GSAM, present: a bleak world in which the perpetual twisting of reality by the Man Utd fan has lost all credibility. To wit: "On Thursday lunch time, I joined some Goldman Sachs colleagues for a lunch with some leading macro hedge fund investors, most of which I had enjoyed a similar lunch with last October. The mood this time couldn't be more different. I guess it is kind of understandable given the recent run of data, the markets and the apparent policy impasse in DC on fiscal matters. But it seemed to me it was all a bit over the top. The general mood around that lunch table was gloomy, whether it was about the US, Europe or China, both with respect to data and policy options. I was regarded as a raving lunatic for suggesting it was possible that US unemployment might fall below 6 pct by the end of 2013." Hmm, whoever could possibly conceive of the man whose predictive track record is only better to DB's Joe Lavorgna, as a raving lunatic. Anyway, more importantly, even O'Neill is now forced to admit that in the off case that he has OD'ed on the Keynesian-spiked red substance, that the Fed will have no choice but to launch into another round of easing, something which is pretty much a given for everyone else, and would indicate that the US economic depression, which started almost 4 years ago never ended, but was briefly interrupted by bear market rallies inspired by dollar dilution: "while a QE3 would clearly involve “externalities,” it seems obvious to me that if the recent weak US data is for real, then there is a good chance that the Fed would deliver on something more." Naturally O'Neill then goes on to explain why even a negative GDP print which may be in the cards for Q3 is absolutely nothing to worry about. Lastly, there is always next year's Champions' League for Manchester United...

We have already noted our amusement at Sorkin's inaccurate and dictated defense of Goldman's housing short position previously (apparently the DCF expert has absolutely no understanding of such concepts as DV01, delta, gamma, capital structure priority, gross vs net notional, and exposes so many other misconceptions that we will simply wait for the official Goldman 8K to come out, as opposed to this unofficial one, before issuing out full debunking of any Goldman defense). One thing we did not note, however, that needs disclosure, is the glaring conflict of interest in ARS' puff piece. As Taibbi pointed out, it is none other than Goldman who is a critical backer of Sorkin's Dealbook. To wit: "Barclays Capital, Goldman Sachs, Sotheby’s and Tata Consultancy Services
are charter advertisers for the relaunch of DealBook." Indeed, it is perhaps time to have a disclaimer at the end of every article that there is substantial squid pro quo involved in namesdropping-for-brownnosing modus operandi. But even that is nothing compared to the latest attempt to glorify those who perform god's work on earth. Below is a snapshot of FierceFinance's spirited defense of Goldman Sachs. The author mocks the concept of Sorkin as an apologist for those who enjoy seeing their name in a good light in the NYT and on HBO: "Sorkin might be accused of trying to bolster his base with his report--Wikipedia describe him as "an apologist for Wall Street/Goldman Sachs." I kid you not. But Sorkin makes a lot of sense when discussing how one unit in a very large company may be hell-bent on shorting the market even as another unit in the same company may be stuck with certain securities." It is not the ongoing misunderstanding of previously noted concepts, but the actual advertisement as part of the piece. Once again, we see that only those who directly get funding from Goldman Sachs would be willing to destroy their credibility by coming to its defense.

"Please sell anything that is not nailed down. Thank you. Oh yes, your invite to this year's Christmas elves party is in the mail"

A month ago, when Goldman, just as we predicted, cut its GDP outlook for Q1 (to be followed by downgrades to both H2 and Q2) we said: "Some other things nobody will be able to predict: Hatzius dropping full
year GDP from 4% to 2.25%; Goldman's downgrade of precious metals,
Kostin's 2011 S&P 500 price target reduction by 20%, and Goldman
getting its New York Fed branch to commence monetizing $1.5 trillion in
debt some time in October." One by one all of the predictions are starting to come true: this morning Goldman head market strategist just cut his S&P 500 outlook from 1,500 to 1,450 (granted it is not 20%...yet. There is, however, over 7 more months left in the year). In the meantime, look for the thunderous Wall Street lemmings herd to do the same. Just as we have been predicting on both. Time for CNBC to trot out Laszlo Ultrasound and to advise him to angle the predictive instrument known as a ruler a littler lower: the S&P 2,854 call in 2 years suddenly appears in jeopardy (absent QE7 of course).