Goldman Sachs

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Daily US Opening News And Market Re-Cap: April 25





European equities are seen making modest gains at the midpoint of the European session; however underperformance is observed in the FTSE 100, with the UK economy falling back into a technical recession with an advanced Q1 GDP reading of -0.2%. Data from the ONS has shown that the UK’s weak construction sector weighed down upon the relative strength in services and manufacturing, pushing the economy into contraction during the first three months of the year. Following the UK GDP release, GBP/USD spiked lower by around 40 pips and the Gilt moved around 30 ticks higher, with GBP remaining weak as the US comes to market. Elsewhere, the Bundesbank held a technically uncovered 30-yr Bund auction, with the German Debt Agency commenting that the results reflect volatile and uncertain market conditions. Following the results, the Bund printed session lows and remains in negative territory. Looking ahead in the session, participants look forward to the FOMC rate decision, and the Fed’s projections release.

 
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Is India Turning 'Paper'? Goldman Sachs Gold ETF in India Sees 11 Fold Surge in Volume





Trading in Goldman Sachs Group Inc.’s gold ETF in India surged almost 11 fold, leading an advance in gold securities, as investors bought gold to mark the auspicious Hindu festival of Akshaya Tritiya. Volumes in GS Gold BeEs, India’s biggest exchange-traded fund backed by gold, was 937,816 units on the National Stock Exchange of India Ltd. at 4:54 p.m. in Mumbai, up from 85,376 units yesterday and more than the 101,914 average daily volumes in the last six months through yesterday, according to data compiled by Bloomberg. This is significant volume. Each unit represents about 1 gram of physical gold and therefore 937,816 units is the equivalent of some 29,170 ounces of gold which at today’s prices is some $47 million of daily volume for just one gold ETF in India. The Goldman Sachs India gold ETF is just one of many new ETFs in India. Trading in Kotak Gold ETF jumped more than eightfold to 226,032 units. Gold demand in India, the world’s biggest importer, may climb as much as 25% to 15 metric tons on Akshaya this year, according to Rajesh Exports Ltd., the country’s biggest gold-jewelry exporter. Assets held by local gold funds reached a record 98.9 billion rupees ($1.87 billion) at the end of March, according to the Association of Mutual Funds in India. GS Gold BeEs had assets worth 29.6 billion rupees (some $563 million (USD)) as of March 31, data from the association showed. Trading in UTI-Gold Exchange Traded Fund climbed more than fivefold, while volumes in Reliance Gold ETF, the second-biggest fund, was up more than sixfold, data shows.

 
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How Much Bigger Can TARGET2 Imbalances Grow? Goldman Answers: "A Lot"





Back in December, Goldman Sachs entered the fray of what has since become the most sensitive topic for Germans (courtesy of this particular exponentially rising chart), namely the German funding of Europe's current account via the TARGET2 balance. Since then much has been said, up to and including a letter that Jens Weidmann sent to Mario Draghi expressing a concern about the "net receivable" status of the German central bank vis-a-vis the periphery. Unfortunately, since then the Bundesbank added another nearly EUR100 billion in net deficit balance, which has hardly helped the German people sleep better at night. So in the meantime, one question has arisen: "how much more can the TARGET2 imbalances increase?" The scientific and, non-scientific answer, comes from Goldman Sachs: "a lot."

 
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Think The US Student Loan Bubble Is Bad? You Ain't Seen Nothing Yet





Frankly, by now the topic of US student debt has been discussed to death, and like every other bubble, it will keep growing, as the very fungible proceeds are used to purchase such mission critical "student" addenda as iPads and booze, until it bursts. Yet is it really that bad? And how does it look compared to some other countries' bubbles. Like that of the UK? Courtesy of Bloomberg we now know how a similar bubble is blowing across the Atlantic:  “In this country, we will be on an order of magnitude ahead of the U.S.,” Lampl said in an interview. “We’re loading up these kids with debt. The whole thing is an absolute disgrace.”

 
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MF Global Roundup: the [so-far] Great Escape of "Teflon Don" Corzine; Bankruptcy Shenanigans Exposed; the "F" Word Revisited





Has the case really gone cold? Or, are those who are in charge of the investigation, the "regulators" and the trustees, simply spraying teflon on every piece of sticky evidence that could lead to criminal prosecutions?

 
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Frontrunning: April 20





  • Current account surplus recycling goes global: BRICS demand bigger IMF role before giving it cash (Reuters)
  • Obama oil margin plan could increase price swings (Reuters)
  • Britons Abandoning Pensions Amid ‘Outdated’ Rules (Bloomberg)
  • Hedge-Fund Assets Rise to Record Level (WSJ)
  • Way to restore confidence: SEC considers case against Egan-Jones (FT)
  • Qatari wealth fund adds 5% Tiffany stake  (FT)
  • "Do we file?" Dewey Pitches Plan for Rescue (WSJ)
  • French president slips further behind Socialist challenger Hollande (ANI)
  • Nine U.S. Banks Said to be Examined on Overdraft Fees (Bloomberg)
  • Capital Rotation: Investors fret on emerging markets and look to U.S. (Reuters)
  • Verizon's Answer to iPhone: Windows (WSJ)
 
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Guest Post: Meet The Man Bankrupting The Eurozone (And Maybe The Rest Of The World)





No, it’s not Greece Prime Minister and bankster puppet Lucas Papadermos who serves his former masters at Goldman Sachs rather than the people of the country he was “appointed” to lead.  No, it’s not German Chancellor Angela Merkel who is putting the interests of the banks and bailout recipients above her fellow Germans at the risk of a continually devaluing euro.  And no, it’s not European Central Bank president Mario Draghi whose cheap euro policies are propping up both the banking sector and governments of the periphery at the expense of capital investment in sectors that would result in actual wealth creation rather than sustaining a clearly unsustainable status quo. Meet Ed Houben.  He is not solely responsible for the slow implosion of the poster boy of New World Order also known as the Eurozone, but the results of his career certainly play a part.  So who is Ed Houben? Well, he is not a politician buying votes with stolen funds.  Nor is he a banker looking to use taxpayers to cover his poor investments.  Mr. Houben is just a lowly entrepreneur.  His business just happens to be in putting a strain on the various welfare states which permeate throughout the Eurozone. Ed Houben is a sperm donor; but he is not just any sperm donor.  The “fruits of his labor,” pardon the phrase, have thus far granted him 82 children; with at least 10 more on the way.

 
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Goldman On The Three Risk World





Three key issues remain at the heart of current markets: the strength of the US growth cycle; the sovereign and financial risks in the Euro area; and the risks of ongoing deceleration in Chinese growth. Goldman has created proxies for these various risks and the sensitivities of different assets to those risk factors. They further note that looking at those three proxies over time confirms what general qualitative commentary has also spelled out. From late November to early February, the market relaxed about all three risks, as better global data and the impact of the LTROs on European financial risks provided a strong tailwind. From February until mid-March, China fears reappeared and the market downgraded its views of China significantly while still relaxing about European and growth risk. Since then, both European – and to a lesser degree – US growth risks have re-emerged, but at the same time there are some very tentative signs that the market is becoming a little less worried about China. They, however, remain increasingly cautious on them all: Europe seems increasingly in the hands of governments, not the ECB, raising volatility; unspectacular growth trajectory in the US continues as outlooks adjust down; and even thouigh China's risk has stabilized they have avoided active exposures 'given the muddiness of news'. Understanding which assets are more sensitive and how these risks evolve might help prognosticators understand the need to pay attention to Europe - as opposed to merely Apple's earnings.

 
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The True Cost Of The Greek Bailout Emerges





  • BARROSO SAYS TOTAL GREEK AID EQUAL TO 177% OF GREEK GDP
 
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On The Goldman Path To Complete World Domination: Mark Carney On His Way To Head The Bank Of England?





Back in November we penned "The Complete And Annotated Guide To The European Bank Run (Or The Final Phase Of Goldman's World Domination Plan)" in which we described what the long-term reality of Europe, not that interrupted by the occasional transitory LTRO cash injection and other stop-gap central bank measure, would look like. And yet there was one piece missing: after Goldman unceremoniously set up its critical plants in Italy via Mario Monti and the ECB via Mario Draghi, one key target of Goldman domination was still missing. The place? Why the center of the entire modern infinitely rehypothecatable financial system of course: England, which may have 1,000x consolidated debt/GDP, but at least it can repledge any asset in perpetuity thus giving the world the impression it is solvent (no wonder AIG, MF Global, and now the CME are scrambling to operate out of there). Which is why we read with little surprise that none other than former Goldmanite, and current head of the Bank of Canada, is on his way to the final frontier: the Bank of England.

 
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