Goldman Sachs

How many of those millions of dollars in cars does the "Foreclosure King" still have? How is he able to stay so warm and cozy in his castle on the intercoastal in Ft.Lauderdale staring out at his 100 foot yachts and where is the Florida Bar in all this?

As US markets remain in hibernation for a few more hours, Goldman picks out the five critical questions that need to be considered in the context of 2012's economic outlook. Jan Hatzius and his team ask and answer a veritable chart-fest of crucial items from whether US growth will pick up to above-trend (and remain 'decoupled' from Europe's downside drag), whether inflation will find its Goldilocks moment this year and if the US housing market will bottom in 2012 (this one is a stretch). Summarizing all of these in a final question, whether the Fed will ease further, the erudite economist continues to expect an expansion of LSAP (focused on Agency MBS) and an official re-adjustment to an inflation targeting environment. Their view remains that a nominal GDP target combined with more (larger) QE improves the chances of the Fed meeting its dual mandates (unemployment target?) over time but expectations for this radical shift remain predicated on considerably worse economic performance in the economy first (as they expect growth to disappoint). We feel the same way (worse is needed) and recall our recent (firstly here, then here and here) focus on the shift in the balance of power between the Fed and ECB balance sheets (forced Fed QE retaliation soon?).

How Jim O'Neill still has a job is beyond us. Not only is he the head of the worst performing vertical at Goldman Sachs, not only is he the creator of the Bloody Ridiculous Investment Concept (BRIC), but now this? Come on...

But fear not: the arrested are not the firm's "god's work-ing" employees; more of the OWS persuasion. From PressTV: "US police have arrested 17 members of the Occupy movement in New York as the nationwide crackdown on the anti-corporatism protesters continues." When we get additional confirmation of this arrest from US sources, and not-Iranian media, we will update. Luckily, since none of the protesters can close a Goldman (which is still a Bank Holding Company) checking account, we are confident the story will end here.

While we are not completely shy of saying we-told-you-so, in the case of the players in Solyndra's fantastic rise and fall, we are more than happy to. Back in September we highlighted Goldman Sachs' key role in the financing rounds of the now bankrupt solar company and this evening MarketWatch (and DowJones VentureWire) delves deeper and highlights how the squid has largely stayed out of the headlines (what's the opposite of lime-light?) in this case despite its seemingly critical assistance and support from inception to pre-destruction. Goldman's involvement in Solyndra, and its lofty valuation projections, lent credibility to the company and helped rouse investor interest and it was this private interest that was cited by DoE officials as a considerable factor in its loan guarantee program. As we said before, anywhere you look, Goldman has been there and left its mark...

I Think This Means I'm Not Getting Invited To The Squid's Christmas Party This Year :-( I understand that taking stabs at the Vampire Squid is risky, but the sources of these interviews stem from Russia and the Netherlands. Is it time for the guys stateside to represent?

It may not be quite the entire 1% but it is close. In his presentation to Bank of America on Tuesday, when discussing "talent (or tentacle) retention, Lloyd Blankfein disclosed this whopper: "Almost 300,000 individuals applied for full-time positions at Goldman Sachs for 2010 and 2011. We hired fewer than 4% of that population, and, though most had multiple offers, nine out of ten people offered a job with us accepted." In other words, it is more difficult to get into Goldman than Harvard. As a reminder, the US labor force has 140 million people at last count (or, coming from the BLS, rough propaganda guess). In other words, more than 0.2% of the entire US employed workforce (because let's face it, Goldman won't hire anyone without prior experience) applied to work at Goldman Sachs. And by the retention rating, it seems that the number one dream for every job seeker in the US is to get the fat letter from Goldman HR. Speaking of training, we also get this pearl from Lloyd: "This year, we expect to provide 800,000 hours of training to our people, an average of 25 hours per person." Just what is it that these people are taught so intensely?

Who would have thought that doing away with your prop trading unit would have consequences? Surely not Goldman spokesman Lucas van Praag or anyone who read his response to Zero Hedge from December 2009 in which he made the argument that Goldman's prop trading unit is largely irrelevant to the firm. Alas, as the last quarter showed, it was. A lot. $2.5 billion worth. Net result: GS stock is now trading at imminent MBO levels, and more importantly, there is no joy in bankerville:

• GOLDMAN NAMES SMALLEST CLASS OF MANAGING DIRECTORS SINCE 2008
• GOLDMAN SACHS PROMOTES 261 EMPLOYEES TO MANAGING DIRECTOR

However as the video below proves, it still does, and always will, feel good to be a banker.

Not on even a Sunday is the headline barrage over:

• MARIO MONTI ASKED TO FORM NEW ITALIAN GOVERNMENT
• MONTI TO MAKE COMMENTS AFTER ACCEPTING OFFER TO LEAD ITALY
• MARIO MONTI THANKS NAPOLITANO FOR OFFER TO FORM GOVERNMENT
• MARIO MONTI SAYS ITALY MUST BE PROTAGONIST IN EUROPE
• MARIO MONTI SAYS HE'LL ACT TO SAVE ITALY FROM CRISIS

And so the international advisor to Goldman Sachs drones on. In the meantime, the €300 billion in BTP sales is set to resume in just over 13 hours.

Even the squid has a bad day once in a while.

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.