Goldman Sachs (GS) 01 (Jun 08 - Apr 10)

[millionairemind]

February 1, 2010
Lloyd Blankfein of Goldman Sachs 'expecting $100 million bonus'

Goldman Sachs, the world’s richest investment bank, could be about to pay its chief executive a bumper bonus of up to $100 million in defiance of moves by President Obama to take action against such payouts.

Bankers in Davos for the World Economic Forum (WEF) told The Times yesterday they understood that Lloyd Blankfein and other top Goldman bankers outside Britain were set to receive some of the bank’s biggest-ever payouts. “This is Lloyd thumbing his nose at Obama,” said a banker at one of Goldman’s rivals.

Goldman Sachs is becoming the focus of an increasingly acrimonious political and financial showdown over the payment of multimillion-pound bonuses.Last week the US President described bonuses paid out by some banks as “the height of irresponsibility” and “shameful”.

“The American people understand that we have a big hole to dig ourselves out of, but they do not like the idea that people are digging a bigger hole, even as they are being asked to fill it up,” he said last week.
http://business.timesonline.co.uk/tol/b ... 010492.ece

[winston]

Porter Stansberry: This is one of the biggest Wall Street frauds ever...
By Porter Stansberry in the S&A Digest:

One of the best lessons I've learned over my career as an investment analyst is the myth of excellent management or "great execution" is really just that – a myth.

When I see companies in troubled industries reporting quarter after quarter of great results, while all of their peers are getting killed, I know a fraud is going on. I remember in the early 2000s, WorldCom kept reporting profits when all of the other long-distance carriers were getting killed. I knew it couldn't last. And it didn't.

WorldCom's accounting was revealed to be a fraud – the company was counting its network access costs as capital expenses. Once the real numbers came out, the company collapsed in what was the largest bankruptcy in American history at that point.

About three years ago, I saw Goldman Sachs reporting quarter after quarter of unbelievable results when all of the other investment banks were hurting. I spent a lot of time looking at its numbers – which didn't make any sense. It reminded me of Enron. It kept reporting bigger and bigger profits, but lost more money every year in cash. And its debt balances kept growing.

I wrote a lot about this in The Digest, but I never officially recommended shorting Goldman in my newsletter because I literally couldn't figure out how Goldman Sachs was doing it. I couldn't find the smoking gun... but I knew a giant fraud would be discovered there, eventually.

In October 2008, I figured out part of the big secret: Goldman had insured all of its subprime exposure via AIG. This allowed it to book huge profits on its subprime investments long before they were actually paid off because the bonds were insured. Of course, it was all a sham – AIG didn't have nearly enough money to pay off any of the insurance. (See the October issue of PSIA for more details.)

A source close to the company even told me how big the exposure to AIG really was – $20 billion. That's roughly 100% of the profit Goldman claimed in 2006 and 2007, at the height of the credit bubble. Goldman completely denied my report and claimed it had zero exposure to AIG.

As was subsequently revealed in the spring of 2009, my report was right on the money. Goldman had roughly $20 billion in exposure to AIG and received roughly $14 billion of money the federal government used to bail out AIG.

But I completely missed one big part of the story... And once this fact becomes common knowledge, it will probably mean jail time for several leading Goldman executives and the end of the firm. What did I miss? The entire Goldman-AIG relationship was a complete sham. Let me explain...

Goldman eventually admitted it had insured roughly $20 billion worth of subprime CDOs with AIG and had major exposure to the firm. But the New York Federal Reserve and Goldman Sachs never revealed this critical fact: Goldman didn't merely buy insurance on a bunch of random subprime CDOs. It actually bought insurance on special CDOs it had put together and sold to its own clients. In other words, Goldman knew more about these CDOs than anyone else. Goldman bought insurance on these CDOs because it knew they'd collapse.

This is tantamount to building a house, planting a bomb in it, selling it to an unsuspecting buyer, and buying $20 billion worth of life insurance on the homeowner – who you know is going to die!

These facts all came to light because of research done by the office of Darrell Issa, the ranking Republican on the House Committee on Oversight and Government Reform. These new documents will certainly lead to a full investigation of the Goldman-AIG dealings and the subsequent $180 billion bailout led by the New York Federal Reserve. My bet? Heads will roll. If you own Goldman Sachs, you'd better sell.

[kennynah]

Porter Stansberry: This is one of the biggest Wall Street frauds ever...
By Porter Stansberry in the S&A Digest:

W : thanks for this article...when was this reported? the article is not dated.. thanks.

[winston]

Today. If it's a different date, then I will put the date in

[kennynah]

if the above bis true...then we have a wayang show underway....

[millionairemind]

if the above bis true...then we have a wayang show underway....

I say say only, give you a slap on the wrist, we go out drinking tonight..

When I relinquish my post as FED chairman and go back to academia, you give me a director post in your company

[kennynah]

the power of money....and its influence.....

[millionairemind]

April 8, 2010, 8.55 am (Singapore time)

Goldman Sachs denies betting against clients

NEW YORK - Goldman Sachs Group is denying that it bet against clients by selling them mortgage-backed securities while reducing its own exposure to such investments before the US housing market crashed.

In an annual letter to shareholders released on Wednesday, Goldman said it bought and sold mortgage-backed securities and other financial instruments every day prior to the crisis as part of its role as one of Wall Street's biggest market makers.

The investment bank said it remained generally bullish on the housing market through 2006 until it began seeing losses on its mortgage-related investments at the end of that year. In response, Goldman said it began reducing its exposure to the US mortgage market, either by selling positions or buying hedges, a form of insurance that pays out if the value of an underlying asset declines.

Those hedges, also known as short positions, proved prophetic for Goldman; As the housing market began cratering in the summer of 2008 and losses piled up for the nation's biggest banks, Goldman suffered minimal damage relative to its competitors.

That led to intense criticism that the New York-based bank benefited at the expense of clients who bought mortgage-backed securities that later became toxic - a claim Goldman denied.

'Our short positions were not a 'bet against our clients,' Goldman said in the letter. 'Rather, they served to offset our long positions. Our goal was, and is, to be in a position to make markets for our clients while managing our risk within prescribed limits.'

Goldman also rejected claims that it profited from the mortgage market meltdown.

'Rather, our relatively early risk reduction resulted in our losing less money than we otherwise would have,' the bank said.

Goldman has emerged from the financial crisis as one of the nation's strongest banks. It earned a record US$4.79 billion profit in the last three months of 2009 on strong trading of risky assets and gains in its investment banking division.

Goldman also filed its annual proxy statement on Wednesday.

According to an Associated Press calculation of the compensation data in the filing, CEO Lloyd Blankfein received pay valued at US$9.86 million for 2009, including a restricted stock bonus worth US$9 million on the day it was granted, a US$600,000 salary and US$262,657 in other compensation and perks including car service and retirement benefits.

While Mr Blankfein's stock-based award was to reward his work in 2009, the award was not included in the calculation of total compensation that Goldman presented in its proxy statement since it was approved 2010. The pay amount included in the proxy only reflects what was granted and paid in the fiscal year 2009.

Mr Blankfein's latest stock award will be included in calculations of his total pay for 2010.

The AP's executive pay calculation aims to isolate the value the company's board placed on the CEO's total compensation package. The figure includes salary, bonus, incentives, perks and the estimated value of stock options and awards.

The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the SEC, which reflect the size of the accounting expense taken for the executives compensation in the previous fiscal year. -- AP

[helios]

Looks like we can't buy this Co.

[millionairemind]

Looks like we can't buy this Co.

Y not? A company's stock does not know that you own it... so y get sentimental? Sell it if it gives you a loss. Buy if you think there are profits to be had.