Goldman Sachs (GS) 02 (May 10 - Dec 19)

Re: Goldman Sachs (GS) 2 (May 10 - Oct 10)

Postby iam802 » Tue Jun 22, 2010 2:35 pm

Goldman price rises as high as 140.15 yesterday on news that their hearing will be extended to July 19; the original date fo r the hearing was supposed to be yesterday (June 21).

However, the price reverse and close off on the low at 137. Volume is also very low for the day.

GS price is unlikely to go up much until the hearing is completed.

If the reversal plays out, we should have a target of $131 (it’s recent low). Any more bad news (eg. more lawsuits) may see it break the recent low.

Likewise, a confirmed settlement with SEC can revive its price movement upwards.

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Re: Goldman Sachs (GS) 2 (May 10 - Oct 10)

Postby LenaHuat » Tue Jun 22, 2010 8:44 pm

It will take a strong heart and heavy wallet to buy this. I think it will drop to $100.
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Re: Goldman Sachs (GS) 2 (May 10 - Oct 10)

Postby LenaHuat » Fri Jul 16, 2010 8:32 am

Up to this moment, I was all wrong abt GS. It settled the case pertaining to John Paulson with the SEC for a payment of $550 million (which is only 14 days' of earnings :o ). The case against employee, Fabrice Tourre, and 'other' litigations are still in progress. Will these be ant bites?
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Re: Goldman Sachs (GS) 2 (May 10 - Oct 10)

Postby arthur » Fri Jul 16, 2010 1:19 pm

There is a saying in Wall Street that whoever controls GS, controls America's financial system.

GS is a market maker, a firm with lots of alumni holding high offices in government positions.

Care to know where does the largest portion of TARP money that pays to bail out AIG goes to?

GS is the best in propietary trading, not doing buy low sell high thingy with wiggly lines, but thru bid-ask spreads with algo. And its position as a mkt maker makes it doubly proficient.

My only regret is.. I did not buy a substantial amount when it was at $50+. :(
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Re: Goldman Sachs (GS) 2 (May 10 - Oct 10)

Postby kennynah » Fri Jul 16, 2010 1:59 pm

i thought most people would have regretted not to have been employed by GS and learn their trade secrets... but then after you know the inner working... working for them can become like staying in

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Re: Goldman Sachs (GS) 2 (May 10 - Oct 10)

Postby winston » Sat Jul 17, 2010 8:00 am

Goldman's Settlement: Four Days Worth Of 2009 Revenues
July 15, 2010

Though the SEC is proclaiming it the biggest settlement ever paid to the agency by a financial firm, many in the blogosphere complained Thursday that Goldman got a cushy deal.

For starters, $550 million amounts to a little over four days worth of revenue in 2009, when the firm raked in $45 billion from bond trading and other Wall Street activities. That's also just a tad over 3% of its 2009 compensation and bonus pool. Or you could say it's $16,000 per each of Goldman's 32,500 employees.

Lloyd Blankfein, the PR-battered firm's chief executive, keeps his job in the settlement. And initial charges of fraud morphed into a much more innocuous sounding "misleading investors" and "incomplete" marketing materials. Goldman expressed contrition about the incomplete marketing materials.

Fabrice Tourre, the Goldman employee who arranged the transaction at the center of the case, remains on the hook, the SEC says. The agency accused the firm of arranging a deal with a hedge fund to create a pool of mortgage securities the hedge fund could short against. Goldman sold that pool to two European banks with the help of an agent.

The hedge fund, Paulson & Co., made $1 billion from its involvement in the deal, while the banks lost that amount. Goldman reaped $15 million in fees.

Now Goldman has to give the banks some money back. Royal Bank of Scotland is getting $100 million back, and Deutsche Industriebank is getting $150 million. [Incidentally, bloggers don't like this either. Those banks were big boys and knew what they were getting into.] Goldman has to pay another $300 million to the SEC, including the $15 million worth of fees from the deal. The bank also has to make some changes to its compliance activities and give marketing materials a closer review.

Goldman employees are going to get some new training, too, perhaps in e-mail etiquette? One of the more salacious details to come out of the SEC's original case was Tourre's boastful January 2007 e-mail to a friend saying "more and more leverage in the system, the entire system is about to crumble any moment ... the only potential survivor the fabulous Fab." Guess again, Fabrice.

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Re: Goldman Sachs (GS) 2 (May 10 - Oct 10)

Postby -dol- » Sat Jul 17, 2010 12:37 pm

kennynah wrote:i thought most people would have regretted not to have been employed by GS and learn their trade secrets... but then after you know the inner working... working for them can become like staying in


I am not sure one would be storing up good karma doing what they do.

With this latest "oh-so-punitive" penalty, GS will just chalk it down to "cost of doing business" and be on their way again to doing more "God's work". More bad karma.
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Re: Goldman Sachs (GS) 2 (May 10 - Oct 10)

Postby winston » Tue Jul 20, 2010 10:40 pm

Goldman Sachs profits fall 82 percent

NEW YORK (AFP) - – Investment giant Goldman Sachs on Tuesday said its profits fell 82 percent in the second quarter of the year against the same period last year.

Reporting net earnings of 613 million dollars, Chief Executive officer Lloyd Blankfein said the business environment had become tougher for the embattled firm.

"The market environment become more difficult during the second quarter, and as a result, client activity across our business declined," he said in a statement.

In first three months of the year, Goldman reported that profits had nearly doubled to 3.46 billion dollars.

Revenues in the second quarter reached 8.84 billion dollars, down 36 percent from the year before.

Compounding the decline, the New York-based firm reported a 600 million dollar hit from the introduction of a tax on executive compensation in Britain.

The announcement also came days after the firm said it had agreed to pay a record 550 million dollars to settle government fraud charges with the Securities and Exchange Commission.

Facing allegations of defrauding investors, the storied investment bank admitted it had made a "mistake" and given "incomplete" information to clients.

The SEC had accused Goldman of allowing a prominent hedge fund -- Paulson & Co. Inc -- to put together a package of subprime mortgages that were sold to clients, but which Paulson was also betting against.

That settlement was included in Tuesday's report.

Net revenues in Goldman's all-important investment banking arm fell 36 percent versus the second quarter of 2009, revenues from trading also fell by 35 percent.

Pay and bonuses for 34,100 staff ate up 43 percent of revenue.
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Re: Goldman Sachs (GS) 2 (May 10 - Oct 10)

Postby winston » Wed Jul 21, 2010 8:08 am

Goldman's Bad Equities Bet By Dan Freed

NEW YORK (TheStreet)--Goldman Sachs's(GS) second-quarter results provided a reminder that the bank doesn't exactly walk on water.

Goldman suggested the mediocre performance was driven by one-time items, including its $550 million settlement of fraud charges with the Securities and Exchange Commission and a $600 million U.K. bank payroll tax.

CFO David Viniar also referred repeatedly to low levels of customer activity on a conference call with the media Tuesday.

The poor fixed-income trading results were to be expected, as underwriters like Goldman have an unspoken obligation to buy back inventory from clients in the face of declining markets, says Bernstein Research analyst Brad Hintz.

Other big debt underwriters, including Bank of America(BAC), JPMorgan Chase(JPM) and Citigroup(C) also showed similar weakness in their fixed income trading results.

But the disappointing numbers from Goldman's equities trading business caught Hintz off guard. The bank earned just $235 million from this business in the second quarter, compared to $1.47 billion in the first quarter and $2.16 billion in the second quarter of 2009.

Goldman's Viniar told reporters the poor equities performance was partly driven by the fact Goldman was short certain indices that track volatility, the best known of which is the VIX.

"We had that position going into the quarter and volatility just spiked," Viniar said, adding that the trade was in response to client demand.

But the fact that Goldman's clients wanted it to do this trade is no excuse, as Goldman could have hedged against the position, a point made by Barclays Capital analyst Roger Freeman on a call with analysts Tuesday morning.

"We didn't hedge it fast enough," Viniar said, adding "clearly we were reducing position size and hedging things, but things spiked really dramatically really fast."

Bernstein's Hintz nonetheless expressed surprise that Goldman chose to be short volatility. He says that though it costs money to be long volatility, most equities derivatives desks tend to prefer that position as it protects them when volatility spikes.

"This explains to investors why Goldman has a high beta. It's a volatile stock that goes up and down with market conditions," Hintz says.

Goldman shares were down 29 cents to $145.39 in early afternoon trades.


http://www.thestreet.com/story/10811406 ... ooyah_html
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Re: Goldman Sachs (GS) 2 (May 10 - Oct 10)

Postby millionairemind » Thu Aug 05, 2010 7:51 am

Goldman plans to spin off prop trading: report
http://www.reuters.com/article/idUSTRE6734CD20100804
North Carolina (Reuters) - Goldman Sachs Group Inc plans to spin off its proprietary trading business as early as this month to comply with the so-called Volcker rule, CNBC reported on Wednesday.

It would be the first move by the New York-based investment bank to adapt its business to comply with the U.S. financial reform package signed into law last month, and would follow similar moves from other banks.

"As we've said all along, we are considering our options," said Goldman spokesman Michael DuVally. "When we have something to announce, we'll announce it. Of course anything we do will comply with the law."

Goldman shares ended 2.1 percent higher at $156.41 on the New York Stock Exchange.

"It gets them out of the way of the Volcker rule without causing any deterioration in their earnings. Therefore it's a significant positive," said d**k Bove, analyst at Rochdale Securities.

Goldman will receive a substantial number of benefits from the reform law, potentially offsetting the prop trading restrictions, Bove said.

Others took a more cautious view.

"What does Goldman become without proprietary trading?" said Walter Todd, co-chief investment officer of Greenwood Capital. "We're going back to the old days. It starts to look like what investment banks used to look like."

FOCAL POINT

Reports of a spin-off of Goldman's proprietary trading business come just a few weeks after Goldman's chief financial officer said the impact of the new law would be difficult to predict.

"The new financial regulatory legislation represents the most sweeping change for the financial industry in decades," Goldman CFO David Viniar said on a conference call.

In recent months, Goldman has been a focal point for critics of the financial sector's ills leading into the 2008 crisis.

On July 16, Goldman paid $550 million to settle U.S. Securities and Exchange Commission civil fraud charges over how it marketed a subprime mortgage product to institutional investors.

ASSET SALES

Under the new Volcker rule, named for former Federal Reserve Chairman Paul Volcker, banks are restricted from proprietary trading and have new limits on the size of private equity or hedge fund investments. Proprietary trading has been a key source of Wall Street investment bank profits.

The rule was a key, and sometimes contentious, provision in the financial reform legislation, known as the Dodd-Frank Act.

Under the act, banks are only allowed to invest up to 3 percent of their Tier 1 capital in such assets, and many are shedding such stakes as a result.

At Goldman, the bank had $15.5 billion invested in private equity or hedge funds, with another $12.1 billion in commitments at the end of first quarter, according to a securities filing.

With $68.5 billion in first quarter Tier 1 capital, Goldman's investments exceed the threshold, which would cap at $2.1 billion.

Other major U.S. banks have already begun shedding other business and investments in the wake of the new capital rules.

On Monday, CNBC reported Morgan Stanley plans to spin off its hedge fund unit FrontPoint Partners within the next three months.

Separately, the Wall Street Journal reported on Wednesday that Morgan Stanley was close to a no-cash deal to give up control of FrontPoint, but would retain a 20 percent to 25 percent stake in the unit for at least five years.

A Morgan Stanley spokeswoman declined to comment.

On July 13, Citigroup Inc announced it had agreed to sell its private equity unit to StepStone Group LLC and Lexington Partners for undisclosed terms. The deal would reduce Citigroup's total assets by $1.1 billion.

Bank of America Corp, the largest U.S. bank by assets, is shedding a $1.2 billion commitment to funds managed by Warburg Pincus LLC, and spun off a $1.9 billion portfolio of private equity investments to New York-based investment firm Sterling Stamos.
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Disclaimer - The author may at times own some of the stocks mentioned in this forum. All discussions are NOT to be construed as buy/sell recommendations. Readers are advised to do their own research and analysis.
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