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

[kennynah]

17jun08 825pm +8 GMT

goldman sachs reported Q2 EPS at $4.58 vs $3.52 expected...

[millionairemind]

As usual, GS blows past estimates, the strongest of the investment banks.

Many ppe. regards GS actually as a GIGANTIC hedge fund in disguise, due to its proprietary trading business and its huge stake in the oil trading business.

Always buy the strongest leader in any group.

[LenaHuat]

Look at GS's pedigree:

Last week, John A. Thain, a former Goldman co-president, accepted the top position at Merrill Lynch, while a fellow Goldman alumnus, Duncan L. Niederauer, took Mr. Thain’s job running the New York Stock Exchange. Another fellow veteran trader, Daniel Och, took his $30 billion hedge fund public.

Meanwhile, two Goldman managing directors helped bring Alex Rodriguez back to the Yankees, a deal that could enhance the value of Goldman’s 40 percent stake in the YES cable network — which it is trying to sell — while also pleasing Yankee fans. The symmetry was perfect: like the Yankees, Goldman, more than any other bank on Wall Street, is both hated and revered.

Robert E. Rubin, a former Goldman head, is the new chairman of Citigroup. In Washington, another former chief, Henry M. Paulson Jr., is the Treasury secretary, having been recruited by Joshua B. Bolten, the White House chief of staff and yet another former Goldman executive.

The heads of the Canadian and Italian central banks are Goldman alumni. The World Bank president, Robert B. Zoellick, is another. Jon S. Corzine, once a co-chairman, is the governor of New Jersey. And in academia, Robert S. Kaplan, a former vice chairman, has just been picked as the interim head of Harvard University’s $35 billion endowment.

And their secret sauce:

Goldman’s secret sauce, say executives, analysts and historians, is high-octane business acumen, tempered with paranoia and institutionally encouraged — though not always observed — humility.

[millionairemind]

Just read this in this week's The Economist... tot it might be relevant here.

Investment banks

Sachs appeal
Jun 19th 2008 | NEW YORK
From The Economist print edition

Regulation may hurt Goldman Sachs more than the markets seem able to

FOR anyone hoping this would be the week when Goldman Sachs's mortality was exposed, it must have been crushing. Net income in the second quarter—a period that included the Bear Stearns debacle—fell by a mere 11% from last year's solid pre-crunch showing, beating expectations by a mile. It looked all the better for being sandwiched between Lehman Brothers' $2.8 billion loss and a sharp profits fall at Morgan Stanley (see chart). This produced a spectacle rare these days: analysts raising their profit estimates for an investment bank.

Goldman is the beneficiary of a flight to quality. Its prime brokerage, which finances trading by hedge funds, posted record revenues as questions arose about other broker-dealers' strength as counterparties. It also saw a sharp rise in assets under management. The underwriting business was strong, too, largely thanks to the rush by writedown-saddled banks to raise new capital. (Fifth Third, a large regional bank, joined the queue this week.)

The seeds of this outperformance were sown before the crunch. Goldman saw trouble coming early and began hedging its mortgage book at the start of 2007, six months before the market turned. This allowed it to sell assets while others were still happy to buy them. It was also an early commodities bull.

As a disciple of fair-value accounting, moreover, Goldman was very conservative in “marking”, or valuing, its holdings of illiquid assets. As some markets recover slightly, it is now reaping gains: virtually all of the securities Goldman sold in the latest quarter fetched prices higher than their valuation on its books, David Viniar, its chief financial officer, told analysts. He revealed relatively little else, a luxury Goldman can afford because it is under less pressure than rivals to provide more data. Lehman's earnings presentation lasted 48 minutes, Goldman's 10.

With most of its peers reeling, Goldman is well placed to leap on opportunities. Mr Viniar hinted at the possible growth in the bank's “level-three” assets (the most illiquid sort) as it snaps up distressed debt. Goldman agreed this week to take on the assets of a defunct structured investment vehicle, or SIV. In another show of chutzpah, it plans to increase staff this year, even as others cut back.

It is not all going Goldman's way. One sign of fallibility was a $500m hedging loss on leveraged loans. Its results would have looked less good (though still beaten expectations) without some one-off gains. A longer-term worry is the tougher regulation investment banks can expect, especially curbs on their leverage, now that they have access to Federal Reserve cash. As a firm built on trading prowess, Goldman has more to lose than its peers. It has already cut its leverage, though only grudgingly and, it stresses, in response to pressure from shareholders and regulators rather than its own reading of its businesses.

All in all, though, Goldman remains an enviable outlier. Not only are its investment bankers weathering the storm, but its analysts, so often in tune with their trading-floor colleagues, have unparalleled power to move markets—as this week's pessimistic opinion of regional banks showed. Mr Viniar said the firm's managers are in two minds, one obsessed with defensive risk management, the other with aggressive risk-taking. They may feel torn, but for the moment they continue to get the balance just about right.

[millionairemind]

Its a DOG EAT DOG world out there.. a little bit of rumours doesn't hurt

Goldman questioned on Bear, Lehman share fall-WSJ
Wed Jul 16, 2008 1:45am

July 16 (Reuters) - Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) has been questioned by chiefs of rivals Bear Stearns Cos and Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz) about speculation that the securities firm had a role in putting pressure on their firms' stocks, the Wall Street Journal said on Wednesday citing people familiar with their talk.

Alan Schwartz, who headed Bear Stearns when it collapsed in March, has asked Goldman CEO Lloyd Blankfein whether there was any truth to talk that in the days preceding Bear Stearns's fall, traders in Goldman's London office manipulated the struggling firm's stock, the paper said.

Lehman Brothers CEO Richard Fuld Jr., whose firm's shares also have been battered, has also spoken with Blankfein. The Lehman chief also contacted traders he felt may have been bad-mouthing his stock, the paper said.

Spreading rumors one knows to be false with the intention of manipulating a public company's price is illegal.

The U.S. Securities and Exchange Commission has been investigating whether investors have looked to profit by spreading rumours to push down Lehman and Bear shares.

Goldman, which strongly denied wrongdoing, never altered its terms for doing business with Bear even as lenders pulled their financing and some trading partners retreated during the troubled securities firm's struggles in early March, the paper said citing a Goldman spokesman.

Earlier this year, JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz) acquired Bear Stearns for a fire-sale price, after the latter collapsed under the weight of the credit crisis and suffered the equivalent of a bank run.

In the weeks before Bear reached its initial deal to sell itself, Goldman Sachs International, which encompasses the firm's European trading units, was one of the most-active parties in trading securities known as credit default swaps that it had bought from or sold to Bear, the paper said citing trading documents involved in a regulatory probe into the collapse.

The documents show that a handful of other prominent firms cut their exposures to Bear Stearns, including Chicago hedge fund Citadel Investment Group and New York hedge fund Paulson & Co., which is run by a Bear Stearns alumnus.

Goldman, Lehman, Citadel and Paulson could not be immediately reached for comment. (Reporting by Dhanya Skariachan in Bangalore;; Editing by Erica Billingham)

[LenaHuat]

More secret sauce from GS in the name of national service*honor :

July 21 (Reuters) - Goldman Sachs Group Inc's <GS.N&gt; Ken Wilson will temporarily leave the firm to advise U.S. Treasury Secretary Henry Paulson on how to resolve the country's banking crisis, the Wall Street Journal said.

Goldman's most senior financial-institutions banker, who has played a big role in capital raisings and reorganizations, will join Paulson to address issues from a broader perspective, the paper said, citing people familiar with the matter.

The move comes as the Treasury and the Federal Reserve grapple with issues including the threat of bank failures, alarming capital levels and a crisis of confidence in important institutions such as Fannie Mae <FNM.N&gt; and Freddie Mac <FRE.N&gt;.

U.S. President George W. Bush made a personal call to Wilson in recent days, asking him to assist Paulson, the paper said. Wilson is expected to serve without pay in a period through January, the paper said.

[kennynah]

who knows...gunning for first assist deputy secretary treasury position maybe ...hahaha...

[LenaHuat]

No, I think gunning for Treasury Secretary in the next administration
Will know the next admin come Nov, either McCain or Obama.

[kennynah]

u've got a point there.....that will make a 2nd consecutive goldslack personnel to hold this appointment...if it happens.

[LenaHuat]

Ah Ken, U mean Goldsack right?