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

[millionairemind]

BREAKING NEWS
Goldman Sachs reports quarterly loss of $4.97 a share - $2.1B total. CEO cites 'extraordinarily difficult operating conditions.'

Goldman Sachs Reports Wider-Than-Estimated $2.12 Billion Loss
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By Christine Harper

Dec. 16 (Bloomberg) -- Goldman Sachs Group Inc. reported a fourth-quarter loss of $2.12 billion, the first since the company went public in 1999, as asset values and investment-banking fees declined.

The loss of $4.97 a share in the three months ended Nov. 28 compared with net income of $3.22 billion, or $7.01, in the same period a year earlier, the New York-based company said today in a statement. The average estimate of 18 analysts surveyed by Bloomberg was for a loss of $3.73 per share.

Chief Executive Officer Lloyd Blankfein and six deputies gave up bonuses this year after the worst financial crisis since the Great Depression forced Goldman Sachs to convert to a bank- holding company and accept $10 billion from the U.S. government. The firm that set a Wall Street profit record in 2007 cut 10 percent of its employees last month as its stock plummeted 69 percent this year.

``They're a survivor and they continue to pick up market share, but it's going to be volatile and you have to be able to stomach some risk,'' said William Fitzpatrick, an equity analyst at Optique Capital Management in Milwaukee, which oversees $1 billion and owns Goldman Sachs shares. Revenue is ``going to be challenged for at least a 12- to 18-month period,'' he said.

Goldman Sachs and smaller rival Morgan Stanley, the only two of the biggest five U.S. securities firms to survive, changed into banks after investors lost confidence in companies that rely on debt-market funding.

Merrill, Lehman

Merrill Lynch & Co., the third-biggest U.S. securities firm, agreed to sell itself to Bank of America Corp. in September just as Lehman Brothers Holdings Inc., the fourth-biggest, went bankrupt. Bear Stearns Cos., the smallest of the five, sold itself to JPMorgan Chase & Co. in March.

Morgan Stanley will post fourth-quarter results tomorrow.

Warren Buffett's Berkshire Hathaway Inc. in September bought $5 billion of preferred stock in Goldman Sachs, which raised an additional $5.75 billion by selling common shares for $123 apiece to investors. The infusions failed to restore investors' confidence, and the firm received $10 billion from the U.S. government in October as part of a $700 billion financial- industry rescue plan. Goldman Sachs closed yesterday at $66.46 in New York Stock Exchange composite trading.

Glenn Schorr, an analyst UBS AG in New York, estimated in a Dec. 2 note to investors that Goldman Sachs would post a loss of $5.50 a share in the fourth quarter.

``They've performed better than their peers, as only recently have they begun to post some losses,'' said David Killian, a portfolio manager at Valley Forge Advisors LLC in King of Prussia, Pennsylvania, which oversees $700 million and owns Goldman Sachs shares. ``The volatility of the returns is an important component, and the more volatile the less people are willing to pay for it because they can't predict it.''

[iam802]

Goldman Sachs to Sell $5 Billion in Stock, Repay TARP

http://www.bloomberg.com/apps/news?pid= ... efer=home#

April 13 (Bloomberg) -- Goldman Sachs Group Inc., the sixth-biggest U.S. bank by assets, plans to raise $5 billion to repay U.S. government rescue funds after posting profit that exceeded the most optimistic Wall Street estimates.

The New York-based bank said today it will use proceeds from the common stock offering plus “additional resources” to redeem the $10 billion it got from the U.S. Treasury’s Troubled Asset Relief Program. The company said it earned $1.81 billion, or $3.39 a share, in the first quarter as a surge in trading revenue outweighed asset writedowns, beating the $1.64 estimate of 16 analysts surveyed by Bloomberg.

Chief Executive Officer Lloyd Blankfein, 54, is raising capital to shore up finances and repay government money the bank got in October after the bankruptcy of Lehman Brothers Holdings Inc. Goldman Sachs was the most-profitable Wall Street firm before converting to a bank last year and posting its first quarterly loss since the company went public in 1999.

“The only toxic thing on their balance sheet is the TARP and they want to get rid of that as soon as they can,” said Gary Townsend, president of Hill-Townsend Capital LLC. in Chevy Chase, Maryland. The earnings show “they’re taking enormous market share away from virtually everyone else.”

The company, which changed its fiscal year to end in December instead of November, also reported results for the month of December today. They showed the bank lost $780 million, or $2.15 per share, as losses in fixed-income trading and principal investments overwhelmed revenue from other units.

Book Value

Book value per share rose to $98.82 at the end of March from $98.68 in November, and return on equity, a gauge of how effectively the firm invests earnings, was 14.3 percent in the first quarter, the company said.

First-quarter revenue was $9.43 billion. Fixed-income trading revenue was a record $6.56 billion, 34 percent higher than its previous mark, as client-driven income outweighed an $800 million loss on commercial mortgage loans, excluding hedges.

Goldman Sachs benefited as the gap between what banks pay to buy fixed-income securities and the price at which they sell, the so-called bid-ask spread, almost doubled to 19 basis points in six months, according to data compiled by Bloomberg.

Equity Trading

Every other business unit had lower revenue compared with the first quarter of 2008, or reported a loss.

Equity trading revenue was $2.0 billion as slower activity outside the U.S. meant the firm generated fewer trading commissions than a year ago.

Investment banking revenue of $823 million compared with $1.17 billion in the first quarter of 2008, reflecting a decline in leveraged finance activity and fewer mergers and share offerings.

Asset management fees slumped 28 percent to $949 million as assets under management fell 3.3 percent. Securities services, which include the firm’s prime brokerage unit, made $503 million, 30 percent less than the first quarter of 2008.

Goldman Sachs had a $1.41 billion net loss from principal investments, including a $151 million loss from the firm’s investment in Industrial and Commercial Bank of China Ltd.

The bank set aside $4.71 billion to pay compensation and benefits, 18 percent more than the first quarter a year earlier. The expense totaled 50 percent of revenue, up from 48 percent in the first quarter last year. The number of employees, which fell 7 percent during the quarter to 27,989, is 12 percent lower than the first quarter of last year.

Assets Rose

Total assets on Goldman Sachs’s balance sheet rose 5 percent from the end of November to $925 billion as of March 27. Of that, about $59 billion qualified as “Level 3” assets, which are the hardest to value, down from $66 billion at the end of November.

Goldman Sachs raised $5.75 billion by selling shares at $123 apiece in September in an offering that started after the company announced that Warren Buffett’s Berkshire Hathaway Inc. bought $5 billion in preferred stock.

A month later, Goldman Sachs was among nine financial institutions that shared $125 billion in the first payments from the Treasury’s $700 billion bailout program.

“A stock sale would be a good thing for the government; it would be a good thing for Goldman Sachs or any other bank which was able to do it, especially if they were also able to repay the TARP,” said Roy Smith, a finance professor at New York University’s Stern School of Business and a former partner at Goldman Sachs. “They would be free of the high cost of the dividend paid in after-tax dollars and the other restrictions, which everybody realizes they would like to get out of.”

Rivals Pressure

If Goldman Sachs returns the TARP money, it may pressure other banks to follow suit or risk appearing dependent on the government, Brad Hintz, an analyst at Sanford C. Bernstein Co. in New York, said before today’s announcement.

“The right thing for government officials to do will be to delay the GS repayment until a significant group of banks are able to repay simultaneously under some organized plan,” Hintz said.

Blankfein said last week at a conference in Washington sponsored by the Council of Institutional Investors that the U.S. funds Wall Street firms received wasn’t intended to be “permanent capital.”

‘That Minute’

“The minute that an institution is allowed to return the money and is capable of returning the money, while still carrying out its obligations and its role in the capital markets effectively, then it should do it that minute,” Blankfein said.

Goldman Sachs has gained 55 percent this year to close at $130.15 today in New York Stock Exchange composite trading. The price is more than double the stock’s closing low of $52 on Nov. 20.

The company will hold a conference call tomorrow at 7 a.m. New York time to discuss the results and its outlook.

Credit-default swaps protecting against a default by Goldman Sachs dropped 15 basis points after the earnings announcement to 210 basis points, according to broker Phoenix Partners Group. The contracts have fallen 58 basis points the past week and are trading at the lowest since Oct. 14, prices from CMA DataVision show.

[winston]

Did Goldman Sachs Just Call The Top Of The Market? by John Carney

It might go down as one of the all time greatest trades of all time. Goldman watched its share price soar 170 percent since the lows of November, and conducted a rush sale into a bouyant market. Just minutes after the Goldman shares prices, the market got hit by bad retail numbers and the Dow sank 100 points. Now Goldman may be able to ditch the TARP and all its attendant hassles, while its rivals will find it much more expensive--if not impossible--to do the same.

It brings back the old cliche: if the smart guys are selling, should you really be buying?

Others are now wondering if Goldman's stock sale signals the top of the market, at least for financials. If Goldman believed shares were headed still higher, they would have been wise to take the offering slowly. Instead, they rushed to sell in an almost unprecedented combination of early announcement of good results and overnight pricing of a $5 billion offering.

Lots of market watchers, including Boom Doom & Gloomster Marc Faber, have been saying that the markets would drop in late April. Goldman looks to be adopting this view as well.

http://www.businessinsider.com/did-gold ... ket-2009-4

[iam802]

GS missing months.

Worth reading. Maybe they are not the only one doing it.

http://norris.blogs.nytimes.com/2009/04 ... ing-month/

[millionairemind]

And now to make up for the reduced bonus last year...

June 23, 2009
Goldman to pay big bonuses
NEW YORK - GOLDMAN Sachs Group is on pace to make record bonus payouts after a robust first half, the Guardian newspaper reported on on Sunday.

Goldman staff in London were briefed on the outlook and told they could look forward to the bonus hikes if the company registers its most profitable year ever, the report said.

The surge in projected profit can be attributed to a lack of competition and increased revenue from trading foreign currency, bonds and fixed-income products, the newspaper said, citing insiders at the firm.

Bonuses have been a point of contention between the Obama administration and Wall Street, which last fall endured a credit crisis that paralyzed the financial markets.

The US Treasury responded with the Troubled Asset Relief Program (Tarp), which made US$700 billion (S$1.05 trillion) in loans available to banks.

Goldman Sachs received US$10 billion from Tarp, which it repaid last week.

In letters to lawmakers last week, Goldman CEO Lloyd Blankfein said the firm is obligated to 'ensure that compensation reflects the true performance of the firm and motivates proper behaviour.'

A Goldman Sachs spokesman in New York was not immediately available to comment on Monday. -- REUTERS

[winston]

They have just allowed their staff to fly Business & First Class again, as of a few days ago.

[millionairemind]

Conspiracy theory...

Wednesday, June 24, 2009
Goldman Sachs: "Engineering Every Major Market Manipulation Since The Great Depression"
Posted by Tyler Durden at 2:58 PM
With a subtitle like "From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression - and they're about to do it again" run, don't walk, to your nearest kiosk and buy Matt Taibbi's latest piece in Rolling Stone magazine. One of the best comprehensive profiles of Government Sachs done to date. Speaking of GS, they sure must be busy today, now that Bernanke is about to be impeached and take the fall for all their machinations.
http://zerohedge.blogspot.com/2009/06/g ... major.html

[blid2def]

Conspiracy theory...

Wednesday, June 24, 2009
Goldman Sachs: "Engineering Every Major Market Manipulation Since The Great Depression"
Posted by Tyler Durden at 2:58 PM
With a subtitle like "From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression - and they're about to do it again" run, don't walk, to your nearest kiosk and buy Matt Taibbi's latest piece in Rolling Stone magazine. One of the best comprehensive profiles of Government Sachs done to date. Speaking of GS, they sure must be busy today, now that Bernanke is about to be impeached and take the fall for all their machinations.
http://zerohedge.blogspot.com/2009/06/g ... major.html

Okay now that you pointed me here... Sui boh? Hat tip Zerohedge for putting it on docstoc.

[winston]

People inside GS Asia are already thinking about what to do with their coming bonus.

Results in Asia has been good and they are making money again.

Premium Class flights have been reinstated and they are also hiring again.

[millionairemind]

Maybe we will finally know how GS juice the market??

Ex-Goldman employee accused of cyber-theft

By Greg Farrell in New York

Published: July 6 2009 19:17 | Last updated: July 7 2009 00:03

US law enforcement officials arrested a former Goldman Sachs employee over the weekend, accusing him of stealing sensitive automated trading codes and uploading them to a server based in Germany.

Sergey Aleynikov, a computer programmer who joined Goldman in May 2007 and resigned last month, was arrested as he disembarked from a flight at Newark airport and charged with theft of trade secrets and transfer of stolen property.

According to an affidavit filed by the Federal Bureau of Investigation, Mr Aleynikov, who held the title of vice-president at Goldman before leaving on June 5, was part of a team that developed and improved the software codes in the firm’s trading programs. He was bound by Goldman’s standard confidentiality agreements.

The FBI affidavit alleges that Mr Aleynikov, after accepting the offer from his new firm, which has yet to be identified, downloaded about 32 megabytes of proprietary trading platform data from his desktop computer at work as well as his laptop at home on four separate occasions between June 1 and June 5, his last day at Goldman.

Goldman, which monitored Mr Aleynikov’s e-mails and computer activity in his final days at the firm, brought the matter to the attention of the FBI. The firm had no comment on Mr Aleynikov or his arrest, but a person familiar with the matter insists that neither the firm, nor any of its clients, sustained any financial harm as a result of the file transfers.

According to the FBI affidavit, Mr Aleynikov allegedly tried to disguise his last file transfer by erasing his computer’s most recent commands. But Goldman retains a back-up copy of each computer’s history.

Mr Aleynikov was released on Monday after posting $750,000 bail.

Copyright The Financial Times Limited 2009