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

[winston]

The Most Important Article You'll Read This Month By Dr. David Eifrig M.D. , Daily Wealth

It really ticked me off.

It was 1986... and my first fall working on Wall Street for Goldman Sachs. It was election season, and Robert Rubin was walking the trading floor. He was head of the fixed-income division. (He soon became co-chair of the company and later Secretary of the U.S. Treasury.)

Rubin asked us if we had turned in our donations to the political party of our choice. He asked each of us – one by one – right on down the desk.

If we said no, he told us he wanted to see a check signed from us soon. When he walked away, I asked what he was up to. The guys on the desk laughed and just told me to cough up a thousand for the Democratic Party by tomorrow. I protested: "But I'm Republican."

The response: "Not anymore!"

I hadn't thought about that moment in a long time until I read the sensational Rolling Stone article recently written by Matt Taibbi. The article is a true "exposé" of the BS that goes on in the financial world.

The subject is one I'm well versed in: The investment bank Goldman Sachs (by now, known by many as "Government Sachs"). Taibbi shreds the company in an article titled The Great American Bubble Machine, and it's an absolute must-read.

The article claims Goldman has helped engineer most of the great asset bubbles of the past 80 years... including the tech bubble, the credit bubble, and last year's enormous rise in oil prices. Taibbi also writes Goldman has packed the highest levels of government with former employees, who help it suck billions of dollars from a gullible public.

It's one of the most damning articles I've ever read in mainstream media. So it's no wonder I've had several friends ask me, "Doc... You worked for Goldman for a long time. What's your take?"

I tell them: It's appalling. And, sadly... mostly true.

For years, Goldman has used fear and greed to control markets and make millions for its employees and shareholders. During the credit bubble peak in 2007, the company doled out over $20 billion to its employees. Its CEO made $65.8 million that year. At last count, the average employee compensation will be around $386,000 for just the first six months of this year.

Sure... the money is insane. But I don't begrudge any smart banker or trader for making money within the rules. It's the way Goldman has stuffed its alumni into the most important positions in government... it's similar to mafia corruption. It ensures they play a major role in fixing the rules for their cronies' benefit... and your loss.

Here's a short list of ex-Goldman heads who've greased the political wheels for the company: Henry Paulson (former CEO, went on to become Treasury Secretary under Bush), John Corzine (former CEO, current governor of New Jersey), Stephen Friedman (former director, became Chief of the New York Fed)... and, of course, the aforementioned Robert Rubin.

Current and ex-Goldman employees won't even consider the possibility there are conflicts of interest with the Treasury Secretary (an ex-Goldman head) deciding to let one of Goldman Sachs' main competitors – Bear Stearns – go belly up.

And it's insulting to think a government employee can give my tax money to a company that was going bankrupt without any oversight or public discussion in Congress. I'm talking about AIG Insurance, which, incidentally, had big deals with Goldman that would have gone sour without the bailout.

Sure, Taibbi went over the top with his assertions. But the spirit of the article – and most of its claims – is 100% true. The fleecing and manipulation of regular folks like you and me is simply outrageous.

Goldman Sachs – and nearly every other Wall Street institution – is not in the business of helping you find safe investments. It's in the business of selling overpriced stocks and bogus mortgages to anyone it can find. It's in the business of siphoning big fees from your 401(k) plan, your mutual fund, your annuity, and your kid's college fund.

This is how Wall Street bankers live in million-dollar mansions in the Hamptons, drive Maseratis, and dash off for $20,000 weekends in London. It's why you probably haven't made a dime in stocks over the past 15 years. Wall Street doesn't care if you make any money... just as long as you keep paying their fees. And the financial policymakers in Washington D.C. who aren't socialist morons are bright capitalists who work indirectly for Goldman. It's a crazy mixture that

Bravo to Rolling Stone and Matt Taibbi. I lived and worked in the environment described in the article. While there are some great people and institutions in New York, I left Wall Street because I couldn't stand the Goldman-style conflicts of interest and political haggling.

The sooner investors wake up and become highly skeptical of everything Wall Street and Washington D.C. do, the better.

[winston]

Great explanation of how you're paying for Goldman Sachs bankers' HUGE bonuses

From Zerohedge:

This is perhaps the most important thing I learned over my years working on Wall Street, including as a managing director at Goldman Sachs: Numbers lie. In a normal time, the fact that the numbers generated by the nation's biggest banks can't be trusted might not matter very much to the rest of us.

But since the record bank profits we're now hearing about are essentially created by massive federal funding, perhaps it behooves us to dig beneath their data. On July 27, 10 congressmen, led by Rep. Alan Grayson (D-Fla.), did just that, writing a letter to Federal Reserve Chairman Ben Bernanke questioning the Fed's role in Goldman's rapid return to the top of Wall Street.

http://www.zerohedge.com/article/former ... 99-profits

[millionairemind]

Goldman has record trading days

By Greg Farrell and Francesco Guerrera in New York

Published: August 5 2009 20:30 | Last updated: August 5 2009 20:30

Goldman Sachs traders made more than $100m in revenues on each of a record 46 days during the second quarter, while losing money on just two days, the bank said on Wednesday, in a filing that underscored the strength of its trading operations.

Goldman also said lawmakers, regulators and shareholders had asked about its bonus awards, a subject that has generated fevered interest this year as the bank has reported strong profits. It “received inquiries from various governmental agencies and self-regulatory organisations regarding the firm’s compensation processes” and was co-operating with the requests.

Goldman last month reported $2.7bn in second-quarter profits, reflecting record revenues of $6.8bn from trading fixed-income securities, commodities, currencies and interest rates. Those so-called FICC revenues were up from the previous high of $6.6bn in the first quarter.

People close to the bank attributed the record quarterly result, filed with the Securities and Exchange Commission, to a boom in fixed-income and equity trading.

Goldman, which has a reputation for exacting risk management, also disclosed it had only two losing trading days – one in which it lost $75m-$100m and another in which it was $25m-$50m in the red.

Sceptics had predicted that after the first-quarter results the unusual conditions that powered FICC revenues would not last. But Goldman’s second-quarter earnings showed it continued to earn unusually high trading commissions, partly owing to reduced competition and pricing power derived from scarce liquidity.

Brad Hintz, analyst at Sanford Bernstein, has forecast the fav­ourable trading conditions will continue. “We believe this cycle still has quite a way to run,” he said in a recent report. “The markets are becoming more liquid and trading volumes are increasing, and we argue this is positive news for the large bond houses on Wall Street.”

Goldman’s recent success has fuelled concerns over its comp­ensation practices among politicians and the public at large. As in past practice, Goldman has set aside almost 50 per cent of net revenues, or $11.4bn, over the first six months of this year, for compensation and benefits. If its strong performance continues, it could pay bonuses comparable to those handed out in 2006 and 2007, the golden years of Wall Street compensation.

[-dol-]

If they can consistently chalk up this kind of hit rate, GS should be the best traders in the world.

Wonder how much of these successes can be attributed to the "flash orders".

[winston]

WHAT IS GOLDMAN SACHS TRADING?

There’s little doubt that Goldman Sachs has the best trading desks on Wall Street. Whether you’re skeptical of their legitimacy, envious or sincerely impressed it’s a firm you’d be foolish to ignore. Goldman moves markets like few firms do. I’ve attached some macro and micro ideas out of Wall Street’s best trading firm. After all, if you can’t beat em, might as well join em:

1) Goldman sees a large divergence between the commercial real estate price estimates in equity REIT’s and CMBS market.

How to play it? Short REITs, buy AAA CMBS or sell protection on AAA CMBX.

2) Goldman sees continuing problems in developed nations that have financed their bailouts (ahem) through increased public debt.

How to play it? Short debt-laden developed economies, long select emerging economies. You can also buy USD, JPY, or EUR puts vs calls on the currencies of commodity exporting nations (AUD, BRL, CAD, NOK).

3) Goldman sees continued weakness in the Japanese economy.

How to play it? Sell the Yen or buy JPY puts. An equity short doubles as a short position for debt-laden countries above.

4) Goldman continues to believe oil prices are heading higher.

How to play it? Buy long dated oil futures. Short the crack spread.

As I often stress, Goldman also likes a number of market neutral strategies, but that’s for another post for another day.

http://pragcap.com/what-is-goldman-sachs-trading

[LenaHuat]

i wana go work for them.... problem is that they probably don wan my services

Lena : got backdoor lobang or not? maybe i start off as pantry uncle...

Hi K
I've just read your post.

Don't have lobang lor.
I always encourage young adults to have a stint at any of the big blue standard corporations. The experience is a huge ++point for their CV. It opens unimaginable doors of opportunities.
The CEO of Opus Publishers, authorized by Michael Jackson's estate to print his official opus, was a Goldman Sach's derivative trader.

[-dol-]

Be their client.

But not good for your karma.

[millionairemind]

Published August 26, 2009

Goldman gives biggest clients exclusive stock tips: report

(NEW YORK) Goldman Sachs Group Inc provides some of its biggest clients stock tips that come out of regular meetings held by analysts and traders at the investment bank, according to a Wall Street Journal report.

Some of the analysts' views, which can provide insight on potential short-term market movements, can differ from research notes Goldman widely distributes to its clients, the Journal reported.

Critics claim that providing the early information to only certain clients hurts customers who aren't given the opportunity to trade on the ideas that come out of the meetings.

Brokerage firms have the right to share their information with various clients as they wish, so long as their analysts' stock recommendations distributed publicly don't contradict what they say internally, said Donald Langevoort, a former Securities and Exchange Commission (SEC) special counsel who teaches securities law at Georgetown University.

Goldman's compliance officers sit in on the meetings, according to the report. 'My guess is the lawyers (at Goldman) have looked closely at this' and determined it doesn't violate securities laws or rules, Mr Langevoort said. 'Nobody on this phone call wants to get into an insider-trading situation.'



The Journal quotes Goldman's stock research head Steven Strongin as saying no one gains an unfair advantage from the meeting and that the short-term ideas do not contradict the long-term forecasts in written research notes.

Clashing short-term and long-term opinions from the same firm is an issue the securities industry's self-regulating body, the Financial Industry Regulatory Authority (Finra), is currently reviewing as part of its rule requiring 'fair dealing' with clients.

A Finra spokesman said the group is currently reviewing comments about a proposed rule that would clarify disclosure obligations allowing firms more flexibility in how they provide views on a stock.

'It's more of a grey area than a black-and-white area,' said John Coffee, a professor of securities law at Columbia University.

The 'fair dealing' rule for investment firms 'hasn't really been applied very strictly,' he said. To make a case that the meetings violated rules, regulators would have to show that a firm 'systematically' ensured that certain clients received the information before others, he said.

The tips at Goldman come out of meetings, called 'trading huddles', the Journal report said. However, very few of Goldman's thousands of clients who get written research from the bank receive recommendations from the huddles, according to the Journal. Citing participants of the huddles, it said that the meetings can last up to about an hour. At the meetings, analysts bring trading ideas and Goldman's traders talk about financial markets and what could trigger movements in specific stocks.

Employees then call and provide the information to top clients, while in-house traders cannot use the tips until after they've been given to customers, the report said.

Recommendations from the meetings usually remain in effect for a week, according to the Journal.

A Goldman spokesman didn't return messages seeking comment. A spokesman from the SEC had no immediate comment. -- AP

[kennynah]

got money...got honey...theory mah...

i hate to say this...but... what's wrong with this approach...

just like you decide to stash S$200K with DBS so that you dont need to queue up with everyone else to do banking... you have a personal wealth banker who will deposit, withdraw and wipe your ass...

it's callED "PRIVILEGE"

[-dol-]

Problem is now many S$200K "mass affluent" customers with all the banks. Think the queue could be forming...

May be eventually have to upgrade to "high networth" or "seriously rich".

Remember my teacher used to tell us that straight-As so common that if you throw a coin in the hawker centre, it will hit a straight-A student. Think if you do the same these days, it has a high chance of hitting a millionaire... and the hawker centre is non air-conditioned.