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As we have been reading the latest coverage on the AIG bailout from the SIGTARP report and the Treasury Secretary Geithner’s Congressional testimony, a nagging question remains unresolved: why did AIG get bailed out but the monoline bond insurers did not? . . . I hate to get sucked into the vampire squid line of thinking about Goldman, but the only explanation i can think of for why AIG got rescued and the monolines did not is because Goldman had significant exposure to AIG and did not have exposure to the monolines. When it became clear that AIG could face...

Let us now praise Goldman Sachs, for the sole reason that it and it alone among the major, capital-intensive Wall Street institutions – both recently deceased and still living – actually understands something about risk and risk-taking. By his own admission, Lloyd Blankfein, Goldman’s chief executive, ranks risk management as his number one daily priority, even ahead of doing God’s work. “I’m a risk manager and I’ve been that for a long time, a lot longer than I’ve been CEO,” he said recently at a breakfast in New York sponsored by Fortune magazine. “I live 98 per cent of my...

The 70% Discount on Goldman's $500M Gift IT’S BEEN DUBBED the apology with a half-billion-dollar gift attached. In an attention-grabbing move this week, Goldman Sachs (GS: 173.26*, +3.25, +1.91%) said it would launch a $500 million initiative to help small businesses with Warren Buffett as a key adviser, an announcement that coincided by hours with a public mea culpa from CEO Lloyd Blankfein for mistakes in the financial crisis. But it turns out Goldman’s program includes its own discount — the kind that only an investment banker could love. According to a review of Goldman’s program by SmartMoney in consultation...

November 23, 2009 Globetrotting puts 'official' figures into perspective One constant surprise for me is the emotional state of the discussions I encounter about the health of the UK economy Jim O’Neill For much of the period since the end of the summer, I have been travelling around the world for my exciting but demanding job. I have been to Brazil, China, twice, once on a very long trip, Hong Kong, Singapore, Turkey and to many places in Europe. One constant surprise for me is the emotional state of the discussions I encounter about the health of the UK economy....

A New York Times editorial slammed Goldman Sachs for its role in the financial crisis and said that instead of paying big bonuses to its employees it should make a multibillion-dollar gift to help reduce the U.S. national debt. The editorial, published November 21, attacked Goldman for everything from its top executive's failure to apologize properly for his investment bank's part in creating the crisis as well as Goldman's awarding of bonuses related to profits that the paper said were boosted by a government bailout. The Times sniffed at Goldman CEO Lloyd Blankfein's acknowledgment last week that his bank "participated...

Bombshells are falling in light of the new report from Neil M. Barofsky, special inspector general for the Troubled Asset Relief Program. Derivatives specialist Janet Tavakoli of Tavakoli Structured Finance is calling for the undoing of what she views as essentially a Goldman bailout. Here's NYT's Gretchen Morgenstern with the backstory: The Fed, under Mr. Geithner’s direction, caved in to A.I.G.’s counterparties, giving them 100 cents on the dollar for positions that would have been worth far less if A.I.G. had defaulted. Goldman Sachs, Merrill Lynch, Société Générale and other banks were in the group that got full value for...

Goldman Sachs employees can't help themselves when they see a buck. In the name of doing "God's work," Lloyd Blankfein apparently is going along with the GS is evil mantra and is going to screw GS shareholders and keep more GS money for himself and his GS top dogs. Despite record net income and compensation at Goldman, analysts expect its 2009 earnings per share to be 22% lower than in 2007. The decline is caused by GS issuing more than 100 million shares in the past year to bolster Goldman's financial position and capital. Major shareholders have said that reining...

(snip) "We participated in things that were clearly wrong and have reason to regret," said Goldman Sachs’ Lloyd Blankfein. "We apologize." Blankfein had told a British newspaper the other day that Goldman was doing “God’s work”. That caused a firestorm online. (snip)

Dear Lloyd Blankfein: You know it, don’t you? You know that it doesn’t matter. You can’t win. You could shed tears in an hour-long mea culpa on Oprah! You could pay yourself no more than one dollar for the next ten years. You could pledge $5 billion to a hundred of Barney Frank’s favorite charities. meanstreet And it still wouldn’t matter. The public anger towards Goldman is just too hardened. In an economy full of losers, everyone is fixated on hating the winner. And that kind of hate doesn’t just go away. It takes time to dissipate. And, unfortunately, the...

NEW YORK (Reuters) – Goldman Sachs Group Inc (GS.N) could have suffered dramatic losses if the federal government had not intervened to prop up American International Group Inc (AIG.N), according to a government report. The report by the special inspector general for the government bailout program raises doubts about Goldman's previous claims that it was hedged against potential AIG losses. Last fall, as the financial services industry stood on the brink of collapse, the government stepped in with an unprecedented effort to rescue the system. AIG was among the companies that received billions of dollars from the U.S. Treasury's Troubled...

Sorry Lloyd: NO SALE “We participated in things that were clearly wrong and have reason to regret,” Blankfein, 55, said at a conference in New York hosted by the Directorship magazine. “We apologize.” But then there's this... Goldman Sachs, the most profitable securities firm in Wall Street history, had a record profit in the first nine months of this year and set aside $16.7 billion for compensation expenses. No they didn't. Their "profit" was entirely ill-gotten. About $10 billion from the government via the AIG conduit, which they had a ZERO chance of collecting had AIG filed bankruptcy. Another $21...

The Sacramento Municipal Utility District sued Goldman Sachs, Morgan Stanley and 45 other financial firms Thursday in Sacramento federal court for allegedly rigging bids in bond-derivatives markets and defrauding the utility. SMUD joined at least six city and county governments in California that already have filed similar lawsuits arising from a federal investigation made public in 2006. Many other public entities around the country have joined in lawsuits seeking class-action status. The SMUD filing is the first to name Goldman Sachs as a defendant, according to lawyers working with the utility. The litigation deals with bond-related financial instruments often used...

hat's because while Goldman traders regularly have the Midas touch when it comes to the firm's own fortunes, they seem to have a penchant for capital destruction when it came to the management of its charitable holdings. Sure, 2008 was an unusually tough year, but the filing shows that the Goldman Sachs Foundation managed to vaporize more than $100 million in assets in 2008, even as it executed thousands of trades on everything from obscure stock indexes to commodities to hedge funds. As a result, foundation assets fell by nearly a third last year For all this, the Goldman Foundation...

Perhaps hearing that CEO Lloyd Blankfein stated that Goldman Sachs' was now doing "God's work", Buffett on Wednesday visited Goldman's headquarters at 85 Broad Street--maybe to make sure the 10% dividend on his muilti-billion preferred share investment was secure. Since never before has earning billions with the help of a massive government bailout been considered "God's work." I have it on good authority that though Buffett was given a tour of Goldman's entire trading floor, he didn't spot a bible in the place. And, although he did speak to the Goldman congregation. These were dubbed "town-hall style meetings."

IF THIS DOESN'T HACK YOU OFF, NOTHING WILL!!! Take your blood pressure meds, a Prozac and click on the link. It was described thus by an earlier critic of the madness we're now living through: “By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many (THAT'D BE MOST OF US), it actually enriches some.” (THAT'D BE GOLDDMAN-SACHS!) John Maynard Keynes, The Economic Consequences of The Peace, 1920 Obozo and Bawney Fwank are...

As we pointed out recently, excess reserves at banking institutions have hit yet another all time record over $1 trillion, courtesy not just of the Fed's burgeoning reliquification efforts via direct asset purchases, but also due to its strategy to wind down the SFP program, and keep the Federal debt level under the legal cap, thereby providing even more liquidity to banks, to the tune of$185 billion. Yet if you thought that this inability to pass liquidity over into the broader currency pool was something to be concerned about (you know, that whole lending to consumers thing), you were wrong....

Lloyd Blankfein, the CEO of Goldman Sachs (GS), has put an unusual spin on the bank's activities. He says his firm is doing "God's work." This may seem like an audacious statement....

Goldman wasn’t the only contributor to the systemic risk that nearly toppled the global financial markets, but it was the key contributor to the systemic risk posed by AIG’s near bankruptcy. When it came to the credit derivatives, American International Group, Inc. (AIG) was required to mark-to-market, Goldman was the 800-pound gorilla. Calls for billions of dollars in collateral pushed AIG to the edge of disaster. The entire financial system was imperiled, and Goldman Sachs would have been exposed to billions in devastating losses. A Goldman spokesman told me its involvement in AIG’s trades was only as an “intermediary,” but...

The Associated Press and the Wall Street Journal report that Wall Street giants Citigroup and Goldman Sachs have been issued the swine flu vaccine for their "at risk" employees despite the fact that there are massive shortages of the vaccine nationwide. The rarity of the vaccine has made it a hot commodity, one in which movers, shakers, traders, and bailout recipients now have jumped to the front of the line when it comes to what President Obama declared to be a National Emergency in late October. Reaction to the news has been swift, fierce, and angry. Senator Chris Dodd of...

During the Arlidge visit with Goldman, CEO Lloyd Blankfein spewed about one piece of BS for every billion dollars Goldman has made since the financial crisis started: Here's Blankfein or one of his lieutenants: ....with Lehman Brothers and Bear Stearns off the street, Merrill Lynch a crippled shadow of its former self, and neither Citigroup nor UBS the forces of old, Goldman has a bigger slice of a growing pie. "We didn’t f*** up like the other guys. We’ve still got a balance sheet. So, now we’ve got a bigger and richer pot to piss in," is how one Goldman...

Is Lloyd Blankfein trying to provoke the enemies of Goldman Sachs? That was the first question that sprung to mind when we found the chief executive of Goldman smiling at us from the top of a very long profile of the firm that begins with the headline "I'm doing 'God's Work.' Meet Mr. Goldman Sachs. “We’re very important,” Blankfein is quoted as saying in The Times of London. “We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s...

LONDON (Reuters) - The chief executive of Goldman Sachs, which has attracted widespread media attention over the size of its staff bonuses, believes banks serve a social purpose and are doing "God's work."...

Treasury Blocks the Sale of Tax Credits by Fannie By NICK TIMIRAOS The U.S. Treasury blocked Fannie Mae's proposed sale of nearly $3 billion in low-income housing tax credits to Goldman Sachs Group Inc. and Berkshire Hathaway Inc. on Friday after concluding that the deal was too costly for taxpayers. The extraordinary move was the latest sign of tensions within the Obama administration over how to balance political and financial pressures resulting from the housing crisis. Fannie Mae had agreed to sell roughly half of its $5.2 billion tax-credit portfolio and had received approval to proceed with the sale from...

Rep Jan Schakowsky (D-IL) recently met with senior officials of Goldman Sachs. The confusion she displayed during that meeting is astonishing. Here is her report : This week I had an opportunity most Americans would relish, just as I did. I was able to unload on two top executives of Goldman Sachs who descended from on high to my office because I clearly needed some educating. One was a Vice President and the other their Chief Risk Officer. I had authored a letter on October 28, along with Congressman Peter Welch, that read, "We understand Goldman Sachs is expected to...

NEW YORK (MarketWatch) -- Some big Wall Street banks are girding against the swine flu, but a flap over how the firms got the vaccine will make them miserable. The public is outraged about reports that Citi , Goldman Sachs Group Inc. and Morgan Stanley along with other big New York employers, received hundreds, even thousands, of H1N1 vaccine doses before hospitals and other healthcare providers, many of which have run out of the precious drug

We've been trying to figure out what, if any, preparations Wall Street has been taking to guard against H1N1. For the most part, the banks have been coy about their activities. But as noted on The Today Show this morning, several banks have been among the early recipients of H1N1 vaccine, allowing them to get ahead of hospitals in some instances. The story was originally broken by BusinessWeek this week. Goldman Sachs (GS) has received 200 doses in total -- the exact same as Lennox Hill hospital. Health officials say corporate partners are always part of the distribution of any...

This year's conference of the Francophone European Association for Bahá’í Studies (Association francophone européenne des études bahá’íes, AFEEB) on 24 and 25 October 2009 in Luxembourg discussed the future world order and global governance. The programme included a presentation of the concept of a United Nations Parliamentary Assembly (UNPA) by the Chairman of the Committee for a Democratic U.N., Andreas Bummel. Outlining the path towards a directly elected world parliament, Mr Bummel stressed the "spiritual dimension" of the efforts. "The establishment of a UN Parliamentary Assembly would represent a changed consciousness. For the first time in human history such a...

As if $22 billion in bonuses were not enough, Goldman Sachs would now like to obtain another $1 billion in tax benefits from the federal government. As with the $12.9 billion that Goldman Sachs received from the U.S. government via payments made to the American International Group, Goldman Sachs would obtain an indirect federal benefit by using tax credits the government provided to Fannie Mae to offset its own profits and thus its federal tax payments. As the Wall Street Journal reported, Goldman Sachs might be purchasing up to $1 billion of Fannie Mae's tax credits. However, the tax credits,...

Hmmm.... maybe late, but not never! WASHINGTON — In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting. Right. On October 31st of 2007 I said: Realize this folks - some of these "boys" on Wall Street have gone so far with their hubris that they have, effectively, shorted your house! That'd be Goldman, who actually shorted subprime mortgage bonds (so they said)...

<p>Yesterday, I linked to an anonymous blogger/Goldman apologist who wrote that Tavakoli "has always been more bark than bite. Being provocative is part of her shtick."</p> <p>In August 2007, I publicly challenged the fact that AIG took no write-downs whatsoever for its credit default swaps on underlying mortgage related “super senior” positions. I used the example of its aggregate $19.2 billion in credit default swaps on super senior positions backed by BBB-rated tranches of residential mortgage backed securities. I spoke with Warren Buffett, but only about what I had already told the Wall Street Journal (Dear Mr. Buffett Pp. 164-165, 246).</p>

A much clearer picture is developing of what went on during the middle of the financial crisis, when AIG was bailed out by the government and Goldman Sachs ended up receiving 100 cents on the dollar from AIG on various instruments. The clearer picture is the result of Janet Tavakoli's provocative article, Goldman’s Lies of Omission. In the article, she claims that GS CFO David Viniar lied when he said GS's exposure to AIG would be insignificant. A anonymous Goldman apologist who writes at Economics of Contempt responded to Tavakoli's article, calling the article part of a, "ridiculous conspiracy about...

It's time to finally lay to rest claims stretching back as far as 2007 that Goldman Sachs was peddling securities backed by risky home mortgages while it was secretly betting that the US housing market was in trouble. Far from being "secretly" down on the US housing market, very early on Goldman was publicly and privately warning that home prices would decline and that this decline would have an impact on mortgage backed securities. The complaints about Goldman being on both sides of the mortgage trade stretch at least as far back as December, 2007. Ben Stein wrote a column...

WASHINGTON — In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting. Goldman's sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation's premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies. Only later did investors discover that what Goldman had...

WASHINGTON – In 2006 and 2007, Goldman Sachs Group Inc. peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages but never told the buyers that it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting.....

Apparently there's a loophole in the law that allows barred foreign citizens to enter the United States. They just need to have a meeting with Goldman Sachs (GS). At least that's our interpretation of this story. WSJ: Aluminum magnate Oleg Deripaska met with FBI agents in August and earlier this month as part of a continuing criminal probe, according to two administration officials. The focus of that probe couldn't be learned. Mr. Deripaska used the opportunity of his recent U.S. visits to meet with top executives of U.S. investment banks Morgan Stanley and Goldman Sachs Group Inc. The aluminum giant...

When the historians finally finish sorting through the appalling decisions that have been made in the past two years, this one will probably be at the top of the heap. Last fall, as AIG began to realize how screwed it was, it started negotiating with the counterparties to all the credit default swaps it had written. One of the AIG's goals was to persuade these counterparties- These sorts of negotiations are exactly what should happen when a company gets in trouble. It goes to its creditors and says, look, we can't pay you everything, so here's your choice: Take something,...

Sounds like it to me. Interesting info out of FT: The Galleon hedge fund at the centre of an insider trading scandal paid hundreds of millions of dollars a year to its Wall Street banks and in return regularly received market information that would not have been disclosed to most investors, executives familiar with the matter say. A person familiar with Galleon, whose founder, Raj Rajaratnam, was charged with insider trading this month, said it paid about $250m to its banks last year. Executives who dealt with the fund said it paid more in fees and other charges during the...

MOUNT LAUREL, N.J. — If Republican Chris Christie is being outspent by Democratic incumbent Gov. Jon Corzine in New Jersey's down-to-the-wire gubernatorial election, independent Chris Daggett is being swamped. Corzine, a former Wall Street executive who funded his own winning campaigns for U.S. Senate in 2000 and governor in 2005, is paying his own way again his re-election effort.

Congress Has 43,457,362 Reasons to Help Goldman Sachs Embattled Firm and Its Employees Spread Millions Around Washington in Donations and Lobbying Expenses 95 Not all their money has gone for mansions and Ferraris. Employees of Goldman Sachs are listed as a top contributor to 55 separate members of Congress. (ABC News Photo Illustration) The embattled Goldman Sachs investment banking firm and its employees have spent more than $43 million dollars on lobbying and campaign contributions to cultivate friends and buy influence in Washington, D.C. since 1989, according to an ABC News analysis of campaign finance records compiled by the Center...

It is by now well known that the banks on the other side of credit default swaps sold by AIG got paid out at par when the government bailed out the insurance giant. But what isn't as well known is that by deciding to pay AIG's counter-party in full, the Federal Reserve was reversing months of work AIG executives had done to convince the banks to take a haircut on their positions Bloomberg reports that the documents were similar to those drafted by AIG, except for one crucial detail. Part of a sentence in the document was crossed out. It...

Goldman Sachs Defends Dark Pools, Short Selling By JOAN E. SOLSMAN Goldman Sachs Group Inc. defended a range of trading practices currently under regulatory scrutiny, including dark pools and short selling, in a report to the Securities and Exchange Commission and a series of posting on its Web site. In defending dark pools, private venues where large blocks of securities are traded anonymously, Goldman said they are simply the result of technology improving on the kind of non-displayed liquidity that has always existed in the market. The firm, which has reaped huge trading profits in the last two quarters, said...

Janet Tavakoli is the president of Tavakoli Structured Finance, a Chicago-based firm that provides consulting to financial institutions and institutional investors, among those who have sought her opinion on derivatives, Warren Buffett. In an email to me, Janet writes: It is a strong statement to say that a CFO lied to the public, and in my opinion, David Vinear, Goldman Sach’s CFO lied about Goldman’s exposure to AIG while the AIG bailout was in progress in September 2008. Viniar spoke about risk management, but that is a separate issue from whether or not Goldman Sachs would have money at risk...

Back in 2003, the New Jersey Transportation Trust Fund Authority, which funds rail and road projects in the state, sold $345 million in auction-rate bonds. That's where the trouble began: Bloomberg: “This vividly shows the risk of entering into interest- rate swap agreements,” said Christopher Taylor, former executive director of the Municipal Securities Rulemaking Board in Alexandria, Virginia. “The world’s got to see what stupidity even the sophisticated investors like the transportation fund can get into.” While New Jersey replaced the debt with fixed-rate securities in 2008 after the $330 billion auction-rate bond market froze, the swap -- in which...

Goldman Sachs has hit the headlines again today, and for once the story does not concern the generous remuneration packages awarded to its staff. According to Felix Salmon at Reuters, Henry Paulson (pictured), the former US Treasury Secretary who was at the helm when the financial crisis hit in the autumn of 2008, held a meeting with Goldman Sachs’s board in Moscow in which he revealed details of future government policy. The revelation is contained in a new book, Too Big To Fail, written by New York Times columnist Andrew Ross Sorkin, which describes the events leading to the collapse...

The prospect of Goldman Sachs awarding record bonuses in the wake of the financial collapse has the potential to incite a broad-based populist backlash, argues Martin Sieff. He explores how Wall Street has roused the public's ire in much the same way as did war profiteers in 1920s Weimar Germany. Why doesn't Goldman Sachs order its senior executives to wear silk top hats and 19th century long jackets with tails, and encourage them to kick beggars in the street with cable TV news teams covering them? They seem to be doing everything else they possibly can to discredit the capitalist...

A decade ago, when Goldman Sachs was a private partnership, it had $6.5bn in equity and its 220 partners, most of whose money was tied up in the firm until they retired, took good care of their pot of gold. The bank’s trading and principal investing division – the part that took the most risks with partners’ capital – was balanced with its fee-based investment banking and asset management divisions. Trading contributed about a third of its revenues in the two years leading up to its 1999 initial public offering. After it sold shares in the IPO to outside investors...

The vice-chairman of Goldman Sachs has launched an astonishing defence of bumper bonuses just a year after bankers brought the world's economy to the brink of collapse. In a speech likely to recall fictional banker Gordon Gekko in the film Wall Street - whose mantra 'greed is good' came to sum up the excesses of the 1980s - Lord Griffiths claimed taxpayers should 'tolerate the inequality'. And he insisted that banks should not be ashamed of rewarding staff. Lord Griffiths (left) has echoed the 'Greed is good' maxim by Gordon Gekko, played by MIchael Douglas in the film Wall Street,...

When sober-minded individuals begin to regard an enterprise within a nation as "an enemy of the people" you can bet that some serious blood is going to flow. This is now essentially the situation for the Goldman Sachs company, which last week announced third-quarter earnings of over $3 billion largely derived from converting zero percent loans from taxpayers into zero risk profits off of anything paying more than zero percent in interest, revenue, or dividends. The "people" across this big country may not have a clue how any of this is done, and there may be much to fault them...

Aided and abetted by imposters posing as authentic American citizens the United States of America has been taken over by an authentic dictator. How could so many millions of U. S. citizens just gently cede their heritage and birthright so easily; without more than a whimper? Assisted by genuine anti-American leaders Nancy Pelosi and Harry Reid, actually elected by unknowing and uninformed lemmings, Barack Hussein Obama has surely seized the ultimate power of dictatorship and is making decisions not within the established authority of the office of President, which are opposed only by vocal chants from a gaggle of conservatives...

second and more serious battle of Copenhagen is shaping up, in mid-December, when a world conference gathers to impose limits on greenhouse gases to stop “global warming.” Primary purpose: Rope in the Americans who refused to submit to the Kyoto Protocols that Al Gore brought home in the Clinton era. The long campaign to bring the United States under another global regime—the newest piece in the architecture of world government—has been flagging since 2008. Then, it seemed a lock with the election of Obama and a veto-proof Democratic Senate. Why has the campaign stalled? Because global warming has stalled. The...