Goldman Sachs In The News - April 30, 2011

Image via WikipediaBig payday for Goldman Sachs team
Stuff.co.nz

Goldman Sachs, JPMorgan Among Banks Probed by EU Over CDS - 

Blogrunner
Antitrust query: EU investigates investment banks
San Francisco ChronicleHow Goldman Sachs created the food crisis - Boing Boing
Frederick Kaufman's piece for Foreign Policy examines how the Goldman Sachs Commodity Index (GSCI) is responsible for the increase in food prices
How Goldman Sachs Beat the Bubble
            New York Times

"Goldman Sachs Is Out-Of-Control Genius"
By Courtney Comstock
"Goldman went short on the world. They bet against the world and they won."
Hazing at Goldman Sachs - CNBC
There is perhaps no more telling detail about what kind of person works at Goldman Sachs than the story of the Memorial Day weekend meeting William Cohan ...
LOOK FOR SHARES OF GOLDMAN SACHS GROUP TO POTENTIALLY REBOUND AFTER ...
Zacks.com
Hmmmm
The Volcker Rule and Goldman Sachs — The Harvard Law School Forum ...
By Andrew Tuch, Fellow, Harvard Law School...
The Volcker Rule and Goldman Sachs - The Harvard Law School Forum on Corporate Governance and Financial Regulation - A law and economics blog from the Harvard Law School Program on Corporate Governance that gathers the latest news, ...

Yes, the daily news links are back.  Many of you have enjoyed them in the past and some have asked for its return.  So there they are.


Also back are the "Related articles" that you see below.  Many of them are interesting.  I especially like the last one, Spitzer to Holder: Prosecute Goldman Sachs or Resign (crooksandliars.com),  It is a video of Spitzer on CNN that I spoke about last week.  I will post the video tomorrow.  Look for it or go visit the link now.

With the EU heating up an investigation into bankster activities accross the pond it is now up to us on this side of  water to continue the cause of exposing these criminals and with a large voice call for our government to do the right thing by prosecuting those that appear to be guilty.  Then let a juries determine their guilt or innocence.  Justice - which I have been crying for for almost 4 years - must, must prevail.  We must punish the guilty no matter their crime and no matter their wealth or political influence.  If we do not then we have no justice system at all.


Banksters have harmed millions around the globe.  Some have even committed suicide as a result of the losses they incured at the hands of these banksters.  I would say that their seemingly innocent "white collar crimes" can be construed to be accessories to  murder and homicide.  Guilt is guilt.  Punish the guilty.  Let's keep up the fight against those -  like the leaders and ex leaders of Goldman Sachs - who have destroyed lives, families, homes and our children present and future.  "Together We Can Make A Difference"

Related articles

• "Wall Street Rapper" Goes From Goldman To Google (GS, GOOG) (businessinsider.com)
• Goldman Sachs' Profits Fall But Beat Expectations (npr.org)
• Too Big To Jail (twistedeconotwist.wordpress.com)
• Is Goldman Sachs Too Big to Fail? (dealbook.nytimes.com)
• Poor Goldman Sachs (dealbook.nytimes.com)
• How to Win at Goldman: 'Work Hard, Work Hard' (blogs.wsj.com)
• Lloyd Blankfein Has A Secret Door And A Hidden Staircase To Move Through Goldman Sachs (GS) (businessinsider.com)
• Goldman Sachs: Long on chutzpah, short on friends | The Economist (policyabcs.wordpress.com)
• Senate chairman says Goldman Sachs 'misled' clients and Congress over subprime mortgages (birdflu666.wordpress.com)
• Nuns demand that Goldman Sachs ends its excessive bonuses [Ann Andrews CSP] (ecademy.com)
• Senator Carl Levin Calls Goldman Sachs a "Financial Snake Pit" - JDJournal.com (news.google.com)
• Simon Johnson: Could Goldman Sachs Fail? (huffingtonpost.com)
• Spitzer to Holder: Prosecute Goldman Sachs or Resign (crooksandliars.com)

The Big Short of Goldman Sachs

While we are waiting for the Department of Justice and the Government to find and prosecute all the wrong doers on Wall Street, including Goldman Sachs, let's look at some interesting information. John Carney on NetNet helps us distinguish between Goldman Sachs's bets, shorts, hedges, and franchise strengths. He tells us that Blankfein may not have "understood the positions they were taking" when they took "the big short." But really, Blankfein knows when to play the stooge and when to play the genius as all predatory persons do.

But I maintain that Goldman Sachs underwrote some very pukey mortgage securities and knowingly sold them to investors when GS knew those same securities would tank and would result in the company making a lot of money at the expense of pension funds, savings funds, insurance companies, university endowments and municipalities. Where is the justice?

Did Lloyd Blankfein Misunderstand Goldman's Mortgage Bets?
By John Carney-NetNet (CNBC)

Goldman Sachs CEO Lloyd Blankfein and other top executives at the firm may not have understood the positions they were taking in the mortgage market, according to a report released today by the Senate Investigations subcommittee.

The report—which runs to 635 pages—details how Goldman built up a massive short position in mortgage-related assets following the collapse of two subprime Bear Stearns hedge funds. This was referred to as “the big short” within Goldman.

Goldman [GS 151.01 0.41 (+0.27%) ] executives have long maintained that they were not making a massive bet against the US housing market. The short positions, Goldman insists, were merely hedges against other, long positions the firm was taking.

But in the views of the people executing those trades, this is backward. By the time Goldman began building The Big Short, the firm was already fully hedged. The Big Short was a directional trading position on the market—something so close to how a hedge fund might trade that one Goldman trader argued that his group should be compensated like hedge fund managers.

In September of 2007—following the collapse of those Bear Stearns hedge funds—Goldman publicly revealed in its quarterly report that it had positioned itself to profit from the collapse of subprime mortgage values. In a press release, Goldman said that “significant losses” on some positions were “more than offset by gains on short mortgage products.”

Wall Street was stunned. Then-Merrill Lynch analyst Guy Moszkowski said Goldman's trading results were $1.7 billion above his forecast. The move seemed to confirm that Goldman was operating on an entirely different level than everyone else—it was faster, smarter, better than its Wall Street rivals. Goldman’s chief financial officer declined to say just how much the firm earned though the short play, but he did say it was executed across the entire mortgage desk.

When Peter Eavis at Fortune reported on the gains—under the title “How Goldman Defies Gravity”—it caused some turmoil inside the firm. Top Goldman executives did not like the implication that Goldman was placing “bets.” They preferred a narrative in which Goldman’s strength was the firm’s “franchise strength” rather than its trading desks’ prowess at picking a winning position.

Goldman spokesman Lucas Van Praag emailed the article to eight top Goldman executives.

“Once again they completely miss the franchise strength and attribute it all to positions and bets,” then-Goldman president Jon Winkelreid wrote back in a “reply to all” email.

Blankfein weighed in next, claiming that the short position had reduced the firm’s estimates of the market risk on its balance sheets—its value at risk, or VAR. A position that reduces firm-wide VAR can fairly be characterized as a hedge for the company.

“Also, the short position wasn’t a bet. It was a hedge. Ie, the avoidance of a bet. Which is why for a part it subtracted from var, not added to var,” Blankfein wrote.

But Blankfein appears to have gotten this wrong.

Read the entire article here