There has been a lot of forgetting and re-writing of Goldman Sachs history. A real gem can be found
here. The following three paragraphs excerpted below is a case in point. These three paragraphs have been re-written the way it should read if Goldman's true worth were stated. All the re-written parts are bracketed and in
red.
Stock Picks: Goldman Sachs is in a class above the rest
By Ian Shaffer - The Gazette
Following the 2008 financial crisis and the bankruptcy of Lehman
Brothers, Goldman converted from an investment bank into a bank holding
company in order to gain access to capital from the U.S. Federal
Reserve. As a result, the company was required to limit the amount of
leverage used on its balance sheet. This provision helped reduce the
company’s risk profile, especially during the severe economic recession.
Shortly thereafter, Goldman received an important vote of confidence
from famed investor Warren Buffett. Buffett’s company, Berkshire
Hathaway (NYSE: BRK.A/BRK.B), invested $5 billion in Goldman at a
critical moment in time. By taking a stake in the company while many of
its competitors were struggling to survive, Buffett helped bolster
investment sentiment regarding Goldman’s long-term prospects.
Today, Goldman Sachs is once again a leading financial services
institution. The firm generates revenue and income from four main
divisions, including Investment Banking, Institutional Client Services,
Investing and Lending, and Investment Management. Institutional Client
Services accounted for 55 per cent of the company’s earnings in 2012 and
is the company’s largest division.
Read the entire article
here
. . . . . . . . . . . . . . . . . . . .
Revised edition to include some truths: that, indeed, Goldman Sachs is Above the Law
Following the 2008 financial crisis (in
which Goldman Sachs played a key role in creating toxic assets and
selling them to unsuspecting pension and savings funds) and
the bankruptcy of Lehman Brothers, Goldman converted from an
investment bank into a bank holding company in order to gain access
to capital from the U.S. Federal Reserve (and
in order to gain capital and access to borrowing billions from the
Fed discount window, estimated at $800 billion, and in order to
obtain from the government the implicit guarantee that it would
always be bailed out whenever it got into trouble). As a
result, the company was required to limit the amount of leverage used
on its balance sheet (When did Goldman
ever have to limit any leverage? Sometimes it borrowed in a 25 to 1
ratio). This provision helped reduce the company’s risk
profile, especially during the severe economic recession. (The
real risk was put onto the American taxpayer who bailed Goldman out and onto the public which bought its toxic MBS assets.
The only reason that risk was reduced was because Goldman was rescued
by the Federal Reserve. Since then, risk is no longer a concern as
the government will always bail the banks out. Goldman still uses
its money to hedge or bet whenever such hedging and gambling assures them good returns.)
Shortly thereafter, Goldman received an important
vote of confidence from famed investor Warren Buffett. Buffett’s
company, Berkshire Hathaway (NYSE: BRK.A/BRK.B), invested $5 billion
in Goldman at a critical moment (Yes, Goldman
was a zombie bank just before Buffett lent it $5 billion. Buffet received a good
10% return on his investment; the public did not.).
By taking a stake in the company while many of its competitors were
struggling to survive, Buffett helped bolster investment sentiment
(Buffett was worried about his own skin what
with his Moody's agency having rated the toxic assets of banks as AAA
when they were junk) regarding Goldman’s long-term
prospects. (Goldman's long-term prospects look
great—it has renewed its proprietary trading, it has enough people
in government to control the making of rules under Dodd-Frank and it has millions
with which to lobby politicians to get any rules or regulations
watered down to its satisfaction).
Today, Goldman Sachs is once again a leading
financial services institution. (With all that
help from the Federal Reserve, the Treasury, the Buffetts of the
world and the politicians, of course, Goldman is doing just fine now
that all the laws regarding fraud have been erased from the DoJ
rule book.) The firm generates revenue and income from four
main divisions, including Investment Banking, Institutional Client
Services, Investing and Lending, and Investment Management.
Institutional Client Services accounted for 55 per cent of the
company’s earnings in 2012 and is the company’s largest division.
(Don't forget that Goldman has a new
proprietary trading arm that used to return billions in salaries, bonuses and stock. Goldman treats its
clients as muppets—with little or no regard. If Goldman can make a
profit on clients, it will do so. During the crisis, Goldman Sachs used
Accounting Control Fraud to bolster its balance sheet so that the
executives could use the profits to pay themselves huge bonuses.
All it had to do was pay fines for all its frauds. What a scam!)
You can read the original article
here but I wouldn't bother to do so
You may want to read some background information on Goldman here
0 COMMENTS:
Post a Comment