Wednesday, July 29, 2009

Goldman Sachs: The Great Vampire Squid Watch — July 29, 2009

Items of Interest:

Nomi Prins / Mother Jones:
How You Finance Goldman Sachs’ Profits -- As a recent New York Times article (and many other publications in different words) said, "For the most part, the worst of the financial crisis seems to be over." Sure, the crisis may appear to be over because the major banks of Wall Street are speculating well with government subsidies. But that's a dangerous conclusion. It doesn't mean that finance firms could thrive without the artificial, public-funded assistance. And it certainly doesn't mean that consumers are any better off than they were before the crisis emerged. It's just that they didn't get the same generous subsidies.

Michael Lewis / Bloomberg:
Bashing Goldman Sachs Is Simply a Game for Fools -- From the moment I left Yale and started working for Goldman Sachs, I’ve felt uneasy interacting with those who don’t.

It’s not that I think less of Goldman outsiders than I did while I remained among you. It’s just that I feel your envy, and know that nothing I can do or say will ever persuade you that I am no more than human...
Rumor No. 5: Goldman Sachs is “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
Those words are of course taken from a recent issue of Rolling Stone magazine and they are transparently false.

For starters, the vampire squid doesn’t feed on human flesh. Ergo, no vampire squid would ever wrap itself around the face of humanity, except by accident...
ClusterStock: Michael Lewis: Goldman Sachs Is NOT A Vampire Squid
Ned Potter / ABC News:
Wall Street and the World of Flash Stock Trades -- Goldman Sachs, Others Profit From Info Received Milliseconds Before Public Does . . .

The computers have become traders in just the last few years, say market people. One particularly visible part of what they do is called High Frequency Trading, in which machines, programmed to look for market trends, may buy or sell a stock in milliseconds...

Goldman Sachs is among them, though it said less than 1 percent of its corporate revenue comes from this kind of trading. Companies make money by buying low and selling high, but they may also get fees for executing so many trades so quickly...
Mike Konczal / The Atlantic:
How to Understand High Frequency Trading -- So as the debate unfolds, remember to ask yourself, (1) whose information is being exploited by whom and how, (2) does this make financial markets stronger and more efficient - say by providing liquidity - during a downturn when markets need them the most, and (3) what is this doing to the price mechanism - is it helping prices converge to fundamental values or driving them further away? The evidence currently looks like HFT is doing bad things on all three accounts.

Paul Wilmott / NY Times:
Hurrying Into the Next Panic? -- Thus the problem with the sudden popularity of high-frequency trading is that it may increasingly destabilize the market...

Buying stocks used to be about long-term value, doing your research and finding the company that you thought had good prospects. Maybe it had a product that you liked the look of, or perhaps a solid management team. Increasingly such real value is becoming irrelevant. The contest is now between the machines — and they’re playing games with real businesses and real people.

The Recession is.... Over??

Newsweek: The Recession Is Over
Daniel Gross / Newsweek:
The Recession Is Over -- Now what we need is a new kind of recovery...

The Great Recession, which rolled over our financial lives like one of P.J. Keating's giant pavers, is most likely over. Home sales, while still far below the levels of a year ago, have risen for three straight months—a first since 2004. The stock market has rallied 44 percent since March, thanks to renewed optimism and improving earnings from big companies like Goldman Sachs and Apple. In June, seven of the 10 indicators in the Conference Board Leading Economic Index pointed upward, including manufacturing hours worked and unemployment claims. Macroeconomic Advisers, the St. Louis–based consulting firm, says the economy is expanding at a 2.5 percent annual rate in the current quarter. Economic activity "will increase slightly over the remainder of 2009," Federal Reserve chairman Ben Bernanke told Congress.

Irrational exuberance, it's not. But even stagnation would be an improvement over recent history. The U.S. economy shrank at nearly a 6 percent annualized rate between September 2008 and March 2009, a shocking slowdown that pitched the global economy into recession for the first time since World War II. "This looks an awful lot like the beginning of a second Great Depression," Nobel laureate Paul Krugman said in January. Catastrophe may have been averted. But when economists proclaim a recession over, they're celebrating a technicality: they mean economic output has stopped contracting...

Monday, July 27, 2009

Goldman Sachs: The Great Vampire Squid Watch — July 27, 2009

Items of Interest:

Inside Goldman Sachs, America’s most successful, cynical, envied, despised, and (in its view, anyway) misunderstood engine of capitalism...
“The god is Goldman. You subjugate yourself to that god, and in return we will make you a gazillionaire.”
Joe Hagan / NY Magazine:
Is Goldman Sachs Evil? Or Just Too Good? -- Inside Goldman Sachs, America’s most successful, cynical, envied, despised, and (in its view, anyway) misunderstood engine of capitalism...

Salvation came on November 25, a few days after Goldman’s stock price plunged to $52 a share, down from the year’s high of $200 and the lowest price the company had seen since it went public. Again, the white knight was the government. It turned out that Goldman’s conversion to a garden-variety bank-holding company offered an amazing advantage: Goldman now had access to incredibly cheap money. Exploiting its new status, Goldman became the first financial institution to sell $5 billion in government-backed bonds through the Federal Deposit Insurance Corporation, which allowed Goldman to start doing deals when the markets were at a near standstill. “Goldman was desperate for it,” says a prominent Goldman alumnus. “Everybody knows it. Those FDIC notes they got were lifesaving because they couldn’t issue any debt. If it had gone on another week or two, Goldman would have failed, they would have gone the way of Lehman, and you’d be talking about Lloyd the way you talk about [Lehman CEO] Dick Fuld...

... two former clients told me they had observed firsthand how Goldman traded against their interests to improve its own bottom line—one who didn’t like it, the other accepting it with a shrug and saying, admiringly, that Goldman’s ability to convince the world that it is a “client-oriented” business was its most masterful PR coup...

Goldman’s profiting from this ethical gray area was exemplified by the real-estate market and the subprime-mortgage collapse: Goldman Sachs sold subprime-mortgage investments to its clients for years, but then in 2006 began trading against subprime on its own balance sheet without informing its clients, a hedge that ultimately let it profit when the real-estate market cratered. For some, this was a prescient call; for others, a glaring conflict of interest and inherently dishonest, since the firm let its clients take the fall.

Goldman’s penchant for playing all sides has been business as usual for years, but no one really paid much attention—partly because the economy was booming and there seemed to be plenty of profit to go around. But what once seemed like ruthless laissez-faire capitalism now looks like a rigged market in which Goldman Sachs has far too much control. Earlier this month, Goldman had an ex-employee arrested for allegedly stealing computer codes that could be used, as the prosecutor noted, “to manipulate markets in unfair ways.” Some hedge-fund traders and financial bloggers have speculated that Goldman itself could have been using the codes for the same purpose...
Felix Salmon / Reuters: Was the AIG bailout a Goldman bailout by proxy?
Matt Taibbi / TrueSlant: New Info: Goldman Really Was In Trouble
Michael van der Galien / PoiGazette: The Evil Called Goldman Sachs
GoldmanSachs666: Goldman Sachs was on the brink of going under...

Business Insider - Cluster Stock:
Buy CDS From An Insurer That Wasn't AIG? You Got 13 Cents On The Dollar

CBS: The Shine Comes Off Of Goldman Sachs
Kansas City Star: Pro-Con | Does Goldman Sachs deserve the public's wrath?
Ryan Grim / Huffington Post:
Goldman Sachs: Gambling With Your Money? -- Goldman Sachs is using its new taxpayer-subsidized status to bring increased risk to the financial system, a group of House members charged Monday. They want to know why the Federal Reserve is allowing it.

The group on Monday sent a letter to the Fed asking for an explanation of why Goldman Sachs is being allowed to speculate wildly even while officially redesignating itself a bank holding company, which theoretically means stricter regulation. The bank designation gives Goldman access to dirt-cheap Federal Reserve loans...
Michael Maiello / Forbes:
It's Time To Break Up Goldman Sachs -- The country and investors would be better served by smaller financial companies.

If we agree on a few basic things that we all want, breaking up Goldman Sachs and most of the other big Wall Street banks makes a lot of sense. Let's start with the wants: The taxpayer should never again be asked to save the banks from the costs of their own investment decisions; American consumers and businesses should have access to financial products, credit and financing; bank shareholders deserve a chance to make some money...
How much front-running does Goldman do?

NY Times:
Stock Traders Find Speed Pays, in Milliseconds -- It is the hot new thing on Wall Street, a way for a handful of traders to master the stock market, peek at investors’ orders and, critics say, even subtly manipulate share prices.

It is called high-frequency trading [HFT] — and it is suddenly one of the most talked-about and mysterious forces in the markets...

High-frequency traders often confound other investors by issuing and then canceling orders almost simultaneously. Loopholes in market rules give high-speed investors an early glance at how others are trading. And their computers can essentially bully slower investors into giving up profits — and then disappear before anyone even knows they were there...
Zero Hedge:
Ron Insana On HFT --
"I'd prefer that regulators look into whether a firm like Goldman Sachs (GS) unfairly view [sic] order and information flow ahead of its customers and clients..."
The Motley Fool:
The Goldman Sach's HFT Story is refusing to die... -- So it seems Goldman Sachs may have brought more attention to High Frequency Trading (HFT) than they wanted in their legal action towards Mr. Alekynikov. Again though, it was pretty much a Catch 22 for them...

Tyler Durden / Zero Hedge:
JPM's Carl Carrie On Algorithmic Trading -- When the former head of product development in the electronic client solutions group at none other than JP Morgan, Carl Carrie, was last quoted on Zero Hedge, he had some very nasty words for High Frequency Trading. Today, in a podcast transcript by algotradingpodcast Carl shares much more light in just why any reform movement against HFT and PT in general will be met by a huge pushback by exchanges, brokers, infrastructure providers, telcos, and all derivative market players...

Goldman fires back on HFT -- Goldman Sachs is not known for being particularly forth coming with the press. The investment firm’s two favorite words for dealing with media inquiries are “no comment.”

But all of sudden Goldman is taking an aggressive stance when it comes to the subject of rapid-fire high frequency stock and commodities trading–an activity that is drawing increasing scrutiny from the press, regulators and even the folks on Capitol Hill...
High-Frequency Trading Faces Challenge From Schumer -- High-speed trading in the U.S. stock market may face its biggest threat after Senator Charles Schumer proposed prohibiting so-called flash orders...
Reuters: Schumer aka Flash Gordon
Zero Hedge: Schumer Letter To Mary Shapiro
Zero Hedge: Goldman's Ed Canaday On The Requirements For High Frequency Trading Oversight
James Howard Kunstler /
Evil Syndicated -- By now, everyone in that fraction of the world that pays attention to something other than American Idol and their platter of TGI Friday's loaded potato skins knows that Goldman Sachs has been caught at another racket in the stock market: front-running trades. What a clever gambit, done with the help of the markets themselves - the Nasdaq in particular - in which information on trades is held back a fraction of a second from public view, while the data is shoveled to the computers of privileged subscribers who can execute zillions of programmed micro-trades before the rest of the herd makes a move. This allows them to vacuum up hundreds of millions of dollars by doing absolutely nothing of value...
Tyler Durden / Zero Hedge:
The Goldman VaR Exemption Question Escalates -- It seems only yesterday that Zero Hedge had some questions in regard to Goldman's VaR Fed exemption. No response was received from 85 Broad. Today it appears several Congressmen, lead by Alan Grayson, are willing to drive a sharp stick pretty deep into the hornets' nest, by sending a letter directly to Wall Street Don Ben Bernanke, demanding an explanation exactly to the question of Goldman's VaR Exemption...
Here’s how Goldman Sachs makes all that cash -- While the U.S. banking industry struggles to right itself, Goldman Sachs has figured out how to turn financial turmoil into gold. Here’s how.

The answer is that Goldman Sachs isn’t really a bank. It’s a gigantic investment company that offers very limited conventional banking services — like lending money — on the side. Because it’s one of the few investment banks left standing, it has the highly profitable field of trading and underwriting pretty much to itself...

Wednesday, July 22, 2009

Goldman Sachs: The Great Vampire Squid Watch — July 22, 2009

Items of Interest:

Goldman Sachs Payments to U.S. Give 23% Return to Taxpayers -- Goldman Sachs Group Inc.’s repayments to the government of last year’s bailout money, including an agreement today to repay warrants, generated a 23 percent annualized return for U.S. taxpayers.

Goldman Sachs agreed to the Treasury’s request for $1.1 billion to repay warrants the government received when it invested $10 billion in the New York-based firm last October. The payment is in addition to $318 million in preferred dividends.

That 23 percent return compares with the 42 percent surge in Goldman Sachs’s share price since October, and the 5.1 percent gain in the Standard & Poor’s 500 Index. Goldman’s decision follows criticism of the bank by lawmakers who questioned its decision to set aside a record $11.4 billion to pay employees in the first half of the year...

NY Magazine:
Goldman Sachs Buys Back Warrants for $1.1 Billion -- On the face of it, it's a decent deal: If we are getting this right... So while Goldman is making nice to the taxpayer, they're not exactly being obsequious...

Lloyd C. Blankfein, chairman and CEO of Goldman Sachs
"This return is reflective of the government's assistance, which benefited the financial system, our firm, and our shareholders," said Lloyd C. Blankfein, chairman and CEO. "We are grateful for the government efforts and are pleased that this additional money can be used by the government to revitalize the economy, a priority in which we all have a common stake."
US Government Gets 23% ROI on Goldman Sachs' TARP Warrants -- IMHO, $1.1 billion is a drop in the bucket compared to that $23.7 trillion number SIGTARP top cop Barofsky says we're on the hook for in terms of bailout schemes...

Blankfein is lying through his teeth. He never wanted in on this advanced money laundering scheme.

Ryan Grim / Huffpo:
Ignoring Watchdog Report, Treasury Gives Three Major Banks Sweetheart Deals -- Four major banks have repurchased warrants from the Treasury Department since a congressional watchdog reported that the backroom deals where the prices were negotiated were ripping off the taxpayer...

Wilson speculated that Goldman Sachs decided to pay fair price to avoid more of the bad press that's been coming its way the last several months....

Goldman 'warrants' raves from Congress -- Legislators applaud news of the investment bank's 'full and fair' TARP warrant repayment, but pressure builds on Treasury to deliver more big payback checks...

The Atlantic: Goldman Sachs Makes Us All Rich

Oh wait, there's still still $22 billion in outstanding FDIC-guaranteed debt

Matthew Goldstein / Reuters:
Goldman, what about the FDIC-backed debt -- Goldman Sachs is trumpeting the fact it just paid the federal government $1.1 billion to buyback the warrants it gave the Treasury Dept. as part of last fall’s baillout package. But Goldman still is benefiting from the government’s largess by sitting on some $22 billion in FDIC-guaranteed debt it sold this past winter.

Goldman can’t say it’s truly free of government assistance until it retires this $22 billion in long-term debt that it sold to investors...

Until Goldman does that, it’s still fair to say Goldman is trading with the implicit backing of the federal government.
Tyler Durden / Seeking Alpha:
Flash Trading: Goldman Sachs Front Running Everyone Else -- There is a curious article in the latest edition of Traders Magazine. It is curious mostly because it was allowed to be published, as it definitively peels off the cover of what truly happens at the pantheon of stock exchanges, that dominated by a private club of select high frequency traders, who obtain better and faster pricing than everyone else, and where the group of "select few" is seemingly legally allowed and even encouraged to front-run the "every-one else" (you, dear reader, are most likely in the latter camp). If you ever wondered why HFT [high frequency trading] generates profits of over $20 billion a year, please read this article...
Tyler Durden / Zero Hedge:
Charlie Lets Zero Intelligence Have It -- Not even sure you [Charlie Gasparino of CNBC] deserve a response to this, as apparently you have completely missed our prodding which had nothing to do with you being on Goldman's pay and everything with you doing the responsible journalistic thing, i.e., asking the tough questions which you purport you did, instead of being fed the party line. We appreciate the other side of the story: we can get that from Goldman's press releases and 8K's - you are supposed to read between the lines and find out what it is in the story that your new friends at 85 Broad are not telling you. But if by now you have not realized what your job as a journalist entails, it would be a folly for Zero Hedge to try to educate you at this late stage in your career...
Mess That Greenspan Made:
Keiser: "Goldman Sachs are scum" -- In case you missed this one... Max Keiser goes off on Goldman Sachs in a way that makes a lot more sense today than it would have a year ago.
Goldman Sachs Internal Memo -- Internal Memorandum No. 8121b

ATTN: Employees of Goldman Sachs...

We had a few hard months there, didn’t we? They regulated our corporate jet so that we could no longer use it to fly from hole to hole on the green. Dave had to drain his money pool to half capacity. I stopped injecting gold into my blood. They don’t call it a recession for nothing. One day, we’ll look back on the year we received only five-figure bonuses and laugh...
WSJ Marketbeat:
Bailout Was ‘Terribly Unbanksmanly’
T T Ram Mohan / The Economic Times:
Gold-mine Sachs is an illusion -- That leaves us with two other factors that might explain Goldman’s abnormal returns: superior information and the ability to influence regulation. In his book, The Greed Merchants, Philip Augar, a former investment banker, argues that large investment banks benefit from superior information gained from the sheer scope of their operations. Knowledge about clients gained from underwriting or advisory business, for instance, can be deployed in trading and private equity...

We may not give credence to all the conspiracy theories about Goldman. But we do know that sustained abnormal returns are something of an illusion created by serious market imperfections. These imperfections must be fixed as they entail a huge cost, the cost of recurring financial crises.
The Washington Post:
Wall St. Jacks Up Pay After Bailouts -- Lawmakers Warn Against Return to Pre-Crisis Levels

Goldman Sachs caused a stir last week when it disclosed it had set aside a record $6.6 billion for compensation expenses in the most recent quarter, bringing the total for the first six months of the year to $11.4 billion. If that pace continues for the rest of the year, Goldman's employees will earn an average of about $773,000, more than double the figure last year and even exceeding the $700,000 paid in 2007, when compensation on Wall Street hit a record high...
Tom Gregory /
Vatican Bombshell!: Goldman Sachs IS The Holy Ghost! -- L’Osservatore Romano is reporting that The Vatican has declared Goldman Sachs to be The Holy Ghost. The revelation has inspired hordes of the religious faithful to descend upon the firm’s New York headquarters and drop to their knees – a position Goldman Sachs brought the rest of the world to in 2007...

Tuesday, July 21, 2009

Goldman Sachs: The Great Vampire Squid Watch — July 21, 2009

Items of Interest:

David Reilly / Bloomberg:
Goldman Sachs Lack of Love Puts Profit at Risk -- Weathering the aftermath of the financial crisis may prove tougher for Goldman Sachs Group Inc. than surviving the storm.

Long the Wall Street firm everyone loves to hate, Goldman saw the brickbats rain down last week after it posted blowout second-quarter results and set aside a record amount for compensation. Even the arch-conservative Wall Street Journal editorial page joined the attacks.

Usually, Goldman takes a sticks-and-stones approach to such vitriol, even if being labeled a “great vampire squid wrapped around the face of humanity” by Rolling Stone magazine is new. This time, though, names may hurt the bank and its share price...

Allan Sloan / Washington Post:
Foolish and Tacky, Goldman Sachs Spurns Its Saviors -- I've always thought that the guys running Goldman Sachs were really smart -- not only about making money, but also about projecting a classy image to the world outside Wall Street. Clearly, I overestimated them.

If there was ever a firm with the motivation -- and the money -- to be gracious to the U.S. taxpayers who kept it alive when the financial markets were imploding, it's Goldman. It had a chance to look good and do good for taxpayers and itself and Wall Street for a relative pittance -- and has blown it. Horribly...

What you probably don't know is that Goldman, flush with cash and profits, is squabbling with the Treasury about how much it should pay taxpayers to buy back the stock-purchase warrants it gave the government as part of the TARP deal last fall. Talk about tacky.

Had Goldman retained something it was once reputed to have -- a sense of short-term sacrifice in return for long-term profit -- it would have agreed to pay the government generously for the warrants. It could have announced that on Tuesday, along with its profits, and looked like a decent, concerned corporate citizen instead of Greedhead Central...
Linus Wilson / Seeking Alpha:
Do Goldman Sachs and Morgan Stanley Want Half Price on the TARP Warrants?
Mike Morgan /
Paulson's Goldman Sachs Bait and Switch Dance -- Here we have Congressman Stearns calling Paulson the crook he is. Unfortunately, Congressman Stearns is a lone voice. Where are you America? Wake up. Do you realize you are being raped, robbed and beat to a pulp by Goldman Sachs and their bankster accomplices? One more fact. Hank Paulson was more responsible for the current global financial crisis than any other ten men combined on the face of the planet. Why? ...

Paul Farrell / MarketWatch:
Goldman Owes Paulson a $1 Billion Bonus -- Cheers for King Henry -- world's greatest nudger

Welcome back King Henry! The same week Congress brutally grilled former Treasury Secretary Henry Paulson for strong-arming Bank of America into the Merrill Lynch deal last fall, J.P. Morgan Chase, Citi, Morgan Stanley, Bank of America, and Hank's old buddies at the Goldman Conspiracy were all wildly cheering him. His power play with TARP's billions last fall saved Wall Street and the world's banking system from a total collapse worse than the 1930s Great Depression.

Cheering? Yes, record second-quarter profits were cheers for King Henry. Wall Street banks know Hank is the world's greatest nudger...

President Bush deserves the credit for bringing Paulson on board three years earlier. But Paulson has kept such a low profile since leaving office six months ago, he could have been in a witness protection program...

John Tamny / RealClearMarkets:
Once Again, Paulson Misses the Point -- In testimony before Congress last week, former Treasury secretary Henry Paulson said he was "proud to have been among the many public servants" who came together "to prevent a far more damaging meltdown of our financial system." It would be hard to list a lack of certitude among his weaknesses.

A more humble Paulson might have thanked Congress for allowing the very architects of our financial meltdown the opportunity to administer the system's return to health. Paulson then should have apologized for having done such a poor job of fixing something that he should never have been allowed to fix to begin with.
Zero Hedge:
Is Goldman Starting To Offload Prop Positions? -- Abby Joseph Cohen must have threatened with retirement and David Kostin is here to pick up Olympic torch. Goldman Sachs just raised its 2009 year end S&P target to 1060, "13% above the current level" meaning Goldman prop positions are full and the great offloading to marginal buyers has begun.
Mike Morgan /
Is Goldman Sachs Front Running the Entire Market? -- Goldman Sachs just raised the S&P target for 2009 to 1,060. Why? It's not because things are "really" getting better. And it's not because they would be buyers in this market. No, it's because they need to pump this market, so they can dump their shares to you . . . at inflated prices that will be big losers for you...

Monday, July 20, 2009

Goldman Sachs: The Great Vampire Squid Watch — July 20, 2009

Items of Interest:

Charlie Gasparino / The Daily Beast:
Goldman's Outrage -- Wall Street giant used your money to make $3.4 billion in profits.

They will never admit to this at Goldman Sachs (they don’t really fess up to much over there at the Big G) but in the fall of 2008, just after the Lehman Brothers bankruptcy gave the world a lesson in systemic risk, Goldman, the world’s greatest risk taker, was finished too.

That’s right, it was toast. Finished. Kaput. Until, that is, the firm that was built on wheeling and dealing in some of the most esoteric investments the world of high finance had ever seen, needed a government bailout to stay afloat...

Now with all the government help, Goldman is marching its way back up to $235 a share—trading at around $150 Monday—by embracing much of the same risk that nearly led to its demise. It would be nice, though, if the next time Goldman losses money taxpayers didn’t foot the bill.

Peter Brimelow /
Is grousing about Goldman reaching critical mass? -- Commentary: Questions are reaching the point where something might happen.

I'm amazed: Grousing about Goldman Sachs, and fury at the financial sector, is actually reaching the point where something might happen -- maybe even answers to questions we've been asking for a while...

And I'm increasingly confident all this will end with the appointment of another Pujo Committee, paralleling the one which investigated the so-called "Money Trust" in the wake of the Panic of 1907.

The consequences will be monumental.
Goldman gets it from both right and left
The pyramid supports are giving out! Quick, everybody throw your bodies under Goldman Sachs to cushion its fall. Children first. They're the softest
— Jon Stewart

The Daily Show With Jon StewartMon - Thurs 11p / 10c
Pyramid Economy
Daily Show
Full Episodes
Political HumorJoke of the Day

Anger at Goldman Sachs? -- Is there any resentment simmering out in the public over Wall Street's return to big earnings and big bonuses? Bill O'Reilly, the Fox News commentator, likened Goldman Sachs bankers to pigs during a segment on his TV show. "You've got to make an example of the big boy," he said. "And this is the big boy." Jon Stewart said this: "Goldman Sachs makes $3.4 billion in profit from April to June. I guess the bailouts are working, for Goldman Sachs."

So there you have it: Criticism from the right and the left...
Bill O'Reilly / The O'Reilly Factor / FoxNews:
The Cap-and-Trade Corruption -- Goldman Sachs is a goliath investment company that pays very little tax. In fact, last year in the teeth of the recession, Goldman made more than $2 billion in profit and, according to the Associated Press, paid its CEO Lloyd Blankfein about $43 million. Let me repeat: Old Lloyd made $43 million bucks in 2008. But Goldman Sachs paid zero in federal income tax. Let me repeat: Goldman made $2 billion and paid nothing in federal tax...

Also, Goldman employees gave President Obama's campaign close to $1 million. Did I mention that? ...
Ben Cohen / The Daily Banter:
Can We Get Rid of the Goldman Sachs Influence in Government? -- The financial crisis and the Government's response has basically highlighted the fact that the U.S doesn't work as a functioning democratic country.

A functioning democracy would have held those responsible for gambling the nation's resources away, and instituted reform that made it impossible for those criminals to hijack the system again.

Instead, the Bush-Obama Administration doled out tax payers money to the devastated banks to the tune of $12 trillion, refused to hold them accountable, then made sure those responsible stayed in power and engineered a restructuring that explicitly kept them in control...
Goldman Sachs: A Vampire On The Jugular of AmericaDarryl Robert Schoon /
Goldman Sachs: A Vampire On The Jugular of America

Goldman Sachs is today the pre-eminent paper player in today’s paper markets, the king pimp of capitalism, Wall Street’s equivalent of Harlem’s fabled players of the past who lived opulently off the considerable labors of female prostitutes.

But the pimps on Wall Street have done Harlem’s pimps one better. Goldman Sachs and their fellow pimps benefit not just from the labor of women but from the labor of men as well...

When Wall Street pimps take their cut of America’s money, they’re not alone. Without the US government, the pimps of Wall Street couldn’t do you like they do. There are two hands in your pockets—and they’re not yours.
Andrew Bary / Barron's:
Goldman Sachs Unbound -- This bank is rolling in dough again. Will some flow shareholders' way?

THE MONEY MACHINE THAT IS GOLDMAN SACHS is humming again just a few quarters after the firm's existence was briefly in doubt following Lehman Brothers' collapse...

Goldman is on course to pay each of its 29,400 employees a stunning average of $770,000 in 2009 based on money set aside so far this year. The $770,000 figure does include items like payroll taxes and health benefits, but the vast bulk is in cash and equity compensation. During 2007, its most profitable year, Goldman's compensation was about $720,000 per employee before falling about 50% last year.

No major companies appear even close to Goldman in average compensation. A highly profitable JPMorgan Chase (JPM), which competes against Goldman in areas like trading and investment banking while running a huge commercial banking operation, is on course to pay its 220,000 employees an average of $130,000 this year...
Video /
‘Goldman Sachs Are Scum’: Analyst Says Firm Should Face ‘Financial Terrorism’ Charges -- Max Keiser: "They have basically co-opted the government; they’ve co-opted the Treasury Department; the Federal Reserve functionality; they’ve co-opted the Obama administration. Barack Obama dances to Goldman Sachs tune.” ...
Borowitz Report:
Goldman Sachs in Talks to Acquire Treasury Department -- Sister Entities to Share Employees, Money

In what some on Wall Street are calling the biggest blockbuster deal in the history of the financial sector, Goldman Sachs confirmed today that it was in talks to acquire the U.S. Department of the Treasury.

According to Goldman spokesperson Jonathan Hestron, the merger between Goldman and the Treasury Department is "a good fit" because "they're in the business of printing money and so are we." ...


Friday, July 17, 2009

Goldman Sachs: The Great Vampire Squid

Goldman Sachs: a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money

The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.
— Matt Taibbi, Rolling Stone
Paul Krugman / New York Times:
The Joy of Sachs — The American economy remains in dire straits, with one worker in six unemployed or underemployed. Yet Goldman Sachs just reported record quarterly profits — and it's preparing to hand out huge bonuses, comparable to what it was paying before the crisis. What does this contrast tell us?

First, it tells us that Goldman is very good at what it does. Unfortunately, what it does is bad for America...
The Daily Bail:
Ritholtz & Ratigan Examine The Vampire Squid -- The vampire squid is Government Goldman. You are a fish. "Annie, go get your nuke."

Dylan Ratigan teams up with Barry Ritholtz...


Matt Taibbi /
The real price of Goldman’s giganto-profits -- So what’s wrong with Goldman posting $3.44 billion in second-quarter profits, what’s wrong with the company so far earmarking $11.4 billion in compensation for its employees? What’s wrong is that this is not free-market earnings but an almost pure state subsidy...

So what does this Goldman profit number mean? This is the final evidence that the bailouts were a political decision to use the power of the state to redirect society’s resources upward, on a grand scale. It was a selective rescue of a small group of chortling jerks who must be laughing all the way to the Hamptons every weekend about how they fleeced all of us at the very moment the game should have been up for all of them....
Mike Morgan /

Thursday, July 16, 2009

Dr. Doom sees Sunshine: "The worst is behind us"

Items of Interest:

24/7 Wall Street:
Roubini, Dr. Doom, Starts To Surrender -- Nouriel Roubini, the notorious bear who called for all this mess we have seen, is finally throwing in the towel on being so bearish and looking more like a soft-bull. Maybe only a bit, but that may be enough. There was originally some issue over the timing of when, but late 2009 or early 2010 is when Roubini expects the recession to end.

While Roubini said deflation is a near-term risk, Roubini noted that inflation is going to be an issue if the US does not adjust its policies in the near-term. Just like Buffett, Roubini is said to also favor another stimulus package...

U.S. Stocks Rise as Roubini Predicts Recession to End This Year -- U.S. stocks rose for a fourth day as economist Nouriel Roubini said the worst of the financial crisis is over and the recession will end this year, while takeover speculation lifted commodity shares...

Wednesday, July 15, 2009

U.S Healthcare System is Mind-Numbing Web of Institutions, Agenices, and Businesses

The New Republic:
Rube Goldberg Already Lives Here -- House Republicans today released a chart depicting what health care in America would look like if the House Democrats get their way. It's confusing, if colorful--full of boxes, lines, and all sorts of hard-to-say acronyms. Which, of course, is the point.

Organizational Chart of the Democrats Health Plan
If all of this sounds familiar, that's because it is. The Republicans did the exact same thing in 1994, when President Bill Clinton unveiled his reform plan. That chart was, to be clear, relatively accurate. The Clinton plan really was very complicated. Just like the new plans moving through Congress...

map of doomed Clinton healthcare plan

David Weigel / The Washington Independent: The Return of the Chart — Jonathan Cohn says what needs …
Jason Rosenbaum / NOW! Blog: What's the Republican plan again?
Digby / Hullabaloo: Charts 'N Graphs
Jason Rosenbaum / Firedoglake: What's the Republican Health Plan Again?

Steve Benen / Washington Monthly:
THEY DO LOVE THEIR CHARTS.... Republican opponents of health care reform …

This Recession is Over? Jobless Recovery to Begin?

Items of Interest:

Derek Thompson / The Atlantic Business Channel:
This Recession is Over — Daniel Gross, writing for Newsweek, finds that two of his favorite economic forecasters have predicted an end to the recession, starting ... now. We're growing, everybody! We're a real economy! Let's look at the evidence: — The Macroeconomic Advisers …

Jobless claimsThe recession is over! Let the jobless recovery begin!

Daniel Gross / Newsweek:

Monday, July 13, 2009

Puffery of the Bailed Out

Huffington Post:
Ironic Ads From Before The Bailout: AIG, Countrywide, RBS, Bank Of America -- ... Take this AIG spot, for example. Keep in mind, that AIG made risky derivatives bets that nearly brought down the world economy. But, rest assured, AIG is proud that it knows the importance of taking chances in life!

"If nobody takes chances, if nobody pushes the boundaries, if nobody takes a stand, nothing great happens..."

Friday, July 10, 2009

Great Recession Roundup — July 10, 2009

Items of Interest:

Robert Reich / Robert Reich's Blog:
When Will The Recovery Begin? Never. -- The so-called "green shoots" of recovery are turning brown in the scorching summer sun. In fact, the whole debate about when and how a recovery will begin is wrongly framed....

All we know is the current economy can't "recover" because it can't go back to where it was before the crash. So instead of asking when the recovery will start, we should be asking when and how the new economy will begin...

Felix Salmon: The X-shaped recovery — Robert Reich blogs the recovery …
Paul Krugman / New York Times:
The Stimulus Trap — As soon as the Obama administration-in-waiting announced its stimulus plan — this was before Inauguration Day — some of us worried that the plan would prove inadequate. And we also worried that it might be hard, as a political matter, to come back for another round...
No Sheeples Here!: America Ensnared By The “Stimulus Trap”
Phil Izzo / Wall Street Journal:
Economists Oppose More Stimulus -- Most economists believe the U.S. doesn't need another round of stimulus now despite expectations of continued severe job losses.

Just eight of 51 economists in The Wall Street Journal's latest forecasting survey said more stimulus is necessary...

"The mother of all jobless recoveries is coming down the pike," said Allen Sinai of Decision Economics...
Philip Klein / American Spectator: The Night and Day Economy
Derek Thompson / The Atlantic:
It's Not Just a Recession. It's a Mancession! -- What is a mancession, you ask? It's not this. It's a recession that hurts men much more than women, and we are allegedly in the worst mancession in recent history. Eighty percent of job losses in the last two years were among men, said AEI scholar Christina Hoff Summers, and it could get worse...

Male versus Female Unemployment from January 2006 to May 2009----
Chris Hawley / USA Today:
With USA in a recession, rural Mexico feels the pain -- Across Mexico, desperation is increasing among the millions of families who depend on money sent home by relatives in the United States. Those money transfers suffered an unprecedented drop in May, falling 20% — to $1.9 billion — compared to the previous year, according to the Bank of Mexico. That's because the recession has left many migrants unable to find jobs in the USA, especially in construction...

The Border Patrol says the number of illegal migrants apprehended last year fell to the lowest level since 1973 as the down economy and tighter border controls discouraged many from entering the USA...
Dante Chinni / The Christian Science Monitor:
How the recession may remake American communities -- In every community we’ve visited since January, one common thought has surfaced: The United States is changing dramatically and will look very different in 10 years.

There is not much agreement on what the future will look like. After all, the effects of the socioeconomic restructuring will be very different in different places. But a few early trends are emerging...

Thursday, July 9, 2009

Great Recession Roundup — July 9, 2009

Items of Interest:

Ben Rooney /
Fewer than expected file for unemployment — Labor Department says first time jobless claims fell by 52,000 last week to 565,000. But continuing claims rose to another record high.

The number of Americans filing initial unemployment claims fell sharply last week … It was the lowest number since January and was below the consensus estimate of 603,000 from economists surveyed...

Gaius / Blue Crab Boulevard: No Shame — CNN is trying mightily - and shamelessly …
Mish's Global Economic Analysis:
Continuing Claims Soar by 159,000 to New Record; Initial Jobless Claims Skewed By Autos -- The peak in initial claims might be in but the peak in unemployment has not. Moreover, reported continuing claims hit 6.883 million, setting a new all time record. By the way, the real number of continuing claims is closer to 9.4 million as detailed below...
Nouriel Roubini / Forbes:
Brown Manure, Not Green Shoots -- The jobs situation is even worse than the headlines.

The June employment report suggests that the alleged green shoots are mostly yellow weeds that may eventually turn into brown manure. The employment report shows that conditions in the labor market continue to be extremely weak, with job losses in June of over 460,000. With the current rate of job losses, it is very clear that the unemployment rate could reach 10% by later this summer--around August or September--and will be closer to 10.5%, if not 11%, by year-end. I expect the unemployment rate is going to peak at around 11% at some point in 2010, well above historical standards for even severe recessions...
Buffett Likens Economic Stimulus to Viagra — The Legendary Investor Is Critical of the First Stimulus Package, Comparing It to Viagra and Candy — As debate grows about a possible second stimulus package for the flagging American economy, at least one legendary investor is giving the idea his guarded approval...
Gaius / Blue Crab Boulevard: Can You Get It Over The Counter?
Commercial Real Estate Is a ‘Time Bomb,’ Maloney Says -- The $3.5 trillion commercial real estate market is a ticking “time bomb” that may lead to a second wave of losses at large U.S. banks, congressional Joint Economic Committee Chairwoman Carolyn Maloney said.

About $700 billion in commercial mortgages will need to be refinanced before the end of 2010 and “doing nothing is not an option,” Maloney, a New York Democrat, said at a committee hearing today. This “looming crisis” may lead to significant losses for banks, force shopping center and hotel owners into bankruptcy, and impede economic recovery, she said...
Washington Business Journal:
Economist: FDIC gearing up for bank closures -- The Federal Deposit Insurance Corp. is gearing up to handle a large number of bank failures expected as a result of bad mortgages, both in residential and commercial real estate, an economist said Tuesday...
Wall Street Journal:
Subprime Resurfaces as Housing-Market Woe -- In Atlanta, a Foreclosure Dichotomy Threatens Homes Values

The U.S. housing market is facing new downward pressure as holders of subprime-mortgage bonds flood the market with foreclosed homes at prices that are much lower than where many banks are willing to sell.

While nationwide figures are scarce, a review of thousands of foreclosures in the Atlanta area shows that trusts managing pools of securitized mortgages sold six times as many properties as banks during the six months ended March 31. And homes dumped by subprime bondholders sold for thousands of dollars less on average than bank-owned properties, the data show.

Experts say this is a bad omen...
NY Times:
Late Surge Puts Claims Past 15,400 In Madoff Ponzi Case -- The final tally of claims from victims of Bernard L. Madoff’s vast Ponzi scheme comes to more than 15,400, substantially higher than the 8,800 claims that had been filed by the first of June.

The total was included in an interim report filed on Thursday in Federal Bankruptcy Court in Manhattan by Irving H. Picard, the trustee overseeing the liquidation of Mr. Madoff’s estate.

The report, which covers the first six months of the trustee’s tenure, also provided some limited details about his independent examination of the Madoff fraud, which continues to be investigated by federal prosecutors and securities regulators...
Guest Contribution: The Fall of the Toxic-Assets Plan -- Lucian Bebchuk says that the toxic-asset program, which has been curtailed significantly, hasn't made the problem go away.

The plan for buying troubled assets — which was earlier announced as the central element of the administration’s financial stability plan — has been recently curtailed drastically. The Treasury and the FDIC have attributed this development to banks’ new ability to raise capital through stock sales without having to sell toxic assets. But the program’s inability to take off is in large part due to decisions by banking regulators and accounting officials to allow banks to pretend that toxic assets haven’t declined in value as long as they avoid selling them...
GM Will Exit Bankruptcy Court With $48 Billion in Liabilities -- General Motors Corp., which is preparing to sell its best assets to a streamlined new entity, will carry with it liabilities of $48.4 billion, a bankruptcy judge said.

The new GM agreed to take on those obligations to benefit creditors, U.S. Bankruptcy Judge Robert Gerber in New York said in a ruling on July 7 that denied a quick appeal to opponents of the sale. They will be offset by GM’s most competitive assets, such as Cadillac, Chevrolet, Buick and GMC.

Among the liabilities are more than $17 billion of debt to the U.S. and Canadian governments, a workers health trust and unspecified foreign lenders...
Paul Ingrassia / Wall Street Journal: General Motors Gets a Second Chance
LA Times:
In fundamental shift, consumers are saving rather than spending -- The belt-tightening is almost certain to have a negative effect on the U.S. economy, in which about 70% of gross domestic product comes from personal consumption.

The continuing decline in consumers' use of charge cards and other forms of credit reflects an underlying weakness in the U.S. economy that most of the government's recovery plans fail to attack head-on. And it suggests a fundamental shift in the way Americans save and spend that is likely to act as a drag on the economy for at least several years...
ABC News:
Recession Marriage Trend: Living Apart -- For More Married Couples, Staying Employed Means Living in Different Time Zones

After getting laid off from her job as an advertising executive last Thanksgiving, Leslie Singer co-founded the branding consultancy HS Dominion. The hitch: she had to hang her shingle in New York City, two-and-a-half hours from the Madison, Conn., home she shares with her partner of 17 years and their two teenage children...

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