Goldman Sachs under investigation!!

http://www.nytimes.com/2009/07/24/business/24trading.html?ref=business

Powerful computers, some housed right next to the machines that drive marketplaces like the New York Stock Exchange, enable high-frequency traders to transmit millions of orders at lightning speed and, their detractors contend, reap billions at everyone else’s expense.

AND....

This is where all the money is getting made,” said William H. Donaldson, former chairman and chief executive of the New York Stock Exchange and today an adviser to a big hedge fund. “If an individual investor doesn’t have the means to keep up, they’re at a huge disadvantage.”

AND IT IS NOT A LEVEL PLAYING FIELD..

The slower traders began issuing buy orders. But rather than being shown to all potential sellers at the same time, some of those orders were most likely routed to a collection of high-frequency traders for just 30 milliseconds — 0.03 seconds — in what are known as flash orders. While markets are supposed to ensure transparency by showing orders to everyone simultaneously, a loophole in regulations allows marketplaces like Nasdaq to show traders some orders ahead of everyone else in exchange for a fee.

http://www.youtube.com/watch?v=thq9Bqw_iuY

ah, corruption, as if this were anything like more than the tip of the iceberg in this entire, smelly fleecing the public enterprise of the wealthy; over the last year, i have developed a prejudice against people solely based on their profession - i immediately assume the worst of anyone who can work in the banking industry

44 arrested in FBI sting for amazing, and just absurd, corruption, in NJ
and that's what the FBI managed to get
i don't think there is a corruption virus limited to NJ, whatever people go on about the sopranos etc
C street love house, ah, i mean prayer house, house of the million dollar hush money offering - do people think money is the only payment?
lobbyists own so much of washington, it goes on and on

the quote in the NYTImes says it best (http://www.nytimes.com/2009/07/25/nyregion/25jersey.html?hp):
“For these defendants, corruption was a way of life,” said Ralph J. Marra Jr., the acting United States attorney in New Jersey. “They existed in an ethics-free zone.” Mr. Marra said that average citizens “don’t have a chance” against the culture of influence peddling that the investigation had unearthed.

if you are hardworking, honest, and fair, you're a putz

akallabeth, given the fact that the FBI and other agencies finally seem to be getting off their collective posteriors and looking into some of these things, being hardworking and honest may keep you out of prison as well.

"akallabeth, given the fact that the FBI and other agencies finally seem to be getting off their collective posteriors and looking into some of these things, being hardworking and honest may keep you out of prison as well."

yeah, all this stuff over the last year is getting to me. getting to cynical

There are more people gaming the NYSE than actual investors!!
It's like going being on the subway platform and finding out 9 out of 10 people there are pick pockets.

http://online.wsj.com/article/SB124743426310129241.html

High-frequency trading has become one of the fastest-expanding strategies on Wall Street, accounting for more than 73% of stock-trading volume in the U.S. this year, up from 59% in 2008, according to Tabb Group, a New York research firm.

"if you are hardworking, honest, and fair, you're a putz"

yup. I wish I'd been smart enough to be a sleazy mortgage broker. I'd have made scads of money and then I could now be working to "modify" the craptacular loans I originated - for a fee, of course. Instead I'd better start signing "putz" after my name.

yup. I wish I'd been smart enough to be a sleazy mortgage broker.

I guess the trick is to outlast em all....

From Chinatown:
Noah Cross: 'Course I'm respectable. I'm old. Politicians, ugly buildings, and whores all get respectable if they last long enough.

but then you would have been a sleazy mortgage broker. nothing ends cocktail party conversation faster than admitting you used to be a sleazy mortgage broker. although i guess nothing would stop you from lying at this point.

what's all this remorse at having not been part of the machine? buck up people. most of the sleazy mortgage brokers blew all their money on god knows what, many of the real estate agents "invested" in units at the Link and Platinum, and even many of the titans of the financial industry are having trubs unloading their Hamptons digs. Madoff and Dreier are behind bars, and if there's any justice Moz will follow. it isn't enough, but still i'll take being a putz over contributing to one of the biggest bubbles of all time any day.

Agree with A.R. Given time most schemes blow up. The romantic notion of the bank robber quitting at the right time and retiring to Fiji is just not reality.

Is it surprising that the individual investor is at a disadvantage? This is nothing new. Just 10 years ago the bid on a stock like Broadcom would be 26 1/4 and the ask would be 26 1/2 capturing 1/4 on each transaction. Now we are talking about .025 and not .25.

s it surprising that the individual investor is at a disadvantage?

Bob420. What we're talking about is not bid/ask spread but Goldman's computers detecting buy orders before execution and getting in front driving up the price, or the opposite if people are selling.

"but then you would have been a sleazy mortgage broker. nothing ends cocktail party conversation faster than admitting you used to be a sleazy mortgage broker. although i guess nothing would stop you from lying at this point."

But I would be a *rich* sleazy mortgage broker. Maybe my problem is not aiming high enough: I should have been a sleazy banker. I budget well. ;)

No, honestly, I agree with you, AR. But sometimes taking the moral high road is pretty cold comfort. I'm just really tired of taking it in the shorts.

I understand. The individual investor is always at a disadvantage. When the ECN's came on board, you could hide orders so noone could see them. However, you could pay to see these hidden orders. It was easy to manipulate, see what was going on and take advantage of huge spreads. Orders were placed and removed quickly to make it appear that there were buyers or sellers etc. Once they went to decimals, it was much harder to capture this spread and volume was the way to make money and order flow was paid for. Super computers are just doing it faster. They are scanning and looking for orders, entering and canceling orders, manipulating prices by getting in front and then selling back to them.

Volume and decimals have really helped the individual investor. All I am saying is that it isn't surprising that Goldman found a way to make money of volume. Is it sleazy? Sure but I don't really see it as any worse to the individual investor than illiquid markets, manipulation and large spreads.

if you budget well you'd make a lousy banker. and who am i to talk? i sit around reading Klein and Pallast and the like, both of whom could give one ulcers. but then i read the working poor, or class matters, and i realize i'm in the high-middle/low-high end of the chain. and i get even angrier on their behalf. don't get me wrong, i'm livid. but i wouldn't want to join them.

http://www.zerohedge.com/sites/default/files/images/7.13.09.jpg

http://nihoncassandra.blogspot.com/2009/07/is-something-wrong-with-certain-kinds.html

What is their common thread? For one, they are reasonable analogies for a flavour of low-latency, high-frequency, order-sniffing, front-running strategies that parasitically intermediate real buyers and sellers, but only after excising a requisite toll that CUNY's Donefer (thanks to TD at Zerohedge for posting the presentation bullet points) estimates to be in the range of USD$15 to 25 billion. Of course not all short-term traders are predatory. and not all predatory traders are short term. However, given the estimated sized of frigatted profits, responsible civic-minded investors should at the very least ask some questions about its legality. desirability, as well as the enforceability of restrictions (not necessarily in that order) and the philosophically slippery slope and unforeseen externalities any restrictions might ultimately yield.

But really, how should we feel about it?? That USD$15 to 25 billion is coming from somewhere - probably your mutual fund, your defined-benefit pension fund, and possibly your own pocket via your P.A. While it's true that no one dies as a result of the clever gamester-ing, almost everyone is hurt, albeit small. Is this sufficient violation of the public interest to warrant action? Let's examine the boundaries: At one end, "front-running" of the contrapreneurial sort (i.e. on 100% information) is decidedly illegal in most civilized markets. At the other end, speculative buying on reasoned information or no information (like that peddled by CNBC) is wholly acceptable and encouraged. But predatory, parasitic order-sniffing strategies lay somewhere in-between though closer to Darth Vader than Alec Guinness, for one might aptly describe it as front-running on 75% probable information where said information is cleverly inferred from quasi-public, though admittedly obscure and difficult to tease-out information. This is not an easy case to find fault or guilt, even for the likes of Solomon. Call it legal-to-the-letter, but with substantive externalities negative to the public's interest.

Perhaps Goldman is not so smart. They should have left the programmer alone. By going after him, and making it public, they exposed their fear, weakness, and perhaps illegal activity. I actually interned at Goldman on the Nasdaq trading desk many years ago, and I can tell you that there were NOT an abundance of "smart" people on the desk. However, what I did discover is that their IT department consisted of more employees than any other department. If you could hit a home run in softball, you were "smart" enough to be a trader there. No worries, the systems will do all the heavy lifting, but we'll let you believe that you have talent. What a joke.

Mediocre people go to Goldman and become super-stars.
Super-stars leave Goldman and become mediocre.....

Mediocre people got to Goldman and BELIEVE they are super-stars.
People who BELIEVE they are super-stars leave Goldman and realize they were always mediocre...

...BUT, whatever they are, they're "stealing" money from the rest of us and laughing all the way to the bank. The best example might be the government "bailout" of A.I.G. Why don't they call it what it really was...A former Chairman and equity holder using his political power to funnel taxpayer dollars to Goldman via a conduit - A.I.G.

Unreal.

When Goldman bought credit default swaps from AIG they either didn't know or didn't care that the dealer at the craps table didn't have the money to pay out. The beauty of the CDS was they didn't have to mark to market any of their positions. Then when the casino(AIG) failed they hit speed dial to (pick your Goldman alumni in gov't) and got 100% pay out.

...and not a damn thing anyone wants to do about it. Bunch of wimps!

And the story has legs!

http://www.nytimes.com/2009/07/25/business/25trading.html?ref=business

A high-ranking lawmaker has asked the Securities and Exchange Commission to prohibit a trading technique that enables some large banks and hedge funds to peek at investors’ stock orders before they are sent to the broader marketplace.
Skip to next paragraph
Related
Stock Traders Find Speed Pays, in Milliseconds (July 24, 2009)

The technique, known generally as “flash orders,” gives high-frequency traders using lightening-fast computers an unfair advantage, Senator Charles Schumer, the New York Democrat who is chairman of the Senate Rules and Administration Committee, said a letter to the S.E.C. Senator Schumer wrote that he intends to introduce legislation barring the technique, if the agency fails to act.

and from the guys that started it all(i think)

http://zerohedge.blogspot.com/2009/07/critical-response-against-high.html

The funny thing is if goldman and a lot of other firms had to make money honestly
and not game the system, they would make single digit ROE

Wall Street is a rigged casino designed to transfer money from the suckers to the crooks. Put your money under the mattress -- it's almost as good as real estate.

Wall Street has a words for it, arbitrage. Unfortunately in school they taught arbitrage meant ibm was trading for more in ny than london. in reality it means front running the nyse computers or splitting a junk bond in two so the holder can hold less regulatory capital.

For those who haven't listened to NPR Planet Money. They have a good Goldman interview out

http://www.npr.org/blogs/money/2009/07/hear_the_goldman_sachs_intervi.html

You bet the story has legs... look at Mr. New York himself, ready to put the kibbosh on the practice of "flash-orders," one of GS's secrets to sticking it to the little man:

Senator Wants Restrictions on High-Speed Trading

By CHARLES DUHIGG

A high-ranking lawmaker has asked the Securities and Exchange Commission to prohibit a trading technique that enables some large banks and hedge funds to peek at investors’ stock orders before they are sent to the broader marketplace.....

http://www.nytimes.com/2009/07/25/business/25trading.html?

I'll be circulating this to as many people as possible. Nothing like momentum.

JohnGalt1945 - you echo my sentiments 100%, sir. My concern is HOW can we do anything about it; especially when the very body that is supposed to protect against this? If we are going with the fact such bodies SHOULD (or even "can") protect us and not, as your moniker would probably do, let them eventually fail, how do we motivate the government to take action when it's own perversions (people like Paulson/Geithner/etc., moronic policies, terrible regs, many loopholes, general incompetence, etc.) are part of the problem?

It seems as though they would have to first admit that criminals were placed in positions of power and, well, the f-ed up. We know the chances of that happening are about the same seeing a polar bear dance with a clown in Times Square.

I, along with many others I know, am angry about our fleecing, too. So, what do we do about it?

The second line should finish "...supposed to protect against this are at the core of the problem?"

Got ahead of myself and forgot to finish my thought.

A good start would be to write a snail-mail letter to local representatives and senators. However it seems that a good way to get people to pay attention is to produce an entertaining YouTube video. Easier said than done, but we are in Manhattan after all. I'm sure there are plenty of artists who would be eager to help with such an endeavor.

I do not like Alan Grayson, but give him credit for using blogs for his research..
http://www.zerohedge.com/sites/default/files/7%2027%20Goldman%20Sachs%20Letter%20to%20Bernanke.pdf

) If Goldman Sachs were required to adhere to standard Market Risk Rules imposed by the Federal Reserve on ordinary bank holding companies, how would its capital requirements differ from the current regulatory regime?

Great article from New York Mag

http://nymag.com/news/business/58094/

At the meeting, it was hard to discern where concerns over AIG’s collapse ended and concern for Goldman Sachs began: Among the 40 or so people in attendance, Goldman Sachs was on every side of the large conference table, with “triple” the number of representatives as other banks, says another person who was there. The entourage was led by the bank’s top brass: CEO Blankfein, co-chief operating officer Jon Winkelried, investment-banking head David Solomon, and its top merchant-banking executive Richard Friedman—all of whom had worked closely with Hank Paulson two years prior. By contrast, JPMorgan CEO Jamie Dimon did not attend. (Goldman Sachs has said that Blankfein left after twenty minutes, realizing he was the only chief executive present. But the person who was there says Blankfein was directly engaged in at least one full AIG meeting that Monday, appearing “ashen-faced” and “jumpy.”)

http://www.ft.com/cms/s/2/0119c586-7b7a-11de-9772-00144feabdc0.html

Moves by the Securities and Exchange Commission to review flash orders are welcome, as would be a proper look at HFT. There is a potential investor protection issue. More important, regulators should lead in understanding market changes and how traders make their dough. That does not imply a secret plot. It is just part of their day job.

Unbelievable.. people, don't lose your ability to get irate over fraud.. you would allow the system to sink lower

Bad day for Goldman
http://dealbook.blogs.nytimes.com/2009/07/29/how-firms-wooed-a-us-agency-with-billions-to-invest/?scp=1&sq=pension%20benefit%20guarantee%20corp&st=Search

A top executive at Goldman Sachs frequently called and sent e-mail messages, inviting Mr. Millard out to the Mandarin Oriental and the Ritz-Carlton in Washington, even helping him hunt for his next Wall Street job.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a.jcJxz36COY

July 29 (Bloomberg) -- A Goldman Sachs Group Inc. vice president and compliance lawyer was charged in New York state court after being arrested for allegedly soliciting what he thought was a 15-year-old girl, prosecutors said.

Todd Genger, 33, is accused of attempting to disseminate indecent material to a minor, Westchester County District Attorney Janet DiFiore in White Plains said today in a statement after Genger appeared in court. Prosecutors identified him as a Goldman Sachs attorney. Andrea Raphael, a spokeswoman for the bank, declined to comment on the arrest, saying only that Genger worked in the compliance unit, and has no legal duties.

“The defendant discussed specific sexual acts in which he would engage the underage ‘girl,’” DiFiore said. “The defendant admitted to having the online conversations.”

back to altruism..

http://www.bloomberg.com/apps/news?pid=20601087&sid=ayfmnm7EfPn4
July 29 (Bloomberg) -- Goldman Sachs Group Inc., the bank that makes the most money from commodities, fixed-income and currency trading, said attempts to curb speculation may be “disruptive” to energy markets.

Wow, a VERY bad day.

means nothing. GS investigated by a bunch of guys lobbied into positions by... guess who?? GS

means nothing.

Not sure hol4
Something is starting to resonate. Matt Taibbi started something. But it's not really about Goldman than about a system. Goldman is a great focal point in this.

http://www.bloomberg.com/apps/news?pid=20601087&sid=abVd1xu2lcbk

A Senate panel seeking evidence of fraud tied to last year’s mortgage crisis has issued subpoenas to financial companies including Goldman Sachs Group Inc. and JPMorgan Chase & Co., said U.S. Senator Tom Coburn, a Republican from Oklahoma.

http://www.zerohedge.com/article/former-goldman-managing-director-how-you-finance-goldman-sachs%E2%80%99-profits

(OK I DO NOT LIKE GRAYSON..LET'S MOVE ON)

uly 28, 2009 -- 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.

CODA...

s 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.

The success of Goldman stems from its ability to recruit, develop and retain the best talent in the market, and weed out the bad eggs and impostors.(especially in core business areas) The large compensation allows the company to attract and hire the best ones. No surprise they want to keep bonuses high. It's part of the business model.

Oh come on. The success of Goldman stems from it's ability to infiltrate the Government to rob taxpayers to bail themselves and their counterparties out. They would be defunct in a capitalist system.

July 31, 2009
A Level Playing Field For Investors
By Sen. Edward Kaufman

Efficient and free capital markets are essential to all that makes America great: investment in private enterprise, the availability of capital to expand and grow our economy through innovation, and the ability to save for retirement in hope our investments will support us in later years.

Regrettably, we now have an unfair playing field for investors. This leaves us with, in effect, two financial markets: one for powerful insiders, who use high-speed computers and privileged access to information to exploit loopholes for profit, and another for the average investor, who must play by the rules and whose orders are filled almost as an afterthought. This situation simply cannot continue. It is the financial equivalent of "separate and unequal."

Every day we learn more about the features of this two-tier system. Dark pools, collocation of high-speed computers at the exchanges, flash orders. Abusive short selling, the loophole of choice in 2008, was only the first sign of how the powerful on Wall Street make profits unhindered by the rules the rest of us must follow.

Here are just four areas where the SEC needs to act urgently to protect investors and restore market integrity.

First, the SEC should restore the substance of the uptick rule. This rule, a mainstay of investor protection for 70 years until it was repealed in June 2007, required investors simply to pause and to wait for an uptick in price before continuing to short sell. Without such a rule in place, investors who own stocks are more vulnerable to organized "bear raids" - abusive short selling combined with coordinated "misinformation" campaigns - which many believe contributed to the demise of Lehman Brothers and Bear Stearns, key elements in the collapse of our financial markets last year.

Second, the SEC should implement tougher rules that will stop naked short selling through an enforceable system. Naked short selling is the practice of selling stocks without first locating or borrowing the actual shares needed for timely delivery at settlement, sometimes in a concerted action to manipulate a stock price downward. This week, the SEC made permanent a temporary rule they had enacted last fall, proposed some new transparency measures, and announced plans for a Roundtable discussion on September 30.

That is some progress, but not enough. Two months from now, the Commission will finally begin to discuss publicly the potential solutions that I and a bipartisan group of Senators have been urging: either a pre-borrow requirement or a centralized "hard locate" system, which would prohibit short selling unless the executing broker first obtains evidence of a unique identifier number associated with specified shares set aside for timely delivery. The Depository Trust & Clearing Corporation tells us that it has the capacity and the willingness to implement that system - but only if the SEC requires it through a rule.

Third, the SEC should ban the use of so-called "flash orders" by high-frequency traders. Flash orders allow exchange members who pay a fee to get a first look at share order flows before the general public. By viewing this buy and sell order information for just milliseconds before it goes to the wider market, these investors gain an unfair advantage over the rest.

As the New York Stock Exchange complained to the SEC on May 28, selling flash orders for a fee provides "non-public order information to a select class of market participants at the expense of a free and open market system." To use a baseball metaphor, flash orders allow some batters to pay to see the catcher's signals to the pitcher, while the rest of us don't see them. Markets that permit a privileged few to have special access to information cannot maintain their credibility.

Amazingly, it is a loophole in current regulations that allows this unfair practice. This can and should be fixed immediately.

Finally, the SEC should establish disclosure and transparency equality: the disclosure requirements that apply to pooled funds worth greater than $100 million should apply uniformly to all, including hedge funds, for both long and short positions. And the level of transparency for order flows should be the same for all.

When millions of Americans have lost so much money in the stock market, how can we expect them to reinvest their savings when Wall Street players continue to make record trading profits by exploiting loopholes using high-speed computers? William Donaldson, former Chairman of the SEC and the New York Stock Exchange, has said "This is where all the money is getting made . . . If an individual investor doesn't have the means to keep up, they're at a huge disadvantage."

America was founded on the principle of equal opportunity. While we should keep encouraging the kind of commercial ingenuity that fuels the prosperity of our financial markets, we must ensure that technology is not employed to advantage one small group over the rest. The SEC must deliver on investor protection to restore the integrity and credibility of America's financial markets.

Mr. Kaufman is a Democratic senator from Delaware.

If you can't beat them, you know what to do.. if you had the guts to invest back in Nov, you would have had a 210%+ return..

Mediocre people get into Goldman and BELIEVE they are super-stars;
People who BELIEVE they are super-stars leave Goldman and realize they were always mediocre...

I interned at Goldman on the Nasdaq trading desk many years ago, and I can tell you that there were NOT an abundance of "smart" people on the desk. However, what I did discover is that their IT department consisted of more employees than any other department. If you could hit a home run in softball, you were "smart" enough to be a trader there. No worries, the systems will do all the heavy lifting, but we'll let you believe that you have talent. What a joke.

210%. Lmao. Smithers, can you wrap your tiny broker mind around the concept of Beta?

Further to your financial education, I bet less than .001% of the float traded at that price. Lmao again. How goeth on 1965 B'way?

Now this is surprising

http://www.ft.com/cms/s/0/ae3d459a-7f8e-11de-85dc-00144feabdc0.html

n a survey of 17,000 Americans, Brand Asset Consulting found that Goldman’s stature – as measured by several gauges of brand strength – had suffered in 2008 and 2009.

“Goldman Sachs still has that Gordon Gekko look to it among the general public,” said Anne Rivers, who oversaw the survey, referring to the villain of the 1987 film Wall Street.

http://www.ft.com/cms/s/0/e84383dc-7f8c-11de-85dc-00144feabdc0.html

ALLOW ME TO ADD MY OWN COLOR. THE WAY WALL STREET WORKS IS FIND SOMEONE DUMBER THAN YOU TO TRADE WITH. USUALLY FOR WALL STREET ITS A REGIONAL, FOR A REGIONAL ITS RETAIL CUSTOMER. NOW WE FOUND THE DUMBEST BUYER OF ALL "THE FED"

Wall Street banks are reaping outsized profits by trading with the Federal Reserve, raising questions about whether the central bank is driving hard enough bargains in its dealings with private sector counterparties, officials and industry executives say.

The Fed has emerged as one of Wall Street’s biggest customers during the financial crisis, buying massive amounts of securities to help stabilise the markets. In some cases, such as the market for mortgage-backed securities, the Fed buys more bonds than any other party.

Great Op-Ed by Krugman on how Goldman, et. al. combine “private profitability” with “social uselessness.”

http://www.nytimes.com/2009/08/03/opinion/03krugman.html?_r=1

But speculation based on information not available to the public at large is a very different matter. As the U.C.L.A. economist Jack Hirshleifer showed back in 1971, such speculation often combines “private profitability” with “social uselessness.”

sounds a lot like insider trading...

"The success of Goldman stems from its ability to recruit, develop and retain the best talent in the market, and weed out the bad eggs and impostors.(especially in core business areas) The large compensation allows the company to attract and hire the best ones. No surprise they want to keep bonuses high. It's part of the business model."

Combine that quote with the Krugman point: these guys create wealth for themselves by manipulating the psychology driven valuations in the financial system. They produce nothing of value to society, and actually risk it's very structure. Their ability to exploit the system and capitalize on the forthrightness of ordinary citizens make them, in their eyes, "superior." They are leeches. Parasites. Their infiltration and manipultion of gov't policy only serves to underline these truths fact.

I just read this
http://www.nypost.com/seven/08042009/news/regionalnews/goldman_princes_told__spend_like_paupers_182904.htm

Goldman Sachs CEO Lloyd Blankfein (right) has warned his employess to avoid making big-tick-et, high-profile purchases as the gold-plated Wall Street firm hunkers down amid a firestorm of public and political anger over outsize bonus payments.

BUT WAS REMINDED OF THIS.....
http://therealdeal.com/newyork/articles/8696
Goldman Sachs Chairman and CEO Lloyd Blankfein has closed on units 16A and 17A at 15 Central Park West for $26 million, according to public records. Media reports had long pegged the price of his condo at $27 million. Blankfein, who took over the firm after former CEO Hank Paulson became U.S. treasury secretary, has been credited with re-directing Goldman away from some damaging investments. Fortune magazine ranked him No. 3 on its list of the most powerful people in business. TRD

combines “private profitability” with “social uselessness.”

Nice emotive phrase, when you dont have an argument insult the opposition.

http://bloomberg.com/apps/news?pid=20601087&sid=a_PAIU9jvWWA

Aug. 4 (Bloomberg) -- The U.S. Securities and Exchange Commission will seek to ban flash trades that give some brokerages an advance look at orders, Senator Charles Schumer said, citing a conversation with SEC Chairman Mary Schapiro.

http://www.bloomberg.com/apps/news?pid=20601087&sid=anmUt3cxZCL4

Aug. 4 (Bloomberg) -- Goldman Sachs Group Inc., which earns more money trading equities than any other U.S. bank, sent a letter to clients explaining its high-frequency trading as regulators and politicians step up scrutiny of the practice.

Goldman Sachs doesn’t use so-called flash programs “in the execution of client agency orders” and its high-frequency trading systems don’t see client order flow, the New York-based bank said. Such trading accounted for less than 1 percent of total revenue and value-at-risk, a measure of risk-taking, in the first half of 2009, the bank said, noting that the “vast majority” of the business stems from its role as a supplemental liquidity provider on the New York Stock Exchange.

http://www.bloomberg.com/apps/news?pid=20601087&sid=as4Zs_M57Hbs

Aug. 5 (Bloomberg) -- Goldman Sachs Group Inc., the most profitable trader of fixed-income securities in the U.S., said it’s cooperating with government inquiries relating to the credit-default swaps market.

The company and some affiliates “have received inquiries from various governmental agencies and self-regulatory organizations regarding credit-derivative instruments,” New York-based Goldman Sachs said in a quarterly regulatory filing with the U.S. Securities and Exchange Commission today. “The firm is cooperating with the requests.”

Goldman Sachs, which made more than $100 million in trading revenue on a record 46 separate days in the second quarter, didn’t provide further information on the nature of the inquiries. The bank is also cooperating with inquiries on compensation, the filing showed, without providing details.

The U.S. Justice Department last month confirmed it was investigating the $27 trillion market for trading credit default swaps. The Department is trying to determine whether the banks that own Markit Group Ltd., a London-based data provider, received advantages as owners and providers of prices and trading patterns for the contracts, according to two people familiar with the matter.

Today's chapter..
http://www.nypost.com/seven/08062009/business/government_sachs_183222.htm

http://www.nytimes.com/2009/08/09/business/09paulson.html?ref=business

Before he became President George W. Bush’s Treasury secretary in 2006, Henry M. Paulson Jr. agreed to hold himself to a higher ethical standard than his predecessors. He not only sold all his holdings in Goldman Sachs, the investment bank he had run, but also specifically said that he would avoid any substantive interaction with Goldman executives for his entire term unless he first obtained an ethics waiver from the government.
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Add to Portfolio

But today, seven months after Mr. Paulson left office, questions are still being asked about his part in decisions last fall to prop up the teetering financial system with tens of billions of taxpayer dollars, including aid that directly benefited his former firm. Testifying on Capitol Hill last month, he was grilled about his relationship with Goldman.

“Is it possible that there’s so much conflict of interest here that all you folks don’t even realize that you’re helping people that you’re associated with?” Representative Cliff Stearns, Republican of Florida, asked Mr. Paulson at the July 16 hearing.

I was too worried. Nothing will happen.
http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=N00009638

his table lists the top donors to this candidate in the 2008 election cycle. The organizations themselves did not donate , rather the money came from the organization's PAC, its individual members or employees or owners, and those individuals' immediate families. Organization totals include subsidiaries and affiliates.

Because of contribution limits, organizations that bundle together many individual contributions are often among the top donors to presidential candidates. These contributions can come from the organization's members or employees (and their families). The organization may support one candidate, or hedge its bets by supporting multiple candidates. Groups with national networks of donors - like EMILY's List and Club for Growth - make for particularly big bundlers.

University of California $1,591,395
Goldman Sachs $994,795
Harvard University $854,747
Microsoft Corp $833,617
Google Inc $803,436

http://www.thedeal.com/dealscape/2009/08/housewives_of_goldman_sachs.php#bottom

If producers at Bravo are looking for a new cast to add to its "Housewives" franchise reality show, someone should pitch them on "The Real Housewives of Goldman Sachs."

Laura Blankfein, wife of Goldman Sachs Group Inc. (NYSE:GS) CEO Lloyd Blankfein, and Susan Friedman, wife of Goldman executive Richard Friedman, reportedly caused a brouhaha at a Hampton's social event last weekend at Super Saturday, a charitable designer clothing sale, cutting in front of ticket holders.

Blankfein reportedly said she wouldn't wait with "people who spend less money than me." If that comment holds true, perhaps Lloyd should have a sit-down with his wife and have the same speech he gave his employees about keeping a low profile.

As suspicions rise on Goldman's lofty profits and bonuses with the government reportedly even questioning Goldman for those monies, look for the spotlight to continue to shine on the company's executives as well as family and friends. Perhaps, in some regard, these folks were better off when Goldman was under TARP. - Gerald Magpily

http://www.bloomberg.com/apps/news?pid=20601103&sid=a4PWQBl9WmBU

Aug. 17 (Bloomberg) -- The Federal Reserve dropped Pacific Investment Management Co. and Goldman Sachs Group Inc. from the list of firms helping the central bank purchase as much as $1.25 trillion of mortgage securities this year.

“These changes are not performance related,” the New York Fed said. The bank “anticipated that it would make adjustments to its use of external investment managers as it gained more experience.”

The change comes amid concern that the Fed’s asset managers may use inside information garnered from their roles in their other businesses. Representative Patrick Murphy, a Pennsylvania Democrat, sought reports to Congress on the potential conflicts earlier this year. The asset managers’ contracts call for a segregation of staff working on the program.

http://www.zerohedge.com/article/artists-impression-goldman-sachs-bonus-securitization-offering

he 0% Subordinated HFT Participation Notes represent a securitization of forward-looking executive-retention payments, payable to Goldman Sachs employees. The Notes will pay interest in the form of negative-accrual on the notes on August 19 and February 19 of each year. The first such negative-accrual will be made on February 19, 2010. The Notes WILL NOT be guaranteed by Goldman Sachs Group, Inc. or any of its affiliates. The HFT Notes will be collateralized by proceeds from the bond and an indirect guarantee from the United States Treasury. Both the GSBS I collateral and Treasury Guarantee are for the sole benefit of the Goldman Sachs Group Inc. executive retention program, not holders of the HFT Notes. In the event that GSBS I collateral is not sufficient to meet the "2010 Bonus Payment Amount", the United States Treasury has provided a full and unconditional guarantee for any shortfall in payment amount.

At the earlier of the scheduled maturity date (December 31, 2010) or the "Bonus Payment Date", all principal outstanding for the HFT Notes will be extinguished. At the maturity, all collateral in the GSBS I entity will be paid out to executives, which will result in zero recovery value for the HFT Notes. In exchange for the participating in this HFT Note transaction, participating holders will be "exempted" from front-running by Goldman Sachs Group Inc. proprietary and high-frequency trading activities. Such exemption period will last until the "Bonus Payment Date", at which point Holders of the HFT Notes will be subject to front-running, dark-pools, scalping, and other trading actions that Goldman Sachs Group Inc., in its sole discretion, deems appropriate. If Goldman Sachs becomes obligated to pay additional amounts to non-U.S. investors due to changes in U.S. withholding tax requirements, Goldman Sachs may redeem the notes before their stated maturity at a price equal to 100% of the principal amount redeemed plus accrued interest to the redemption date.

http://www.nypost.com/seven/08222009/business/3_mile_goldman_185911.htm

* The mountains of money that Goldman Sachs is both making and intending to pay its employees has become so toxic that CEO Lloyd Blankfein is mounting a cleanup effort that includes possible tweaks to employee compensation and hiring an image consultant

http://www.youtube.com/watch?v=glSN4qvjt2E

http://www.youtube.com/watch?v=_lgLaY9BiAo&eurl=http%3A%2F%2Fthestimulist.com%2Fgoldman-or-goodfellas%2F&feature=player_embedded#t=128

Don't buy anything!!

http://online.wsj.com/article/SB125088307063549883.html

"We have been forced to do just extraordinary things and, frankly, offensive things to help save the economy," Mr. Geithner said. "I am completely confident that none of those decisions…had anything to do with the specific interest of any individual firm, much less Goldman Sachs."

I'm shocked, shocked to find that gambling is going on in here!

http://online.wsj.com/article/SB125107135585052521.html

Every week, Goldman analysts offer stock tips at a gathering the firm calls a "trading huddle." But few of the thousands of clients who receive Goldman's written research reports ever hear about the recommendations.

Securities laws require firms like Goldman to engage in "fair dealing with customers," and prohibit analysts from issuing opinions that are at odds with their true beliefs about a stock. Steven Strongin, Goldman's stock research chief, says no one gains an unfair advantage from its trading huddles, and that the short-term-trading ideas are not contrary to the longer-term stock forecasts in its written research.

Analysts have a financial incentive to give clients useful information. Goldman sets aside roughly 50% of money allotted each year to analyst compensation to distribute based on feedback from trading customers. The balance of analysts' pay is determined by the performance of their stock picks. That pay system is common among major Wall Street firms.

and now from William Black(related)
http://roomfordebate.blogs.nytimes.com/2009/07/14/goldmans-gain-americas-risk/
Of course, you can’t send out a memo to 10,000 employees and tell them explicitly to engage in either ultra high-risk strategies or accounting fraud. That’s the genius of bonus systems — you can send the same message without risk of prosecution. When the Business Roundtable was looking to respond to the Enron and WorldCom wave of “control frauds,” they choose as their spokesman Franklin Raines, then chief executive of Fannie Mae. A reporter asked him why there were so many scandals on Wall Street. Mr. Raines replied:

http://dealbreaker.com/2009/08/goldman-sachs-a-huddle-is-not.php

http://ftalphaville.ft.com/blog/2009/08/28/69076/anatomy-of-a-goldman-trading-huddle/

If the Bloomberg data is accurate, Goldman’s defence — “that the analyst had published a 12-month price target that was above the price of the shares at the time the huddles were held” — appears a little weak.

It’s true Mr Irizarry’s target was about three cents above the actual shareprice of $23 (or 13 per cent) — but his April 8th rating and price target adjustment ($32 is 28 per cent higher than the stock’s April 8th price of about $24) appears to have marked a step-change in his opinion on the stock.

By Hugh Son
Sept. 3 (Bloomberg) -- American International Group Inc.
Chief Executive Officer Robert Benmosche said that he told the
insurer’s derivatives employees to focus on maximizing the value
of assets they are unwinding over speed in exiting the trades.
Benmosche, 65, the former MetLife Inc. CEO, held several
employee town hall meetings since being named last month as the
insurer’s fifth CEO since 2005. He replaced Edward Liddy, who
announced he would step down in May. Here are selected remarks
Benmosche made during an Aug. 11 meeting in Houston for life
insurance workers, according to a record obtained by Bloomberg.

On the employees unwinding AIG’s derivative contracts:
“I told them yesterday that my biggest concern is you’re
selling too fast and you’re being taken by Wall Street. I don’t
want to feed Goldman Sachs’s bonus pool anymore. I don’t want to
feed Morgan Stanley’s bonus pool anymore. I want to feed ours.
In order to do that, you’ve got to stop giving this stuff away.
You’ve got to ask for decent prices or we’ll wait.”

Socialist ownership systems don't work. If the workers own a company, then the goal of the company is to maximize employment and therefore you don't have a competitive cost structure and you'll lose profitability, market share, and eventually drive yourself out of business.

Socialist ownership systems don't work. If the workers own a company, then the goal of the company is to maximize employment and therefore you don't have a competitive cost structure and you'll lose profitability

ok. I'm not an advocate of Socialism, but I can never resist the role of devil's advocate.
If you give workers shares. they'll want to maximize stock market value and insure employment(mixture). There is an argument that they'll vote against bringing in new owners if it would dilute their stake.

Good Speech.

http://www.ft.com/cms/s/0/ffb670be-9d33-11de-9f4a-00144feabdc0.html

"ok. I'm not an advocate of Socialism, but I can never resist the role of devil's advocate.
If you give workers shares. they'll want to maximize stock market value and insure employment(mixture). There is an argument that they'll vote against bringing in new owners if it would dilute their stake."

Problem is, when the shares aren't big enough.. they end up realizing that screwing the company for a few more bucks in their pocket still makes sense, because the loss on the ownership front is less.... *particularly* when their jobs are protected. Unions have no problem screwing themselves as taxpayers, for instance...