Response to Goldman CEO Lloyd Blankfein’s Bloomberg TV interview
This is not pointed at Goldman Sachs per say or Lloyd directly. I do feel that we treat grey areas in business endeavors as morally okay just because we may not have adapted with rules to prevent overt exploitation. This comment is not about that.
I do have to say that Mr. Blankfein should not of done that interview yesterday on Bloomberg TV, and with no surprise, is really hard to find at the moment. It applaud him at least trying to explain some of the firms culture, objectives and mis-steps.
BUT, BUT, dear sir.
Lloyd through out the duration of this interview, gave THE MOST convincing argument for the FULL re-reinstatement of the Glass-Steagall Act we have had to date in my humble but serious opinion.
In effect he said that “when you invest for a customer (client) and LEND to them, “Ah-Ha”, you now have an INTEREST in the outcome of any given transaction. You are absolutely correct in your analysis of the nature of these types of transactions.
But this is also one of the major reason for Glass-Steagall. It separated the deposit taking commercial banking side that lends money from the investment banking side that invests it and give advice. The most he gave us on if this what a good idea what that he said “he felt” that the world needed companies like this to be competitive today.
I would respond with, that type of competition sounds pretty ruinous if we are at a point where our advice givers have to play both sides AND lend to be competitive. Yes we are in a world of constant competition but that does mean that we need to throw objectivity and real integrity over-board to compete.
What really has happened is that Goldman Sachs is now a public company that has a long and vaulted history with major expectations from not only stock-holders but also historians to continue to live up to this past. To do this they have needed every advantage and inside connection to continue this miracle (they can be good and bad).
I believe when we are at a point where we need to compromise our integrity of our business to meet the “challenges of our current global landscape” we really need to reevaluate what our priorities are.
Money is not an end in itself, just a very useful tool to give you opportunities in life. I agree with have a some what fair market system with the most important purpose to provide opportunity and general betterment to all people. If we miss this important point then we are missing the whole point. If you think this system is instead for the chance of being one of the few people who get to live lifestyles that are written and talked about then you have been captured and fully mis-guided.
I am not advocating any sort of full equality because we are all given different talents and traits but YES SIR, there is too poor and to ignore that means you have lost some of your own humanity. I just want a fair game that provides basic opportunity to all who participates and from there we will see where the chips will fall. Instead of attacking capital and wealth I would rather come up with creative ways of providing incentives for wealth to help provide more opportunity. It is a truly win-win.
Here is the best I could find so you could watch the interview. I think it will be increasingly hard to find it in full length.
Link (Bloomberg Videos)
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JPMorgan joins Goldman Sachs keeping Italy derivatives risk murky
$5 trillion is quite a bit of debt insurance to have exposure on. This could be of concern, both banks should clear up where a majority of this exposure originates before this rumor-mill gets out of control. I would assume that debt insurance is purchased in places where there was enough risk to bring that type of protection into the picture. I would think that the emerging portion of the Eurozone would be of higher risk. Banks need to set this straight soon, they already still haven’t fully disclosed and written down all they liabilities they still have from the U.S. real estate bubble of 2007.
Bloomberg (Christine Harper) – JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS), among the world’s biggest traders of credit derivatives, disclosed to shareholders that they have sold protection on more than $5 trillion of debt globally. Just don’t ask them how much of that was issued by Greece, Italy, Ireland, Portugal and Spain, known as the GIIPS.
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Trader Alessio Rastani: “Goldman Sachs Rules the World”
You have to watch this and send it around. It is hilarious but not in a funny ha ha way but a, “oh s$^t” he is talking true to power type funny. I am not even going to quote portions of this video. Watching it in it entirety is much preferred. JUST WATCH IT.
What I took from it, is things are coming to the head and much more pain is on the way. Your government will not have the answers and you need to protect yourself.
Video:
Note: Sorry that the video is too wide, too good to pass up.
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Gold may climb to record $1,650 an ounce on Fed easing
I love the $1,650 call by Goldman Sachs. 1650 is the magic number these days, I wonder where I heard that before (*cough Jim Sinclair *cough). Gold is really breaking out, currently last time I checked it is at $1,370 per ounce. We are seeing the reaction to the multi-trillions of new debt we are creating. Its a total debasement of the U.S. dollar.
As long we continue this path, gold is going higher and the dollar will continue to lose value. The USDX (Weighted currency index) is at 77, (70) is the lowest it has been recorded at. Goldman stated in this article that gold prices will come down when the economy recovers. This may be true but we will need to see major cuts in federal spending and much higher taxes. Right now, gold is being re-monetized as money and if this fully occurs then even if the U.S. dollar regains confidence, people may still use gold to store wealth because they are not certain if our politics will not revert back to the same old games we have been running in this country since the end of WWII.
Bloomberg - Gold may rally more than 20 percent from this month’s record to a high of $1,650 an ounce in 12 months as the Federal Reserve takes action to stimulate the U.S. economy, according to Goldman Sachs Group Inc.
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Video: Janet Tavakoli (Derivatives Expert) on Goldman Sachs Alleged Fraud
Glad to finally see some investigations really take off so we can punish the bad actors and set the proper precedence that fraud in our financial system is not welcome. Ms. Tavakoli is right that this case needs to be handled very carefully so that is does not get framed as a political witch hunt on the behalf of the SEC that along with other agencies did not use there regulating powers during the good times when obvious fraud was happening in a daily basis.
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Goldman Sachs Board Rejects Shareholder Demands on Pay Restrictions
No surprise this request from Goldman shareholders fell on deaf ears. This issue will only be settled in the courts. Goldman has a reputation of lavish compensation and that creates an environment that makes smart people who want to work hard and make oddles of cash. That could be the reason why the board didn’t want to do anything that could possible tarnish that image regardless of the the public opinion is off their compensation.
Wall Street Journal - Goldman Sachs Group Inc. said its board of directors rejected demands from shareholders that the investment bank investigate excessive compensation and take steps to recoup some awards given to executives.
The company reported in a filing with the Securities and Exchange Commission that it received several letters from shareholders asking for the firm to revamp the way it pays out salaries, benefits and compensation. Goldman’s board “rejected the demands,” according to the filing.
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Feinberg Says He Spoke With Goldman Sachs CEO About Compensation Plans
It is good we are seeing more compensation that is based on performance of the stock of a firm and not large cash payments that could encourage one-time bumps in earnings for bonuses even if they are putting the firm into more risk. Over time this will also help shareholders because everyones goals will be much more aligned and investors can have more confidence investing in these firms for the long-term, opposed to speculating.
Bloomberg - Kenneth Feinberg, the U.S. special master on executive compensation, said Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein consulted with him on the firm’s pay plans and adopted his “prescriptions.”
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