Goldman Sachs raises $5.5 billion for pension and endowment asset purchases

April 13, 2009 by · Leave a Comment
Filed under: Industry News 

Please bring your attention to the FACT that they will be purchasing assets from pensions and endowments with this $5.5 billion dollars.  I would like to know if all the money came from private investors or company funds.  First off, Goldman Sachs did take TARP bailout money so it makes me wonder if this is a hidden bailout for the pensions and endowments that were either steered or willing invested in pretty shady financial vehicles.  

Or, is this what is to come, with the U.S. taxpayer bailing out all these banks, now they have this huge advantage by getting fresh cash from the Fed & Treasury because asset prices are so depressed.  I would like to know more about what assets these funds are offloading.  Something does not smell right here.

News (Bloomberg):

Goldman Sachs Group Inc. raised a fund with about $5.5 billion in capital commitments to buy private-equity assets on the secondary market from endowments and pensions that have been stung by losses.

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Goldman Sachs’ Blankfein wants Mark-to-Market rule to stay put

February 9, 2009 by · Leave a Comment
Filed under: Opinion 

We completely agree with Mr. Blankfein’s opinion.  Just because people decided to overvalue assets to such excesses does not mean when things don’t go their way, we should abandon our accounting standards to preserve mal-investment.  This just shows that our current banking system is in fact “insolvent” and we have resulted to jiggering with our accounting methods to keep these banks and other financial institutions from going bust.  

We should make everyone come clean with their assets and liabilities ASAP and if you are solvent then we should assist them with taking over the good assets and if your insolvent, then your bond and shareholders takes the losses along with the bad assets.  Yes, we should let bad banks go under.  This is what will bring stability and confidence to the markets.  We are just prolonging our crisis and making it worse trying to bailout bad banks that made bad decisions when they were GREEDY

News:

Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein said the financial industry shouldn’t abandon the “mark-to-market” accounting rules that some banks blame for aggravating global economic woes.

The rules, which require banks to book profits or losses when asset values rise or fall, should be even more rigorous, Blankfein wrote in an op-ed piece published yesterday on the Financial Times’s Web site. New York-based Goldman’s adherence to the practice “was a key contributor to our decision to reduce risk relatively early” in the credit crisis, he wrote.

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Goldman Sachs posts loss since going public in 1999

December 16, 2008 by · Leave a Comment
Filed under: Stock Market News 

No doubt that we will see continue losses and write-downs in the future until they finish de-leveraging and find a sustainable balance in their business model.  It is sad that all the investment banks have either gone out of business or are now commercial bank holding companies.   Capitalism is not dead but it needs a second to catch its breath.  

This is what happens when people get too greedy and they lose all fear.   It is always a balance of Fear vs. Greed.  The is the natural balance that keeps the free market in check.  That is why it is bad when government start intervening and picks winners and losers, it through everything out of whack and make private capital evacuate the market until the rules quit changing every other day. 

News:

Goldman Sachs Group Inc reported its first quarterly loss since going public nine years ago as plunging values of stocks, debt and real estate caught up with a Wall Street leader that until recently had sidestepped the worst of the crisis.

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Goldman Sachs urged shorting against Muni bonds it sold to clients

November 11, 2008 by · Leave a Comment
Filed under: Stock Market News 

Well at the time the Californian Municipal bonds most likely looked good in a market that was thought to continue to go up forever.  Now that reality and common sense has set in, they are giving good investing advice.  In capitalism these type of things happen in the battle of greed vs. fear.  When I read this I just chuckled for a bit, everyone needs a little entertainment during all this doom and gloom (which is warranted).

News:

Goldman Sachs Group Inc, which acted for the state of California in selling bonds, has urged some of its big clients to place investment bets against some of those bonds this year, the Los Angeles Times reported.

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Goldman Sachs and JPMorgan to Become Commercial Bank Holding Companies

September 21, 2008 by · 1 Comment
Filed under: Industry News 

It is true when they say this changes the face of Wall Street. In the NY Times article they mentioned the leverage both banks carry is twice what the major commercial banks are, it will be interesting to see what they do to bring this down and what regulation is in place for this and how it will affect their compliance or if the New York regulators even care? What I do love is the mention that with access to the Fed’s discount window, they will now have “permanent liquidity”. I guess it really does not matter if you make bad decisions in the U.S. financial sector, you are now basically rewarded by getting whatever capital is needed to stay afloat.

News Piece:

Goldman Sachs and Morgan Stanley, the last two independent investment banks, will become bank holding companies, the Federal Reserve said Sunday night, a move that will fundamentally alter the landscape of Wall Street.

The move alters one of the models of modern Wall Street, the independent investment bank, soon after the federal government unveiled the biggest market intervention since the New Deal. It heralds new regulations and supervision of previously lightly regulated investment banks, as well as an end to the outsize paychecks that helped shape the image of the chest-thumping Wall Street banker.

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