It’s All About The Money
“Wall Street is suiting up for a battle to protect one of its richest fiefdoms, the $592 trillion over-the-counter derivatives market that is facing the biggest overhaul since its creation 30 years ago.
Five U.S. commercial banks, including JPMorgan Chase & Co., Goldman Sachs Group Inc. and Bank of America Corp., are on track to earn more than $35 billion this year trading unregulated derivatives contracts. At stake is how much of that business they and other dealers will be able to keep.
“Business models of the larger dealers have such a paucity of opportunities for profit that they have to defend the last great frontier for double-digit, even triple-digit returns,” said Christopher Whalen, managing director of Torrance, California-based Institutional Risk Analytics, which analyzes banks for investors.
The Washington fight, conducted mostly behind closed doors, has been overshadowed by the noisy debate over health care. That’s fine with investment bankers, who for years quietly wielded their financial and lobbying clout on Capitol Hill to kill efforts to regulate derivatives.”
Click for ARTICLE
- Wall Street Stealth Lobby Defends $35 Billion Derivatives Haul
- Christine Harper, Matthew Leising and Shannon Harrington
- Bloomberg
- August 31, 2009
Five Wall Street banks make $35 BILLION PER YEAR! And HALF of that is paid out in BONUSES. So over the course of 10 years those Wall Street banks might make $350 BILLION and pay out BONUSES of $175 BILLION to their traders and CEOs.
That is why it is NOTHING for Wall Street to spend $1 BILLION on LOBBYING. In fact from their perspective it is the smartest investment they could make.
Now you understand why Wall Street is pouring obscene amounts of money on politicians, lobbyists, academics, journalists and anyone else. They are making millions of dollars in campaign contributions to Senators and Congressmen through a web of Polticial Action Committees (PACs) and other avenues. They have hired ALL the top lobbying firms in DC. They are calling in all their markers with the academic community: endowing research chairs, hiring academics for “consulting” purposes and basically using all the ways they can to buy influence. Same thing with journalists that they’re waving book deals in their faces, asking them to speak at conferences (for a fee of course) and any other way of stuffing cash in their pockets.
All the methods they are utilizing are well known (see previous POST).
The American Government has been taken over in a QUIET COUP led by Wall Street banks (see all related POSTS).
Unless the commoners are gathered at the gates of the castle with lanterns and pitchforks, the elected officials in Washington will take the millions in campaign contributions and turn a deaf ear to their consituents every single time.
Academic Researchers At James A. Baker III Institute Say Speculators Drove Oil Prices And CFTC’s Study Was Flawed
A new academic study contends that speculation by financial players like banks, hedge funds and index funds was behind the steep rise in oil prices last year and says that the Commodity Futures Trading Commission used models that were “not adequate” when it argued that speculation was not a major factor in the oil price spike.
The authors of the study, Kenneth Medlock and Amy Myers Jaffe, from the Baker Institute for Public Policy at Rice University, write that the commission looked at models that measured volatility just in a couple of months to base their conclusion that financial speculation was not behind oil’s meteoric rise last year to $147 a barrel, from $80.
The authors argued that the commission should have been looking at the rise in the number of speculators in the market, most which were betting on higher oil prices, in order to gauge the effects that speculation was having. . . .
Ms. Jaffe told DealBook that the commission’s decision to play down the role of speculators was “politically motivated,” because the agency “didn’t want to be blamed for not having proper oversight of the markets.”
Click for ARTICLE
- Study Argues C.F.T.C. Missed Oil Speculation
- Cyrus Sanati
- The New York Times DealBook Blog
- August 27, 2009
One of the most surprising thing about this report is not the conclusions. We’ve known speculators were driving oil prices and we knew that many academic researchers were developing good data to back up those claims (see M.I.T. REPORT as one example). What I think is really surprising is that it’s the James A. Baker III Institute releasing this report.
James Baker could not be any more connected to the Bush Family (witness his work in the 2000 Florida Recount). The only thing I can think is that Big Oil has finally realized that financial speculators in the oil markets are bad for business from a long term perspective. We know that OPEC has called repeatedly for a crackdown on oil speculators (see POST).
Of course I suppose it could be that the academic researchers at the Baker Institute are truly nonpartisan, truly independent and truly committed to following the truth wherever it leads them. I guess I’ve spent too much time in D.C.
Click for Baker Institute REPORT
Goldman Sachs Running Scared (All The Way To The Bank)
“Blankfein, of course, has a good reason to be worried. Brand and image is more important now than ever before, and the CEO’s internal research shows that Goldman is taking a beating like never before. Some of the criticism of Goldman is of course, absurd, . . . Some of it isn’t . . .
It almost doesn’t matter—it’s all starting to stick, and Goldman has suddenly replaced Citigroup, Merrill, and even Lehman as the leading culprit of Wall Street greed and abuse committed during the financial crisis. In the good old days, Goldman could just ignore the chattering class, make a lot of money, and tell the rest of the world to screw off. . . .
“Blankfein is scared to death about what might happen when the bonus numbers hit,” one executive says.”
Click for ARTICLE
- Goldman Execs Blame Anti-Semitism
- Charlie Gasparino
- The Daily Beast
- August 27, 2009
The more we find out about Goldman, the more its impregnable facade cracks and the more people are emboldened to speak out and reveal things. I expect the media storm to increase in intensity. If the economy is in full retreat by the end of the year and unemployment is rising then multi-million dollar bonuses from a company bailed out by the U.S. taxpayer will lead to full-scale investigations. At that point maybe the truth will be fully revealed.
Roubini Warns That Speculative Oil Bubble Threatens World With Double-Dip Recession
“Another reason to fear a double-dip recession is that oil, energy and food prices are now rising faster than economic fundamentals warrant, and could be driven higher by excessive liquidity chasing assets and by speculative demand. Last year, oil at $145 a barrel was a tipping point for the global economy, as it created negative terms of trade and a disposable income shock for oil importing economies. The global economy could not withstand another contractionary shock if similar speculation drives oil rapidly towards $100 a barrel.” Click for ARTICLE
- The risk of a double-dip recession is rising
- Nouriel Roubini
- Financial Times Opinion
- August 23, 2009
One of the world’s most respected and listened-to economists can see what is obvious to market observers: namely oil was a bubble in 2008 and it is looking bubbly again in 2009. Since oil is the single most important commodity on the planet it makes no sense for the oil price to be determined by Wall Street commodity market vigilantes.
Note that Roubini has been examining and commenting on the speculative bubble in oil prices since at least 2006. See earlier POST.
Stench Emanating From Goldman Is Getting Nastier By the Day
“Goldman Sachs Group Inc. research analyst Marc Irizarry’s published rating on mutual-fund manager Janus Capital Group Inc. was a lackluster “neutral” in early April 2008. But at an internal meeting that month, the analyst told dozens of Goldman’s traders the stock was likely to head higher, company documents show.
The next day, research-department employees at Goldman called about 50 favored clients of the big securities firm with the same tip, including hedge-fund companies Citadel Investment Group and SAC Capital Advisors, the documents indicate. Readers of Mr. Irizarry’s research didn’t find out he was bullish until his written report was issued six days later, after Janus shares had jumped 5.8%.
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.
At the meetings, Goldman analysts identify stocks they think are likely to rise or fall due to earnings announcements, the direction of the overall market or other short-term developments. Some of their recommendations differ from ratings printed in Goldman’s widely circulated research reports. Some Goldman traders who make bets with the firm’s own money attend the meetings.
Critics complain that Goldman’s distribution of the trading ideas only to its own traders and key clients hurts other customers who aren’t given the opportunity to trade on the information. . . .
Since the trading huddles began about two years ago, Goldman has supplied “trading ideas” on hundreds of stocks to the traders and top clients, according to internal documents reviewed by The Wall Street Journal.” Click for ARTICLE
- Goldman’s Trading Tips Reward Its Biggest Clients
- Susanne Craig
- The Wall Street Journal
- August 24, 2009
Notice the hierachy of who gets the research first:
- Goldman’s proprietary traders
- Goldman’s biggest and fastest hedge fund clients
- Everybody else including vanilla mutual funds and retail clients
I thought this stuff was specifically outlawed years ago!?
It is interesting to note that the “trading huddles” began when Steven Strongin moved over from commodities-research to co-head equities research. This lends strong support to the ACCUSATION that Goldman’s proprietary oil traders used to front run the research department’s wildly bullish calls on oil prices.
UPDATE: FINRA and the SEC are investigating Goldman Sachs trading huddles. I can rest much easier knowing that the “Keystone Cops” who missed Bernie Madoff are on the case.
Click for ARTICLE
Pension Funds Already Freaking Out Over Potential UBTI Tax
“Congress will have a fight on its hands if it goes ahead with legislation that would for the first time require pension plans to pay taxes on gains from their investments in gas and oil commodities, pension fund executives said. . . .
Along with requiring pension funds and other tax-exempt institutions to start paying taxes on their energy-related commodity investment gains, the STOP Act also would force hedge funds and other speculators to pay ordinary taxes on their oil and gas trading profits. Those gains now can be taxed at the lower tax rate applicable to capital gains.
In an Aug. 6 statement on the Senate floor, Mr. Wyden said his legislation, which has been referred to the Senate Finance Committee, is needed to help rein in speculation in energy commodities that he said has driven up the price of oil for everybody.
“The legislation I am introducing today … will let some of the air out of this speculative balloon and help create a level playing field among companies participating in the commodities markets,” Mr. Wyden said in his statement.
Click for ARTICLE
- Battle brews over bill to tax oil, gas commodity gains
- Doug Halonen
- Pension & Investments Online
- August 21, 2009
Pension Funds, University Endowments and other tax-exempt institutional investors are directly competing with airlines, truckers, electric utitlities and others to buy commodities futures contracts. The UBTI tax that Senator Wyden has proposed would do exactly what it’s supposed to do which is level the playing field between tax-exempt entities and fully-taxed corporations.
We support anything that drives a stake into the heart of Index Speculation. Given that the pension fund community is acting more skittish than a vampire in a field of garlic at noontime, I think we’re on to something.
Click for Senator Wyden’s BILL & PRESS RELEASE
Wall Street Bank Predicting CFTC Actions Will Knock Oil Prices Down To $50 Per Barrel
“The days of record volatility in the oil market may be over now that the Commodity Futures Trading Commission moves to curb speculation in the futures market, analysts at Commerzbank say.
The group, which predicted last year’s stunning rise and crash of oil prices — which went from as high as $147 a barrel to about $35 a barrel — now say that the regulatory changes being considered by the futures regulator could bring prices back down to earth. The C.F.T.C. “has now declared war on the speculators,” the analysts wrote in a note to clients Thursday. “We therefore expect oil prices to fall to around $50 per barrel by the end of the year.”
It’s a point of view rarely expressed among oil analysts. The Commerzbank group, along with a few others such as Fadel Gheit at Oppenheimer and Timothy Evans at Citigroup, contend that the sharp movements in the price of oil have more to do with speculation than with real-world fundamentals.”
Click for ARTICLE
- Can the C.F.T.C. Tame the Oil Markets?
- Cyrus Sanati
- New York Times Dealbook
- August 21, 2009
It is a view rarely expressed BUT widely held nonetheless. If/when Index Specualtors are booted out of these markets the price of crude oil will be cut in half within 3 months. Where it goes after that will hopefully be determined by supply and demand. The key is that volatility will come way way down.
GG = BB? Is Gary Gensler the New Brooksley Born?
This year, Brooksley Born, received a Profile in Courage Award for her attempts in 1998 to regulate the over-the-counter (OTC) derivatives markets. She faced withering criticism and fierce opposition from Bob Rubin, Arthur Levitt, Alan Greenspan and Larry Summers (who are certainly not shrinking violets). In the end she was unsuccessful and Congress made it explicitly clear that the CFTC was not to regulate the OTC markets. (Please see our earlier POST)
This year we also saw the appointment of Gary Gensler former head of Goldman Sachs’ Tokyo office to the position of CFTC Chairman. There was a great deal of skepticism and opposition because of his background and the fact that he worked at Treasury on drafting the Commodities Futures Modernization Act (CFMA) which codified that the OTC markets were completely free from regulation.
Well at this point I am a true believer in Gary Gensler. He appears to have had a Damascus Road conversion experience when it comes to the need for strong regulation. Whereas before he was standing by and giving approval to the dismantling of regulations, today he is doing more than anyone else to lead the charge to re-regulate. I myself sat on the Swaps Desk at Swiss Bank and pooh-poohed Brooksley Born so I can say that these kind of profound conversions do happen.
Gary Gensler’s latest break with the Obama Administration reveals a great deal about his character and his ambitions. He and his staff worked on the recent Treasury Derivatives Proposal so they knew firsthand which loopholes were added for which special interest groups and why. Having lost the battle in 2000 to keep “commodities that exist in finite supply” from being de-regulated, Gensler is now in a position to push hard to bring meaningful reform and not just the appearance of reform. The politically expedient thing to do would be to remain silent and make the Obama Administration happy. By publicly highlighting all the loopholes in Treasury’s proposals, he has displayed real leadership and also incurred significant political risk.
I believe it is much too early to compare Gary Gensler to Brooksley Born. Back when Ms. Born made her courageous stand, the derivatives market was booming and she was truly the lone voice in the wilderness. Today the U.S. economy has been decimated by the implosion of the derivatives markets so Gensler is not really swimming against the tide like Ms. Born.
The great thing about Gensler though is that coming from Goldman Sachs he knows all there is to know about these markets and he has the market savvy, bred from experience, to go toe-to-toe with a Wall Street Bank CEO and decimate their baseless arguments. Gensler knows what real regulation looks like and he knows what it will take to protect the U.S. economy against another regulatory and systemic failure.
Unlike Ms. Born, Gensler is in a position with all the necessary tools and the proper climate on Capitol Hill (and out in the heartland) to be the most effective regulator the United States has seen in the last 50 years. Let us hope and pray that Gary Gensler aspires to be the new Brooksley Born.
CFTC Smackdown IV: Gensler vs. Geithner
“A top federal regulator has urged Congress to adopt tougher rules to govern betting in exotic financial instruments known as derivatives than the Obama administration has proposed, warning that the administration’s new vision of market regulation could contain loopholes.”
Click for WASHINGTON POST ARTICLE
“More over-the-counter derivatives should face mandatory clearing, a U.S. futures regulator said in suggesting improvements to the Obama administration plan to regulate the vast OTC derivatives market. . . .
A salient part of the administration proposal is a proposal for “standardized” OTC derivatives to go through central clearing. Clearinghouses mutualize risk, set margin requirements and make public the terms of trade.
In a letter to lawmakers, Gensler said the requirement for clearing should include end users, who would be exempt under the administration proposal.”
Click for REUTERS ARTICLE
“Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission, is asking Congress to strengthen the Obama administration’s legislative proposal for regulating the over-the-counter derivatives market. . . .
“The law must cover the entire marketplace without exception,” Gensler wrote in the Aug. 17 letter to Senate Agriculture Committee Chairman Tom Harkin, . . . Gensler attached more than 20 pages of language to insert into the bill “to ensure that we best meet this goal.”
Gensler, whose staff contributed to the bill that President Barack Obama sent to Congress last week, said he is seeking to “enhance” the proposal. Treasury Secretary Timothy Geithner in July told regulatory chiefs including FDIC Chairman Sheila Bair to stop campaigning for changes in Obama’s revamp of financial industry rules, a person familiar with the matter said.”
Click for BLOOMBERG ARTICLE
“I welcome (Gensler’s) suggestion for stronger requirements for clearing and exchange trading of swaps than is in the proposal from Treasury,” Harkin said in a statement Wednesday.
Click for ASSOCIATED PRESS ARTICLE
Wow! I wonder if Geithner dropped a few F-BOMBS on Gensler after this one.
So it seems like a skirmish has erupted between those independent regulators that want to (1) be Independent and (2) Regulate and Obama administration officials who want to appear to be cracking down on their banking buddies while actually leaving huge loopholes in the bill.
Nobody in DC is smarter or more in tune with how markets actually operate than Gary Gensler. Wall Street must be hating him right now because they can’t pull the wool over his eyes and bamboozle him with BS.
CFTC Smackdown III: A Baltimore Yankee In Lord Turner’s Court
“U.S. commodities regulator Gary Gensler said Thursday that his agency’s oversight powers will now literally touch down on foreign soil, another sign of the aggressive push to tighten financial market regulation.
The U.S. Commodity Futures Trading Commission’s latest tweak to a three-year- old agreement with U.K. regulators will let both agencies conduct on-site exchange visits and give the CFTC direct access to audit trail data to help survey all foreign futures contracts that settle against U.S. prices.
The move aims to close what may remain of the so-called “London loophole,” amid divergent policy moves by the CFTC and the U.K. Financial Services Authority, or FSA. The agencies on Thursday trumpeted an extension of their existing cooperation to include the sharing of advanced notices of exchange rule changes and disciplinary notices.
The FSA, which regulates ICE Futures Europe, signaled in a recent August meeting with U.S. officials it does not see a need to impose speculative position limits on its side of the Atlantic.
However, that represents a sticking point for concerned U.S. authorities who believe cross-border and cross-market regulation are both essential to tackling the problem.”
Click for ARTICLE
- CFTC Again Expands Its Turf Into Foreign Markets
- Sarah N. Lynch & Jacob Bunge
- Dow Jones Newswires
- August 20, 2009
The empty threat of overseas migration is hereby revoked! The only potential alternative to the United States for U.S. commodities trading was London. That is not going to happen now. Japan, Europe and Canada (spoke to an M.P. yesterday) desperately want to see a crackdown on excessive speculation. Dubai and Singapore were never viable options because they’re de-facto dictatorships (not democracies) without even mentioning the question marks surrounding their bankruptcy laws. Switzerland is caving to U.S. demands to reveal tax-dodgers – they’re not going to start trading our commodities. So now that Gensler has secured the cooperation of the FSA it is game over for the limit-dodging speculators.
Click for OFFICIAL PRESS RELEASE
CFTC Smackdown II: There’s A Disturbance In The Farce
“The CFTC said it was revising its no action letter with ICE Futures Europe to require the exchange to provide trade execution and an audit trail.
Under the modified agreement, the exchange would also have to provide CFTC staff on-site visits and give the CFTC copies of disciplinary notices on certain contracts.
“The CFTC must ensure that U.S. commodity markets operate fairly and efficiently and are free from fraud, manipulation and other market abuses,” CFTC chairman Gary Gensler said in a statement.
“Today’s action further ensures that the CFTC has the tools necessary to carry out its surveillance and enforcement mission while promoting market integrity in the energy markets,” he added.
The new provisions would apply to all ICE Futures Europe contracts currently linked to CFTC-regulated exchange contracts and those listed in the future.”
Click for ARTICLE
- U.S. CFTC tightens oversight of ICE
- Ayesha Rascoe
- Reuters
- August 20, 2009
The notion that Atlanta-based ICE, trading West Texas Intermediate Crude Oil futures contracts, was a U.K. company and should be regulated by the FSA was a ludicrous farce. As we’ve mentioned earlier the FSA is a CAPTURED REGULATOR. While I would have preferred that the CFTC just declare they’re taking over regulation of ICE, I suppose given today’s announcement plus the previous commitment to include ICE data in the Commitments of Traders report means that ICE effectively is being regulated by the CFTC.
Click for OFFICIAL PRESS RELEASE
CFTC Smackdown I: Principal Snatches Big Boys “Hall Passes”
A commodity investment unit of Deutsche Bank and another fund group have been stripped of their exemption from speculative limits in key agricultural futures including corn and wheat.
The move by the Commodity Futures Trading Commission reflects the US regulator’s growing scepticism towards commodity index investing and its concerns over the role of speculators in raw material markets.
Wednesday’s move is the first time the commission has revoked an exemption from position limits, a CFTC spokesman said.
Both the Deutsche Bank unit that operates two exchange-traded funds holding the agricultural futures contracts and New York-based commodity manager Gresham Investment Management will lose so-called “no-action letters” that let them surpass federal caps on holdings. They were the only two such letters issued in these crop markets.
The moves reflect the watchdog’s new vigilance toward index investors, who generally buy and hold commodity futures to track the price of benchmark commodities. Over the past month Gary Gensler, CFTC chairman, has raised concerns that large positions in relatively small markets could distort prices crucial to hedgers such as farmers. “I believe that position limits should be consistently applied and vigorously enforced,” Mr Gensler said in a statement.
Click for ARTICLE
- D Bank unit hit by CFTC crackdown
- Gregory Meyer
- Financial Times
- August 19 2009
What about AIG who purportedly had 50,000 wheat contracts!? They don’t have an exemption!?
Looks like we’ve finally got a regulator who wants to regulate!
Glad to see the CFTC is no longer bending the rules for the big boys.
Click here for the OFFICIAL PRESS RELEASE
Wall Street Cannot Admit It’s Fund Flows Not Fundamentals Driving Commodity Prices
“Funds, not fundamentals, are driving commodities prices higher. But with regulators keen to rein in speculators, recent gains might not bode well.
Rises have been across the board, from copper and gold to oil, as “green shoots” optimism pervades the markets. Still, many brokers have attributed the rise to bullishness of hedge funds and investment banks, rather than to underlying factors.
“It’s a tricky business for certain investment banks because nobody really wants to admit too strongly that these price moves are down to money, because money is speculation and speculation is something that is out of fashion,” said Stephen Briggs, an analyst at RBS Sempra in London.
“It’s quite awkward, because if you want to distract attention from [the price gains], you have to say it’s fundamentals, but then you have to ask, how can it be fundamentals?” Mr. Briggs said. “We can’t argue with the power of money, and investment interest in copper, base metals and commodities generally seems to be on the uptick and not quite peaking yet,” said Randy North, a metals trader at RBC Capital Markets in London.” Click for ARTICLE
- Commodity Price Rally Lacks Real Underpinning
- Andrea Hotter
- The Wall Street Journal
- August 17, 2009
There you have it from the horse’s mouth: (1) money flows are driving prices higher (2) we can’t say that because that would encourage regulators to crack down (3) we make up a fundamental story that we don’t even believe. Do you think the FSA reads the Wall Street Journal Europe? How about WSJ writer Liam Denning (who keeps saying I see no speculation, I hear no speculation) does he read the WSJ Europe?
$1 Million Signing Bonuses For Commodities Traders
“Wall Street firms are again recruiting commodities traders with promises of $1 million bonuses as prices of raw materials from oil to copper double.
Less than a year after oil tumbled a record 54 percent and the Reuters/Jefferies CRB Index was suffering its biggest drop ever, Bank of America Corp. plans to boost commodity headcount by 25 percent. London-based Barclays Plc will increase staff about 6 percent. Morgan Stanley is recruiting traders in shipping.” Click for ARTICLE
- Commodity Traders’ $1 Million Bonus as Oil Doubles (Update2)
- Chanyaporn Chanjaroen and Lars Paulsson
- Bloomberg
- August 17, 2009
Not only are banks refusing to reform their ways but they are doubling down. Wherever there is money to be made they are going to press the pedal to the metal.
Great to see Bank of America taking our TARP money and paying $1 million bonuses to commodity traders to drive up food and energy prices for everyday Americans!
UPDATE: SocGen on hiring spree to increase headcount by 35% and double the size of their commodities businesses. Click for ARTICLE
Hank Paulson Caught In Ethics Quagmire Regarding Preferential Treatment of Goldman Sachs
“These people said Mr. Paulson played a major role in the A.I.G. rescue discussions over that weekend and that it was well known among the participants that a loan to A.I.G. would be used to pay Goldman and the insurer’s other trading partners.
Over that weekend, according to a former senior government official involved in the discussions, Mr. Paulson said that he had been warned by lawyers for the Treasury Department not to contact Goldman executives directly. But he said Mr. Paulson told him he had disregarded the advice because the “crisis” required action. . . .
All told, from Sept. 16 to Sept. 21, 2008, Mr. Paulson and Mr. Blankfein spoke 24 times. . . .
At the height of the financial crisis, Mr. Paulson spoke far more often with Mr. Blankfein than any other executive, according to entries in his calendars. . . .
Moreover, because the schedules include only phone calls made through Mr. Paulson’s office at Treasury, they provide only a partial picture of his communications. They do not reflect calls he made on his cellphone or from his home telephone.” Click for ARTICLE
- Paulson’s Calls to Goldman Tested Ethics
- Gretchen Morgenson and Don Van Natta
- The New York Times
- August 8, 2009
We are not anti-Goldman. We have many friends that worked at Goldman currently or in the past. It is unmistakable however that with the tremendous amount of smoke emanating from Goldman Sachs there must be some sort of fire – even if no witnesses to the fire are willing to come forward.
Goldman Sachs a.k.a. “Tenacious G!”
“This doesn’t sit right with some. “Much of their recent profits seemed to be derived from ‘trading,’ which typically means gambling—not lending,” says Joseph Stiglitz, the Nobel Prize–winning economist who teaches at Columbia University. “It is lending which is required if our economy is to be revived; it was gambling that got our financial system into trouble.”
Even Goldman alumni were struck by the company’s shameless posture in ramping up the leverage again so soon after the government bailouts. “It’s a statement of arrogance,” says one former executive. “What they’re saying by keeping leverage high is, ‘We’re smarter than anybody else.’ ” Click for ARTICLE
- Is Goldman Sach Evil? Or Just Too Good?
- Joe Hagan
- New York Magazine
- July 26, 2009
This is another one of those Michael Lewis-like long pieces that gives great insight into how things work on Wall Street generally and Goldman Sachs specifically. Well worth the investment.
Is it just me or does the title “Tenacious G” conjure up images of Sacha Barron Cohen as a rapper in a 3 piece Brooks Brothers suit.
Gensler Strong On Position Limits
What a breath of fresh air to have a regulator that wants to regulate AND actually understands how markets operate.
Mike vs. Mike: Wall Street’s Arguments Are Even Dumber Than Last Year
This is actually painful to watch.
It was certainly painful for Mark Haines and Erin Burnett.
The guy actually says that money went in and it had a price effect and then goes right back to repeating his soundbite.
Mike Masters Goes To Washington (Again)
Mike Masters testimony in front of CFTC.
Fadel Gheit: “Start Of New Oil Bubble!”
His basic stance is Goldman says $85 per barrel and since they’re the largest oil trader that’s where we’re going.