Ward on Words

Guess what! After news reports focused attention on the company's unnecessary hoarding practices of metal, Goldman Sachs now pledges a way to make the delays disappear. The news is too late for at least one institution that decided to change a key business practice due to the recent high costs of metal.   I wonder how this will change Goldman's strategic outlook on metals. Perhaps metals are not so lucrative now that the artificial shortage is alleviated?   Metals are not the only market Goldman likes to manipulate. Goldman's sacrificial lamb has been found liable in the massive CDO fraud case that lost one of its clients $1 billion as the same deal gained another client an equal sum. And there are other recent stories about the damage inflicted by Goldman in other areas:  HuffPo notes Goldman's " predatory pursuit of students " in higher ed Washington Post shares Goldman's " long history of duping clients A blogger discusses Goldman a...

Hindsight, they say, is 20/20 - but who today can say they KNEW last fall that Goldman Sachs would rake in tons of money since becoming a bank holding company? Certainly not me. I absolutely cannot brag about my prescient vision in this matter. I totally believed that when they transformed from high rolling investment bank to boring but regulated bank they'd be scaling down the risk, and thus, the scale of their profits. Here's how Goldman characterized the shift in a press release: “'While accelerated by market sentiment, our decision to be regulated by the Federal Reserve is based on the recognition that such regulation provides its members with full prudential supervision and access to permanent liquidity and funding,' said Lloyd C. Blankfein, Chairman and CEO of Goldman Sachs." I bought the story that regulation would provide "prudential supervision." So did the Wall Street Journal : "With the move, Wall Street as it has long been kn...

Fascinating story about Goldman Sachs in New York Magazine... The magazine's story on our new millennial G-men (no Elliot Ness here!) talks about leverage, layoffs and the firm's "essential" position in the American capital markets. Some key quotes include: On the tarnish now seen on Goldman's gleam: "Ever since the bank crossed paths with U.S. taxpayers, getting saved with at least $10 billion in government aid last year and then parlaying that into $5.1 billion in profits in 2009 (so far), the firm has been seen as the ugly essence of capitalism at its most cynical—by Washington, by the public, by the financial press, even by some of its clients. Stalwart voices of Wall Street like the Financial Times and The Wall Street Journal have criticized the firm’s undue influence on government and its ruthless pursuit of risky profits. Venom is flowing from more unlikely quarters as well: A recent Rolling Stone article called Goldman “a great vampire squid w...

Apparently the fabulous profits "earned" by Goldman Sachs this quarter aren't quite enough for the investment banking firm. According to this story by Allan Sloan in the Washington Post, they're haggling with Treasury over the price of the stock purchase warrants it gave the feds last fall. Not in the economic biz, so I'll let Sloan explain the warrants: "The warrants are very valuable, especially with the recent sharp run-up in Goldman's stock price. The warrants carry the right (but not the obligation) to buy 12.2 million Goldman shares at $122.90 each. Goldman's closing price of $160.03 on Monday put the warrants "in the money" by a bit more than $450 million. (That's the $37.13 difference between $160.03 and $122.90, multiplied by 12.2 million.) Given that the warrants still have more than nine years to run, they're clearly worth more than $450 million because their owner has years of upside. However, because there'...