Sunday, 1 January 2012
CASE 376 - Goldman sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients on the underground scene, there packaging bad AAA bundles off, betting against local authorities such as police or local councils, then helping them to go bankrupt, either way they win.
Goldman Sachs was founded in 1869 and is headquartered at 200 West Street in the Lower Manhattan area of New York City, with additional offices in major international financial centers. The firm provides mergers and acquisitions advice, underwriting services, asset management, and prime brokerage to its clients, which include corporations, governments and individuals. The firm also engages in proprietary trading and private equity deals, and is a primary dealer in the United States Treasury security market.
Former employees include Robert Rubin and Henry Paulson who served as United States Secretary of the Treasury under Presidents Bill Clinton and George W. Bush, respectively, as well as Mark Carney, the governor of the Bank of Canada since 2008, Mario Draghi, governor of the European Central Bank and Mario Monti, the Italian Prime Minister.
Goldman Sachs announced 1,000 layoffs in July 2011 in an effort to cut expenses up to $1.2 billion.
Zero Hedge is credited with bringing flash trading to public attention in 2009 with a series of posts alleging that Goldman Sachs had access to flash order information, allowing the firm to gain unfair profits. It used New York Stock Exchange (NYSE) data to detect Goldman's flash trading advantage. The blog contends that Goldman Sachs alumni are at the center of a powerful cabal and that the solution is "a purifying market crash that leads to the elimination of the big banks altogether and the reinstatement of genuine free-market capitalism" - "Dow Zero." The blog drew the attention of the mainstream financial media and became a source for reporters. Bloomberg News published stories based on Zero Hedge’s blog posts, such as “Goldman Sachs Loses Grip on Its Doomsday Machine,” by columnist Jonathan Weil. The New York Times ran a front-page story on the high-frequency trading, detailing how it translated into billions of dollars of profit for Goldman Sachs and hedge funds. The NYSE has since made a rule change and no longer releases the data used by Zero Hedge.
Matt Taibbi, author of Griftopia, cites Zero Hedge in the last chapter as accurately assessing the level of corruption in the banking industry and credits its inside advantage. He questions why the mainstream financial media did not earlier detect the corruption at Goldman Sachs. Taibbi writes:
“ Right around that same time, there were three media stories that helped focus a swirl of seriously negative attention on the bank. My piece was one, New York magazine's Joe Hagan wrote another, and the third was a series of stories by a heretofore little-known blogger who went by the nom de plume of "Tyler Durden" on a blog called Zero Hedge.
Durden's blog was written in an impenetrable Wall Street jargon, and the man himself – later outed by nosy reporters as an Eastern European trader who had been sanctioned by FINRA – was intimidating even to Wall Street insiders. "Zero Hedge, man, he makes my head hurt" was a typical comment from my Wall Street sources.
Beginning in early 2009 Durden had been on a jihad about Goldman, having sifted through trading data to make what he insisted was an airtight case proving that the bank's high-frequency or "flash" trading desk was engaged in some sort of large-scale manipulation of the New York Stock Exchange. Durden drew his conclusions by scrupulously analyzing trading data the NYSE released each week. So what happened? Naturally, the NYSE on June 24 changed its rules and stopped releasing the data, seemingly to protect Goldman from Zero Hedge's meddling.