Posts Tagged ‘Goldman Sachs’
SGX to launch Asia’s first secretive “dark pool” for institutional players
Xinhua, 12 Aug 2009
SINGAPORE, Aug. 12 (Xinhua) — The first exchange-backed dark pool in Asia will be launched by the Singapore Exchange (SGX) in a joint venture.
According to local TV broadcaster Channel News Asia on Wednesday, SGX will partner Chi-X Global, a global provider of market infrastructure technologies and trading venues, in a joint venture.
A exchange-backed dark pool is a network where transactions made are concealed from the public.
This is a screenshot of Goldman Sachs’ homepage taken today:
Isn’t it odd that Goldman Sachs, an investment bank on Wall Street would care about climate change? Indeed why should they even care about it? The answer would be more apparent if one considers Goldman Sachs’ involvement in cap and trade.
Over the past few weeks (and months), I have been posting a series of rants against Goldman Sachs. Yet at times I wonder if this is overblown and if most of these rumors and whispers about it may have been started and/or encouraged by its major investment banking rivals on Wall Street. Much of this review is due to a spate of news coverage which have probed beneath the surface of these charges and have shown that a number of them are exaggerated to some extent.
It might be wise to review how all the recent chatter about Goldman Sachs started. Here’s an extremely long piece in NY Magazine written by Joe Hagan which would help you do just that, among other fascinating tidbits about how the firm operates and what went on within the firm during the frenzy last Sept 2008. I have compiled below some points to consider when evaluating the stand of the critics.
Update: FT is reporting that Goldman Sachs’ public image has been tarnished since the financial crisis.
Update: Goldman Sachs finally responds, claiming that HFT accounts for less than 1% of its Q1 & Q2 revenue.
Update 2: Paul Krugman wrote an op-ed on this here.
The NYT reported yesterday that Goldman Sachs’ high frequency program trading may have given the bank an unfair competitive leg up over its rivals:
Nearly everyone on Wall Street is wondering how hedge funds and large banks like Goldman Sachs are making so much money so soon after the financial system nearly collapsed. High-frequency trading is one answer.
And when a former Goldman Sachs programmer was accused this month of stealing secret computer codes — software that a federal prosecutor said could “manipulate markets in unfair ways” — it only added to the mystery. Goldman acknowledges that it profits from high-frequency trading, but disputes that it has an unfair advantage.
Yet high-frequency specialists clearly have an edge over typical traders, let alone ordinary investors. The Securities and Exchange Commission says it is examining certain aspects of the strategy.
Update 1st Aug: A friend pointed out to me via a New York Times blog article that the warrants issued by Goldman came with a cancellation feature which automatically voids half of them should Goldman Sachs undertake a successful equity public offering of US$10bn before 31st Dec 2009. So far, they have raised $6bn to date. The warrants are dated to last 10 years and have a strike price of US$122.90 Goldman’s stock is currently trading at $163.30
The article goes on to conclude that in light of this revelation, it’s not unreasonable to suppose that Goldman Sachs may have paid Treasury the full worth of its warrants. I have since relooked the original news sources, HuffPo and FT, and unfortunately neither of them pointed this out.
I haven’t been posting much in the past few days due to work commitments. I finally had time to sit down and write some stuff during this weekend. Anyway…
Goldman Sachs became the first major bank to buy back warrants held by the US Treasury on Wednesday, allowing the group to shake off the last vestige of its participation in the government bail-out programme after just nine months.
Goldman paid $1,1bn to the US Treasury to buy back the warrants. which were granted as part of the government’s $10bn investment of troubled asset relief programme funds in the bank last year.
Glenn Beck of Fox News explains the web of relationships Goldman Sachs has with the rest of Wall Street and the federal government. I don’t like Fox News, but I find myself disliking Goldman Sachs more with each passing week.
P.S. I first saw this on Lucky Tan’s blog.
A day after Goldman Sachs reported record profits, JP Morgan declared a US$2.7 bn profit:
The bank’s second-quarter profit rose 36% from a year earlier and 27% from the previous quarter, to $2.7 billion. Investment banking fees, up 29% from a year earlier and 62% from the first quarter to $2.2 billion, were a “record for any investment bank in any quarter,” Chief Financial Officer Michael Cavanagh said during a conference call with reporters. Investment banking profit smashed analysts’ expectations, just as fellow Wall Street titan Goldman Sachs Group Inc. did Tuesday.
Now the question is, if giant investment banks on Wall Street have been doing so well last quarter, why hasn’t the American economy picked up?