Mammon - W21st NYC on Diigo

12 Dec 09

22 Nov 09

Editorial - Goldman’s Non-Apology - NYTimes.com

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Goldman casts crumbs cap v cap one year later Mammon

Even if he had said, “we’re sorry,” it would have been hollow since he never actually said what he was sorry for (“things” doesn’t cut it) or to whom he was apologizing.
So, here’s a thought: A multibillion-dollar gift to the federal Bureau of the Public Debt, which accepts tax-deductible donations to reduce the national debt. The donation can come from the bonuses; that way, it would not harm shareholders, because they only get their cut after the bonuses are paid. Goldman’s tax savings from the donation could help finance the small-business initiative.

13 Nov 09

A Short Question For Senior Officials Of The New York Fed « The Baseline Scenario

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carry-trade Mammon Wall Street government cap v cap and the beat goes on one year later

hence the brouhaha over Steven Friedman’s shareholdings.
Goldman is also currently engaged in private equity investments in nonfinancial firms around the world, as seen for example in its recent deal with Geely Automotive Holdings in China (People’s Daily; CNBC). US banks or bank holding companies would not generally be allowed to undertake such transactions - in fact, it is annoyed bankers who have asked me to take this up.
2 more annotations...
- Would someone from the NY Fed kindly explain the precise nature of the waiver that has been granted to Goldman so that it can operate in this fashion?
- In addition, there is the obvious carry trade (borrow cheaply; lend at higher rates) developing from cheap Fed dollar funding to the growing speculative frenzy in emerging markets, particularly China. Are we heading for another speculative bubble that will end up damaging US bank balance sheets and all American taxpayers?

11 Nov 09

Op-Ed Columnist - Virtuous Bankers? Really!?! - NYTimes.com

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Mammon and the beat goes on cap v cap one year later Wall Street government Dowd

Banks, Blankfein explained, are really serving the greater good.
“We help companies to grow by helping them to raise capital,” he said. “Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle. We have a social purpose.”
As many Americans continue to struggle, Goldman, Morgan Stanley and JPMorgan Chase, banks that took government bailout money after throwing the entire world into crisis, have said they will dish out $30 billion in bonuses — up 60 percent from last year.
4 more annotations...
- “The company gave its general counsel, for example, 104,868 stock options and 14,117 shares in December, when the bank’s stock was around $78,” Louise Story wrote for The Times. “Now the bank’s shares have more than doubled in value, making that stock and option award worth nearly $12 million.”
- As one former Goldman banker told Arlidge, the culture there is “completely money-obsessed. ... There’s always room — need — for more. If you are not getting a bigger house or a bigger boat, you’re falling behind. It’s an addiction.”
- No sooner had the Senate Banking Committee Chairman Chris Dodd announced his plan to overhaul financial regulation Tuesday than compensation experts declared it toothless.
- And as far as doing God’s work, I think the bankers who took government money and then gave out obscene bonuses are the same self-interested sorts Jesus threw out of the temple.

10 Nov 09

FT.com / Companies / Banks - Goldman chief defends employees’ pay

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Wall Street chutzpah Mammon cap v cap and the beat goes on one year later N.B.

“I often hear references to higher compensation at Goldman,” said Mr Blankfein. “What people fail to mention is that net income generated per head is a multiple of our peer average. The people of Goldman Sachs are among the most productive in the world.”
Mr Blankfein produced a slide during his presentation showing that Goldman’s pre-tax profit margins, at 29 per cent, were
10 percentage points higher than the average for other financial groups in the Fortune 500 this decade, and higher than in other industries such as energy, healthcare and consumer staples. The average for
Fortune 500 companies was 8 per cent.
1 more annotations...
- According to Goldman’s calculations, since 2000 the bank has paid out 46.7 per cent of its revenues to employees, well below the 52.1 per cent paid by current and former competitors such as Morgan Stanley, Bear Stearns, Lehman Brothers, Merrill Lynch and the investment banking arm of JPMorgan Chase.

09 Nov 09

Windfall Seen as Bank Bonuses Are Paid in Stock - NYTimes.com

www.nytimes.com/...08pay.html - Preview

and the beat goes on cap v cap one year later compensation Mammon windfall bonuses options

Even as Washington tries to rein in Wall Street pay, bankers are likely to make unusually large gains on the stock grants and options they received after shares in their companies fell sharply during the financial meltdown.
Within months, the financial system began to mend — partly with the help of billions of dollars in government aid — and that stock began surging in value. Some of it can be cashed in starting in just a few months.
3 more annotations...
- And so the bonuses Wall Street received last year, billed as paltry at the time, are turning out to be among the most lucrative payouts ever.
- Normal theories about stock compensation and risk-taking may not hold true today, compensation experts say, in large part because of the government’s continued financial support of the industry.
- “Right now the world is set up for these people to take big gambles,” said Kevin J. Murphy, a professor at the University of Southern California who advised the Treasury Department on pay. “The worst part of the asymmetry comes from the too-big-to-fail guarantee” that has been reinforced by the government aid.

06 Nov 09

Uproar as Firms Get Swine-Flu Vaccine - WSJ.com

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inequality' and the beat goes on Mammon H1N1

The vaccine, which is paid for by the government, is being distributed to state and major city health departments, which then decide where to send the doses

31 Oct 09

Anatomy of the Morgan Stanley Panic - WSJ.com

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Mammon Credit Crisis the week that was

27 Oct 09

Goldman Sachs Group Inc. News - The New York Times

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Sachs Goldman Mammon biblio cap v cap one year later

Talking Business - Short Memories at Goldman - NYTimes.com

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and the beat goes on Wall Street compensation cap v cap one year later Mammon

In private, Goldman executives are scornful of the sentiment behind this question. Their view, in essence, is that they should be applauded for being able to pay such big bonuses, because it means their business is successful. People who want them to pay less, they believe, want them to fail.
When I later asked Goldman’s chief spokesman, Lucas van Praag, if Mr. Blankfein was basically saying that he wished he hadn’t taken the TARP money, Mr. van Praag said my interpretation was correct.
16 more annotations...
- But it’s worth taking a moment now to count the various ways Goldman depended on the government’s good will both during and after the crisis. It was a lot more than just the TARP money. In fact, those bonuses that Goldman executives are about to pull down owe a fair amount to us taxpayers. Goldman’s failure to even concede that point is a large part of the reason the firm is under such scrutiny now.
- In a market like this one — with interest rates so low they are practically negligible (which is itself a government policy that greatly aids Goldman Sachs),
- That $10 billion of TARP money meant that Goldman Sachs could free up an additional $10 billion to put to work making money — instead of having to use it to shore up its capital.
- Indeed, when the firm paid back the TARP money last summer, it went out and raised new capital so that it wouldn’t have to reduce the amount it could deploy to make money.
- In addition, early in the crisis, at a time when lending had essentially frozen, the Federal Deposit Insurance Corporation set up an emergency program to guarantee commercial paper loans. Like every other firm, Goldman took advantage of that program, borrowing $28 billion (it has since reduced that amount to $21 billion). Although that program is about to be eliminated, I saw an analysis in The Wall Street Journal recently showing that Goldman was likely to save around $754 million over the life of the guarantee program.
- Then there was the fact that during their moment of maximum vulnerability, the government let Morgan Stanley and Goldman Sachs become bank holding companies — something it had earlier refused to allow Lehman Brothers to do. In practical terms, it wasn’t all that big a deal; it primarily meant the two firms were going to be regulated by the Federal Reserve rather than the Securities and Exchange Commission.
- But in psychological terms, coming at a time when Wall Street was openly questioning whether Morgan and Goldman would be able to survive the panic, it was huge. It meant that the Federal Reserve was standing by the two firms, and it helped calm the storm.
- More? How about the government’s decision to save A.I.G. — and make all the counterparties whole? Although Goldman insists that it had hedged its A.I.G. exposure, a collapse of the firm would have been devastating for the financial system, Goldman very much included. And of course the government wound up paying off all the A.I.G. counterparties at 100 cents on the dollar, which in Goldman’s case amounted to $12.9 billion.
- Then there was the Term Asset-Backed Securities Loan Facility, set up by the Fed, which allowed firms to buy up distressed securities and sell them for a very healthy profit to someone who was part of the TALF program. You don’t think Goldman Sachs did plenty of that? Traders I know say Goldman traders were all over those assets — and made millions trading the securities.
- Finally, there is the biggest benefit of all, a benefit that seems blazingly obvious to just about anybody who doesn’t work at Goldman Sachs. The government will never, ever let it fail. That’s what the events of last fall proved.
- But of all the too-big-to-fail institutions, Goldman is the only one that remains a pure investment bank. It doesn’t make loans to small businesses like Citigroup and JPMorgan Chase, nor does it sell stocks to individuals, like Merrill Lynch and, increasingly, Morgan Stanley.
- Goldman makes its money primarily by taking trading risks, and so long as that is the case, American taxpayers are going to question why they should have to be on the hook if Goldman suddenly runs into serious trouble. And they are going to resent those big bonuses, which their tax dollars helped generate, knowing that those same tax dollars will race to the rescue if Goldman should ever come close to the brink.
- At that Fortune breakfast, Mr. Blankfein noted that for 130 of Goldman’s 140-year existence, the firm was a private partnership.
- Goldman is no longer a private partnership. It is a large, publicly traded company. “But they are still paying themselves like partners — without the risk and personal exposure and accountability that they had when they were a partnership,” said Jesse Brill, a well-known critic of executive compensation practices.
- What other business, after all, pays 50 percent of revenue to its employees in the form of bonuses? What other business knows that it will never have to face bankruptcy, no matter what?
- Still, the premise of the firm — then and now — is that those who contribute to its success should reap the rewards. So let’s add it up: the $12.9 billion in A.I.G. help, the $10 billion in TARP, the F.D.I.C. guarantee program, the easy money trading distressed securities into the TALF program. I can’t say for sure how much of the $16 billion the firm has set aside for bonuses can be attributed to government assistance of one form or another. But it’s got to be a fairly substantial amount — at least $2 billion or $3 billion.

23 Oct 09

FT.com / US / Economy & Fed - Fed pay rules to rein in risk-taking

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risktaking one year later cap v cap Mammon

But the Fed did not support a standard benchmark for the proportion of bonuses that should be deferred, in line with a proposal adopted by many European nations – raising fears over an uneven playing field between US and European banks.
However, firms will be free to chose from a menu of practices to align compensation with risk, as well as income for different groups of employees, with no one-size-fits-all rule. Smaller banks will have to meet the same standard but with lighter touch supervision.
1 more annotations...
- The Fed did not adopt the approach put forward last month by the Financial Stability Board, the international standards body, in a report endorsed by the G20 leaders.
  The FSB recommended that for executives whose actions have a material impact on the firm’s risk profile, about 40-60 per cent of their bonuses should be deferred and paid over a number of years.

FT.com / Markets / Insight - Rally fuelled by cheap money brings a sense of foreboding

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Tett foreboding one year later cap v cap Mammon and the beat goes on

Earlier this month, I received a sobering e-mail from a senior, recently-retired banker. This particular man, a veteran of the credit world, had just chatted with ex-colleagues who are still in the markets – and was feeling deeply shocked.
“Oh, I am sure the banks’ public relations people will talk about the subdued atmosphere in banking, but don’t you believe it,” he continued bitterly, noting that when money is virtually free – or, at least, at 0.5 per cent – traders feel stupid if they don’t leverage up.
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- “Any sense of control is being chucked out of the window. After the dotcom boom and bust it took a good few years for the market to get its collective mojo back [but] this time it has taken just a few months,” he added. He finished with a despairing question: “Was October 2008 just a dress rehearsal for the crash when this latest bubble bursts?”
- Now despair and panic have been replaced not simply by relief – but, in some quarters, euphoria. Never mind the high-profile rally that has occurred in the equity markets; what is perhaps most stunning is the less visible rebound in debt and derivatives markets, as risk assets have displayed what Barclays describes as a “stellar performance”.
- publicly-traded real estate markets (the EPRA index) have soared some 70 per cent,
- Instead, the real trigger is the amount of money that central bankers have poured into the system that is frantically seeking a home, because most banks simply do not want to use that cash to make loans. Hence, the fact that the prices of almost all risk assets are rallying – even as non-risky assets such as Treasuries bounce too
- After all, much of the current economic rebound seems to reflect stimulus packages (and flattering year-on-year comparisons) that will end next year.
- Meanwhile, the securitisation sector could yet deliver another credit shock next year, since that is the one part of the financial system that has not started working yet

The Cayman Islands Consider a Heretical Idea, Collecting Taxes - NYTimes.com

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heretical tax havens exposed off-shore accounts Caymans Mammon cap v cap capitalism's paradoxes one year later

The Caymans have built their prosperity less on tourism, like most other Caribbean islands, and more on serving as a tax-free home for 9,253 hedge funds and many more banks and companies that pay small fees to establish the Caymans as their official domicile while operating mostly elsewhere around the world.
“The U.K. has to be practical,” he said, warning that too bold a new tax program could prompt Cayman-based financial firms to leave. “They don’t want me to go belly up.”
2 more annotations...
- He points to the low $3,000 annual fee that multibillion-dollar hedge funds pay to register here (even Mr. Bush calls this figure “ridiculously low”), and proposes a tiny tax on the trillions of dollars that he says flow in and out of the island on a daily basis.
- But wouldn’t that cause wealthy people to move their money elsewhere?

22 Oct 09

Public must learn to 'tolerate the inequality' of bonuses, says Goldman Sachs vice-chairman Lord Griffiths | Business | guardian.co.uk

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Mammon Wall Street chutzpah UK inequality' and the beat goes on cap v cap one year later

In remarks that will fuel the row around excessive pay, Lord Griffiths, vice-chairman of Goldman Sachs International and a former adviser to Margaret Thatcher, said banks should not be ashamed of rewarding their staff.
Goldman Sachs is currently on track to pay the biggest ever bonuses to its 31,700 employees after raking in profits at a rate of $35m (£21m) a day.
1 more annotations...
- The chairman of the Financial Services Authority (FSA), Lord Turner, who was also present at the meeting, called once again for a global tax on financial transactions. He said that such a so-called "Tobin tax" could redistribute bank profits to help fight world poverty and climate change.
  "The role of regulation is to bring a concordance between private actions and beneficial results," he said.

19 Oct 09

FT.com / Companies / Banks - Barclays chief warns on regulation

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Mammon regulation and the beat goes on one year later barclays cap v cap

The chairman of Barclays has warned that Britain’s banks will be damaged if regulators are too rigorous in their implementation of a global crackdown on bonuses and capital requirements while other nations, such as the US, are lax.

Goldman and the Economy | Mother Jones

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and the beat goes on Mammon cap v cap one year later

In other words, even more than usual, Goldman is a hedge fund with a smallish investment bank tacked onto the side. They made better bets than the other guys, but the kind of business that would indicate a recovering economy is still very much in the tank.

16 Oct 09

FT.com / Companies / Financial Services - Six charged in $20m insider trade case

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fraud Mammon one year later hedge funds

FT.com / Companies / Banks - Public anger to rein in top Goldman bonuses

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and the beat goes on one year later Mammon cap v cap TARP

Mr Viniar said bonuses this year would be higher than in 2008, when Goldman received $10bn under the US government’s troubled asset relief programme
In the UK, Lord Mandelson, business secretary, said the government would press the Financial Services Authority to prevent a return to the culture of excessive bonuses. If banks, such as Goldman Sachs, paid out big bonuses this year it would mark “an unacceptable return to the sort of practices that got banks into so much trouble in the past”,

15 Oct 09

In Bank Earnings, a Reshaping of Wall Street - NYTimes.com

www.nytimes.com/...16bank.html - Preview

and the beat goes on Mammon wealth transfer to private sector cap v cap one year later

Earnings results from two financial behemoths underscored the new order taking shape on Wall Street, as its strongest banks post huge profits while other once-mighty players continue to strain under losses from souring loans.
Earnings at both beat expectations, but they also highlighted the political and financial obstacles now facing each bank.
5 more annotations...
- After including the items, the loss to stockholders was 27 cents a share, or $3.2 billion, compared with a loss of 61 cents a share, or $2.9 billion, in the third quarter a year ago.
- Goldman also disclosed how much it had set aside for its annual bonus pool. It said that it had earmarked $5.35 billion in compensation and benefits, an increase of 84 percent from the year earlier period, putting it on course for a record payout to its executives by the end of 2009.
- All the while, he is trying to find a way to repay part the $45 billion in federal aid and get out from under the government’s thumb.
- Both banks now have loss reserves of over 5 percent of their loan portfolios.
- the bank suffered a $1.7 billion hit to its revenue from an another adjustment, due to the narrowing credit spreads from perceived improvement in those financial stability.

FT.com / US & Canada - Geithner aides made millions on Wall Street

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and the beat goes on Mammon chutzpah lobbying cap v cap one year later coin operated government geithner Obama-Wall Street sleight of hand

Obama administration officials now working on fixing and regulating the financial system were beneficiaries of several million dollars in pay from Wall Street and private equity companies, it has been revealed.
Financial disclosure forms show that prior to joining the government, Gene Sperling, a senior Treasury adviser, was paid $887,727 by Goldman Sachs and $158,000 for speeches to companies that included Stanford Group, the company run by Sir Allen Stanford, who has since been charged with fraud.
4 more annotations...
- The forms, which were first obtained by Bloomberg, showed that Matthew Kabaker, another adviser in the Treasury, earned $5.8m at Blackstone, the private equity firm, in the two years before joining the administration to work on plans to support banks and spur lending. Much of the compensation was in stock.
- Lewis Alexander, another adviser, was chief economist to Citigroup before joining the administration; he was paid $2.4m in the last two years.
- Even though some of the officials whose previous salaries were disclosed are senior, many were appointed as “counselors”, meaning they escaped Senate confirmation hearings which could have highlighted their past remuneration and employment at a time of heightened animosity towards the financial industry.
- Previous releases of disclosure forms revealed the $5.2m paid to Lawrence Summers, chief economic adviser to the White House, by DE Shaw, the hedge fund, in the two years before he joined the administration.

W21st NYC's Library tagged Mammon → View Popular

FT.com | Money Supply | A windfall tax in the US?

Editorial - Goldman’s Non-Apology - NYTimes.com

A Short Question For Senior Officials Of The New York Fed « The Baseline Scenario

Op-Ed Columnist - Virtuous Bankers? Really!?! - NYTimes.com

FT.com / Companies / Banks - Goldman chief defends employees’ pay

Windfall Seen as Bank Bonuses Are Paid in Stock - NYTimes.com

Uproar as Firms Get Swine-Flu Vaccine - WSJ.com

Anatomy of the Morgan Stanley Panic - WSJ.com

Goldman Sachs Group Inc. News - The New York Times

Talking Business - Short Memories at Goldman - NYTimes.com

FT.com / US / Economy & Fed - Fed pay rules to rein in risk-taking

FT.com / Markets / Insight - Rally fuelled by cheap money brings a sense of foreboding

The Cayman Islands Consider a Heretical Idea, Collecting Taxes - NYTimes.com

Public must learn to 'tolerate the inequality' of bonuses, says Goldman Sachs vice-chairman Lord Griffiths | Business | guardian.co.uk

FT.com / Companies / Banks - Barclays chief warns on regulation

Goldman and the Economy | Mother Jones

FT.com / Companies / Financial Services - Six charged in $20m insider trade case

FT.com / Companies / Banks - Public anger to rein in top Goldman bonuses

In Bank Earnings, a Reshaping of Wall Street - NYTimes.com

FT.com / US & Canada - Geithner aides made millions on Wall Street

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