Posts tagged 'Goldman Sachs'

Zalando: are the anti-psychotics actually kicking in?

Study this chart carefully. It’s the first day of dealings in Zalander, the Frankfurt-listed online frock shop that claims to be Europe’s biggest.

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23 years later…

The American Life radio show and the Pro Publica investigative journalism service set an interesting debate a-blaze last week, detailing the 46 hours of secret recordings undertaken by Carmen Segarra, a specialist hired (and subsequently fired) by the New York Fed.

The recordings have painted a vivid picture of regulatory dithering in the face of a rapacious Goldman Sachs as the bank sought to gain clearance for a share warehousing operation that would allow Spain’s Santander to sidestep European capital requirements.

Subsequent criticism has centred on the NY Fed’s apparent impotence in the face of Wall Street muscle. But is it more the case that Matt Taibbi has been right all along? Does the bank actively help clients dodge (if not break) the rules?

Let’s examine a largely forgotten example of Goldman’s past behaviour in London… Read more

46 hours later…

Some drivetime financial radio for Friday. Click to download or stream:

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Tesco’s off-balance sheet wheeze, courtesy of Goldman Sachs

This is not new, but bears revisiting, given recent events.

Between 2009 and 2013, as part of its sale and leaseback plan, Tesco used a series of six special purpose vehicles to issue close to £4bn worth of property bonds. Structured with the help of Goldman Sachs, the programme even won Tesco an award — Risk Magazine’s 2010 Corporate risk manager of the year.

But Nigel Stevenson, a former M&A banker at Kleinworts who now runs his own research shop, reckons the effect of this off-balance sheet financing has been to artificially reduce Tesco’s net debt by around £2bn.  Read more

How to spend it: ECB bond-buying edition

Securitisation has gotten a bad rap thanks to its association with dodgy underwriting during the bubble. Yet bundling loans originated by banks and selling them to investors in the capital markets could be just what is needed to boost the flagging euro area economy.

This helps explains the European Central Bank’s recent announcement that it will be shopping for asset-backed securities (including mortgage bonds) and covered bonds starting in October. Read more

Goldman’s Symphony of Babble


… And they said, Go to, let us build us a city and a tower, whose top may reach unto heaven; and let us make us a name, lest we be scattered abroad upon the face of the whole earth.

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Here, take your cash. We don’t want it

From Goldman on the state of European corporate investment… or what happens when a yield hunt meets corporates who are running out of investment ideas:

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Temporisation watch

That uneasy feeling when everything is going well. Is it deserved? Can it last? Should you cash in and go paint watercolours in that studio on the Pembrokeshire coast?

Strategists are not immune, with a summer bout of the temporaries upon us. Goldman is the latest, downgrading its view of stocks over the weekend but without really committing to it:

We also downgrade equities to neutral over 3 months. We are concerned that a sell-off in government bonds will lead to a temporary sell-off in equities in line with what we saw last summer, though the magnitude is likely to be smaller as the need for bond yields to correct is lower than it was back then.

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Negative is normal

One day, maybe, companies in Europe will stun those paid to forecast these sort of things with an explosion of profitability. The gusher of earnings will arrive to justify the steady rise in the valuations of companies expected to produce them.

For now though, the story is the same as it has been since 2010: negative revisions. According to the strategy team at Goldman Sachs, what had been hoped for this year was 13 per cent growth in profits, but six months in that has dropped to 7 per cent with the cuts broad based. Actual growth in reported earnings was 1.5 per cent in the first quarter, compared to that which preceded it.

There is hope, or at least explanation, however. It was ever thus: Read more

So, you thought London house prices were barmy…

Goldman Sachs has had a look attempts to lean against house price cycles by central banks, in 20 OECD countries from 1990 to 2012, to see what effect they have had.

More on that below, but first a striking chart of post-Great Recession house price trends (from the first quarter of 2009 to now):

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Home is where the money is

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Can we have our bags back?

Here’s the Ocado mission statement:

To revolutionise the way people shop forever, by giving them a uniquely innovative and greener alternative to traditional grocery shopping.

At the 13-year mark, the revolution has not yet found room for profits, however.

With a torrent of new stock on the way this year attached to the latest round of hot initial public offerings (DFS, Zalando, Game, B&M Bargains…) with ebullient forecasts, it might be helpful to go back over Ocado’s history, and compare and contrast the hope with reality. Read more

Bonus envy? Blame Frederic W Cook & Co, perhaps

No, we hadn’t heard of this remuneration consultant either. But Sarah Butcher over at eFinancial Careers alerts us to the fact that Cook & Co advised on designated “risk takers” at Citibank Global Markets trousering an average basic salary of £507k in 2012.

Stock and cash bonuses took average total remuneration for these staff to £2.34m in this particular Citi division. Read more

Off-market aluminium storage is in full carry

Bored with zero interest in the bank? Why don’t you check out the latest in aluminium-backed deposit accounts? You take the excess aluminium off our hands, we sell it forward, and hey presto you get interest rates conventional banks just can’t beat!

(It’s the way the gold market has been compensating for its oversupply for generations.) (Terms and conditions apply.)

All of which is another way of saying the world’s aluminium oversupply burden has created some excellent carry opportunities in the off-market storage space over the last few years. Read more

Zero mappa mundi

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Goldman’s not-so-great currency caper

Alternate title – Did Goldman Sachs lose $1.3bn in currency trades in the third quarter, or not? Read more

India, still definitely not China, but investment showing at least some flutters of life

A few charts and some commentary plucked from a rather bullish note on India from Goldman’s Asia Pacific team:

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Breathless, branchless banking, Russian style

We should welcome TCS Group Holding to London — the latest Russian firm to take advantage of our attractive Global Depository Receipts regime, which allows a company to describe itself as “London listed” without adhering to all those tiresome governance codes and disclosures that come with a regular full listing.

TCS — better known as Tinkoff Credit Systems or simply TCS Bank — is the creation of Oleg Tinkov, who sounds like a lively chap. He made his first fortune by taking Russian brewing upmarket, before selling out to Inbev in 2005 and then moving into retail financial services in earnest. Read more

Midnight Madness is expanding, practice your lateral thinking here

Midnight Madness, that Goldman Sachs-led all-night lavish scavenger hunt/puzzle-solving competition/performance art so wonderfully described by Quartz earlier this year, is back and expanding. This year the charitable event will include Citigroup, Credit Suisse, BlueMountain, and Secor Asset Management all fielding teams to compete against Goldman.

Below you can see the pitchbook that was sent to potential participants (in typical banking style) earlier this year: Read more

Next stop, dishwashers

Okay, don’t just think ‘Oh, Goldman are trying to wring a few last drops of revenue from the EM story…”

Instead, click to enlarge. Read more

Boron Group Metals pricing update

Rio Tinto’s problems with its aluminium business are well documented.

But things could have been worse without all that warehousing shenanigans from Goldman et al. Read more

Price discovery, sending Goldman Sachs a message edition

How much would you pay to make Goldman Sachs feel slightly uncomfortable?

The City of Oakland, California plans to dish out $226,378. Read more

Wanted at Goldman Sachs: Compliance person with aversion to French, fabulousness

Spotted on the Goldman Sachs careers website…

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Don’t mention the R word

That’s recession and the merest hint of the word sends Australian policymakers in to paroxysms of anger.

For example, here’s David Gruen (the Treasury’s chief macroeconomist) speaking before a Senate hearing last week.

From the Sydney Morning HeraldRead more

The Aussie dollar – from south pacific peso to southern Swiss franc and back again

The pain goes on for the currency dubbed until recently the southern Swiss Franc

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A Greek bond raid

We are not quite sure what is going on here.

Japonica Partners, a self-styled “entrepreneurial co-investment firm” based in Providence, Rhode Island, has launched a tender offer for almost 10 per cent of all Greek government bonds in circulation.

It’s ready to buy paper worth €2.9bn at par, paying a minimum of 45 per cent of face value. Read more

The 2 per cent

Goldman Sachs has hired 350 investment banking summer interns out of 17,000 applications, claiming it has “no problem” attracting talent six years after the financial crisis sparked a series of deep cuts to Wall Street jobs and bonuses.

That’s from the FT’s Tracy Alloway. Read more

All up in Bloomberg’s broker-dealer business

The world is becoming intimately acquainted with the technical ins-and-outs of the Bloomberg LP empire.

There is Bloomberg’s bread-and-butter business of selling sophisticated data terminals to thousands of banking, hedge fund and regulatory authorities around the world. There is also the well-respected news wire run by Matt Winkler. Read more

CEO GO – saying sorry the Bloomberg way

Message from the CEO of Bloomberg

Dear Client, Read more

How to snoop on your customers, the Bloomberg way

Here’s a moderately informative activity for a Friday afternoon.

Log on to your Bloomberg terminal. Type UUID <GO> Read more