THE WORLD`S MONEY SYSTEM
GOLDMAN SACHS RULES
THE WORLD.
By Søren Nielsen May 17.05.2017
Banks - Gold - Money.
What do you mean by "real" money. It means that each country in the world should have a gold stock that corresponds to their money in circulation, so their currency had the dignity on the banknote because it had "backup" through the country's gold reserves.
But all that changes in Bretton Woods in 1944, when England and the United States an agreement with the US pegged the pound to the U.S. dollar. This rate was maintained through the Second World War and became part of the Bretton Woods system which governed post-war exchange rates. Under continuing economic pressure, and despite months of denials that it would do so, on 19 September 1949 the government devalued the pound by 30.5% to $2.80. The move prompted several other currencies to be devalued against the dollar.
England and the United States negotiate how to governed the worlds economy and the world Monetary system, and come up with the IMF (The International Monetary Fund) and The world bank and series of other serious institutions to manage the global currency. And there was still a gold standard, but this gold standard should be tied to the dollar.
The whole world's gold had moved from London to Fort Knock, and the whole world's currency was tied to the dollar. The system was designed to manage the sorts of imbalances, to avoid, credit crunches or for countries, credit crunches are known as balance of trade deficits, i.e. when they can`t pay their bills and their currency collapses.
The corrency were managed and the system was stabel, as long as the Americans played the role of oversight. But all that came to an end.
The quantity of money that was needed to pay for The Vietnam War and Olie shocks, That meant that the Americans were on longer respecting ther role or playing their role governing the monetary system. They were inflating the value of their own currency that ostensibly was meant to be tied, tied to gold and to every other currency. So what did the French do?
The French were a little bit worried that President Nixon wasn`t entirely honest. And thery were worried that precisely what we described, that Nixon was printing money when he shouldn`t have been, was going on. And they were worried there wasn`t enough gold to honour the exchange rate of the French Franc, so they sent a gunboat to New York harbour to ever so politely ask for our gold back, please. Did they get their gold back? No, they didn`t
And the Bretton Woods system came to an end. And this is the point at which we enter the modern era of the financial system.
The whole world's gold had moved from London to Fort Knock, and the whole world's currency was tied to the dollar. The system was designed to manage the sorts of imbalances, to avoid, credit crunches or for countries, credit crunches are known as balance of trade deficits, i.e. when they can`t pay their bills and their currency collapses.
The corrency were managed and the system was stabel, as long as the Americans played the role of oversight. But all that came to an end.
The quantity of money that was needed to pay for The Vietnam War and Olie shocks, That meant that the Americans were on longer respecting ther role or playing their role governing the monetary system. They were inflating the value of their own currency that ostensibly was meant to be tied, tied to gold and to every other currency. So what did the French do?
The French were a little bit worried that President Nixon wasn`t entirely honest. And thery were worried that precisely what we described, that Nixon was printing money when he shouldn`t have been, was going on. And they were worried there wasn`t enough gold to honour the exchange rate of the French Franc, so they sent a gunboat to New York harbour to ever so politely ask for our gold back, please. Did they get their gold back? No, they didn`t
And the Bretton Woods system came to an end. And this is the point at which we enter the modern era of the financial system.
Gold standard.
Bank of England notes were legal tender and their value floated relative to gold. The Bank also issued silver tokens to alleviate the shortage of silver coins. In 1816, the gold standard was adopted officially, with the silver standard reduced to 66 shillings (66/-, £3 6s), rendering silver coins a "token" issue ( not containing their value in precious metal).
The gold standard was suspended at the outbreak of the war in 1914, with Bank of England and Treasury notes becoming legal tender. Prior to World War I, the United Kingdom had one of the world's strongest economies, holding 40% of the world's overseas investments. However, after the end of the war, the country was indebted. Britain owed £850 million (£37.3 billion as of 2015), mostly to the United States, with interest costing the country some 40% of all government spending. In an attempt to resume stability, a variation on the gold standard was reintroduced in 1925, under which the currency was fixed to gold at its pre-war peg, although people were only able to exchange their currency for gold bullion, rather than for coins. This was abandoned on 21 September 1931, during the Great Depression, and sterling suffered an initial devaluation of some 25%.
Banknotes.
The first sterling notes were issued by the Bank of England shortly after its foundation in 1694. The Bank of Scotland began issuing notes in 1695. With the extension of sterling to Ireland in 1825.
The £5 polymer banknote, issued by Northern Bank (now Danske Bank) in 2000, was the only polymer note in circulation until 2016, although Danske Bank also produces paper-based £10, £20 and £50 notes. The Bank of England introduced £5 polymer banknotes in September 2016.
Who and what control the world's money.
Fiat Money: A medium of exchange, which the issuer does not promise to reedem in a commodity, and is based on confidence.
Historically, money creation was pegged to a commodity, often gold, buy today it is pegged to nothing. Which means there is nothing backing our money. The piece of paper, is just a piece of paper. Where does this leave us? If money is based on nothing, why do we think it has any value? Because we can still go and exchange it. Great little Latin fact, the word for credit comes from? Belief. "Credere = To believe"
Since the collapse of the dollar gold standard in 1971 and the deregulation of the financial system, money creation has grown exponentially. The World Economic Forum meeting in Davos at the present time have called on a need for the credit within the economy, The Global Economy, to be expanded by 100 trillion dollars.
They believe this credit expanison will create a boom because there is now more money in the economy with which to make investments.
It`s fascinating this emergence of digital currencies, how it`s transformed everything. Because, it just completely unleashed private banks to dominate and create the money system that works for them and works for the people who run private bank`s.
Banks and houses.
In the seven years between years 2000 and 2007 the money supply doubled and the central bank, was under the impression at this time they had it under control, because they were saying that prices weren`t going up that much. Of course they were looking at prices in your local corner shop. They weren`t looking at the prices of housing and the housing is the biggest expenditure that most people will make.
Increasing the house prices, it may make you feel like you`re becoming wealthier, but as you`r wealth increasing, the effect that your children`s wealth is actually decreasing
So in fact there is no net gain in wealth becourse your children are going to pay even more when they want to buy a house. So in effect there is no net increase. They are going to have to earn even more. They are going to have to go into even more debt. So rising house prices do not create additonal net GDP value to the economy. Actually what they do is, they redistribute wealth towards those people who already have houses, and remove it from poorer people who can`t afford to get on the housing ladder. It`s not helping the public deficit. it a zero sum game.
Houses are both a necessity and a luxury. And because of that, they are an ideal vehicle for money and bobble creation. There is nothing special about houses. It was just all this funny money being pumped into that market.
As of August 2011, 85,5 % of consumer bank lending was secured as mortgages on dwellings.
The main cause for the housing boom, is the huge amount of speculative credit created by the banks to go into houses.
Decrease in the standard of living.
The figures for Denmark are quite stark actually. The average median real incomes for most people declined over the last 8 years. They are now in quite sharp decline as we go into recession. - The shapest really since about the 1930s - so real income is declining.
People are getting poorer in real terms. It`s becouse prices are always going up, becouse all this new funny money is being pumped into the system by the banks and they`re creating it all as debt so at the same time as prices are going up and things are getting more expensive, we`re getting further and further into debt and our wealth and the return that we get from actually working is getting less and less all the time.
The government cannot allow the banking system to fail, because if it did, over 97 % of all money would disappear. This is why in the event of a crisis, the risk is transferred to the taxpayer. Banks receive large safety net from the government. This is the government response to the bank bail outs and is necessary in a debt based monetary system, where increased purchasing power is the result of growing debt and where a diversification of debt provides overall stability and market confidence.
Policies such as student fee increased and the privatisation of public services asset and industry follow the same model. Homeowners for example who will fall into negative equity, if interest rates go up even 1 - 2 percent, there will be really big problems.
As more of the country`s resources and industries are privatised, the private sector takes on more debt. As a result more money is created and there is a boom. When the money supply increases, more money is availabel for productive aktivities and consumption, which is the condition for a boom.
Fixing the Monetary System.
By fixing the monetary system we can prevent the bank from ever causing another financial crisis and we can also make the current public service cuts and the tax rises and the increase in national debt unnecessary.
The current monetary system allows the banking sector to extract wealth from the economy whilst providing nothing productive in return. So a growing banking sector is not a good thing. If the banking sector is growing, it`s either that it`s becoming less efficient or it`s becoming a parasite on the rest of the economy.
Goldman Sachs, what to do?
The way in which you can look across Europe now and see that
The new Prime minister of Greece, notelected, essentially imposed, Papademos, -former employee of Goldman Sachs.
The new Prime minister of Italy, - Mario Monti - former employee of Goldman Sachs.
The new president of the European Central Bank, former employee of Goldman Sachs. You see this people popping up absolutely everywhere.
In 1994.
Goldman financed Rockefeller Center in a deal that allowed it to take an ownership interest in 1996, and sold Rockefeller Center to Tishman Speyer in 2000.
In April 1997.
Goldman Sachs was lead underwriter of the Yahoo! IPO. In 1998 it was the co-lead manager of the 2 trillion yen NTT DoCoMo IPO.
In 1999.
Goldman Sachs acquired Hull Trading Company, one of the world's premier market-making firms, for $531 million.
Goldman Sachs purchased Spear, Leeds, & Kellogg, one of the largest specialist firms on the New York Stock Exchange, for $6.3 billion in September 2000.
In January 2000.
Goldman Sachs, along with Lehman Brothers, was the lead manager for the first internet bond offering for the World Bank.
In 2003.
The firm took a 45% stake in a joint venture with JBWere, the Australian investment bank.
In May 2006
Paulson left the firm to serve as United States Secretary of the Treasury, and Lloyd C. Blankfein was promoted to Chairman and Chief Executive Officer.
In January 2007.
Goldman Sachs, along with CanWest Global Communications, acquired Alliance Atlantis, the company with the broadcast rights to the CSI franchise.
2007–2008 subprime mortgage crisis.
During the 2007 subprime mortgage crisis, Goldman Sachs was able to profit from the collapse in subprime mortgage bonds in the summer of 2007 by short-selling subprime mortgage-backed securities. Two Goldman traders, Michael Swenson and Josh Birnbaum, are credited with being responsible for the firm's large profits during the crisis. The pair, members of Goldman's structured products group in New York, made a profit of $4 billion by "betting" on a collapse in the sub-prime market and shorting mortgage-related securities.
In September 2013.
Goldman Sachs Asset Management announced it had entered into an agreement with Deutsche Asset & Wealth Management to acquire its stable value business, with total assets under supervision of $21.6 billion as of June 30, 2013.
In April 2013.
Together with Deutsche Bank, Goldman led a $17 billion bond offering by Apple Inc., the largest corporate-bond deal in history. Was Apple's first since 1996. Goldman Sachs managed both of Apple's previous bond offerings in the 1990s
Goldman Sachs was the lead underwriter for Twitter's initial public offering in 2013. At the time, Goldman's position as lead underwriter for Twitter was considered "one of the biggest tech prizes around".
Goldman Sachs earned approximately $22.8 million in fees from the Twitter IPO; however, the chief economist and strategist at ZT Wealth said, "Goldman being the first name on the S-1 has little to do with fees".
Goldman Sachs underwrote and managed the Grand Parkway System Toll Revenue Bond for the Houston, Texas area in 2013. The bond was valued at $2.9 billion and was issued to finance the Grand Parkway System which will join suburban communities to major roads
On October 30, 2014.
Goldman Sachs filed a patent application for a virtual currency called SETLCoin.
In August 2015.
Goldman Sachs agreed to acquire General Electric Co.'s GE Capital Bank on-line deposit platform. Terms of the transaction were not disclosed, but the purchase includes US$8-billion of on-line deposits and another US$8-billion of brokered certificates of deposit. The purchase allows Goldman Sachs to access a stable and inexpensive pool of source of funding.
In April 2016.
Goldman Sachs launched a direct bank, GS Bank.
In October 2016.
Goldman Sachs Bank USA started offering no-fee personal loans under the brand Marcus by Goldman Sachs.
On July 15, 2003.
Goldman Sachs, Lehman Brothers and Morgan Stanley were sued for artificially inflating the stock price of RSL Communications by issuing untrue or materially misleading statements in research analyst reports, and paid $3,380,000 for settlement.
Involvement in the European sovereign debt crisis.
Ties between Goldman Sachs and European leadership positions were another source of controversy.
Lucas Papademos, Greece's former prime minister, ran the Central Bank of Greece at the time of the controversial derivatives deals with Goldman Sachs that enabled Greece to hide the size of its debt.
Petros Christodoulou, General Manager of the Greek Public Debt Management Agency is a former employee of Goldman Sachs.
Mario Monti, Italy's former prime minister and finance minister, who headed the new government that took over after Berlusconi's resignation, is an international adviser to Goldman Sachs.
Otmar Issing, former board member of the Bundesbank and the Executive Board of the European Bank also advised Goldman Sachs.
Mario Draghi, head of the European Central Bank, is the former managing director of Goldman Sachs International.
António Borges, Head of the European Department of the International Monetary Fund in 2010–2011 and responsible for most of enterprise privatizations in Portugal since 2011, is the former Vice Chairman of Goldman Sachs International.
Carlos Moedas, a former Goldman Sachs employee, was the Secretary of State to the Prime Minister of Portugal and Director of ESAME, the agency created to monitor and control the implementation of the structural reforms agreed by the government of Portugal and the troika composed of the European Commission, the European Central Bank and the International Monetary Fund.
Peter Sutherland, former Attorney General of Ireland was a non-executive director of Goldman Sachs International.
Stephen Friedman, a former director of Goldman Sachs, was named Chairman of the Federal Reserve Bank of New York in January 2008. Although he had retired from Goldman Sachs in 1994, Friedman continued to own stock in the firm. Goldman's conversion from a securities firm to a bank holding company in September 2008 meant it was now regulated by the Fed and not the SEC.
Insider trading cases.
In 1986.
Goldman Sachs investment banker David Brown pleaded guilty to charges of passing inside information on a takeover deal that eventually was provided to Ivan Boesky. Robert M. Freeman, who was a senior Partner, who was the Head of Risk Arbitrage, and who was a protégé of Robert Rubin, was also convicted of insider trading, for his own account and for the firm's account.
In April 2009.
Goldman Sachs was accused of misleading investors by having "puffed up" its Q1 earnings by creating a December "orphan month" into which it shifted large writedowns, so they did not appear in any "quarterly number".
In April 2009.
The company reported a $780 million net loss for the single month of December alongside Q1 2009 (Jan–Mar) net earnings of $1.81 billion.
On April 22, 2009.
Morgan Stanley reported a $1.3B net loss for the single month of December, alongside a $177M loss for the first quarter (Jan–Mar).
In April 2010
Goldman Sachs director Rajat Gupta was named in an insider-trading case. It was said Rajat Gupta had "tipped off a hedge-fund billionaire".
$60 million settlement for Massachusetts subprime mortgages.
On May 10, 2009.
The Goldman Sachs Group agreed to pay up to $60 million to end an investigation by the Massachusetts attorney general's office into whether the firm helped promote unfair home loans in the state. The settlement will be used to reduce the mortgage payments of 714 Massachusetts residents who had secured subprime mortgages funded by Goldman Sachs. Michael DuVally, a spokesman for Goldman Sachs, said it was "pleased to have resolved this matter," and declined to comment further.
In April 2010
The SEC charged Goldman Sachs and one of its vice-presidents, Fabrice Tourre, with securities fraud. The SEC alleged that Goldman Sachs had told buyers of one of its investment deals (a type called a "synthetic CDO"), that the underlying assets in the deal had been picked by an independent CDO manager, ACA Management. In fact, a short investor betting that the CDO would default (Paulson & Co. hedge fund group) had played a "significant role" in the selection, and the package of securities turned out to become "one of the worst-performing mortgage deals of the housing crisis".
On July 15, 2010.
Goldman Sachs settled, agreeing to pay the SEC and investors US$550 million.
Denmark and Goldman Sachs.
Goldman Sachs's purchase of an 18% stake in state-owned Dong Energy—Denmark's largest electric utility—set off a "political crisis" in Denmark. The sale—approved,
In January 30, 2014
—sparked protest in the form of the resignation of six cabinet ministers and the withdrawal of a party (Socialist People's Party) from Prime Minister Helle Thorning-Schmidt's leftist governing coalition.
According to Bloomberg Businessweek, "the role of Goldman in the deal struck a nerve with the Danish public, which is still suffering from the aftereffects of the global financial crisis." Protesters in Copenhagen gathered around a banner "with a drawing of a vampire squid—the description of Goldman used by Matt Taibbi in Rolling Stone in 2009".
Opponents expressed concern that Goldman Sachs would have some say in Dong's management, and that Goldman Sachs planned to manage its investment through "subsidiaries in Luxembourg, the Cayman Islands, and Delaware, which made Danes suspicious that the bank would shift earnings to tax havens".
They believe this credit expanison will create a boom because there is now more money in the economy with which to make investments.
It`s fascinating this emergence of digital currencies, how it`s transformed everything. Because, it just completely unleashed private banks to dominate and create the money system that works for them and works for the people who run private bank`s.
Banks and houses.
In the seven years between years 2000 and 2007 the money supply doubled and the central bank, was under the impression at this time they had it under control, because they were saying that prices weren`t going up that much. Of course they were looking at prices in your local corner shop. They weren`t looking at the prices of housing and the housing is the biggest expenditure that most people will make.
Increasing the house prices, it may make you feel like you`re becoming wealthier, but as you`r wealth increasing, the effect that your children`s wealth is actually decreasing
So in fact there is no net gain in wealth becourse your children are going to pay even more when they want to buy a house. So in effect there is no net increase. They are going to have to earn even more. They are going to have to go into even more debt. So rising house prices do not create additonal net GDP value to the economy. Actually what they do is, they redistribute wealth towards those people who already have houses, and remove it from poorer people who can`t afford to get on the housing ladder. It`s not helping the public deficit. it a zero sum game.
Houses are both a necessity and a luxury. And because of that, they are an ideal vehicle for money and bobble creation. There is nothing special about houses. It was just all this funny money being pumped into that market.
As of August 2011, 85,5 % of consumer bank lending was secured as mortgages on dwellings.
The main cause for the housing boom, is the huge amount of speculative credit created by the banks to go into houses.
Decrease in the standard of living.
The figures for Denmark are quite stark actually. The average median real incomes for most people declined over the last 8 years. They are now in quite sharp decline as we go into recession. - The shapest really since about the 1930s - so real income is declining.
People are getting poorer in real terms. It`s becouse prices are always going up, becouse all this new funny money is being pumped into the system by the banks and they`re creating it all as debt so at the same time as prices are going up and things are getting more expensive, we`re getting further and further into debt and our wealth and the return that we get from actually working is getting less and less all the time.
The government cannot allow the banking system to fail, because if it did, over 97 % of all money would disappear. This is why in the event of a crisis, the risk is transferred to the taxpayer. Banks receive large safety net from the government. This is the government response to the bank bail outs and is necessary in a debt based monetary system, where increased purchasing power is the result of growing debt and where a diversification of debt provides overall stability and market confidence.
Policies such as student fee increased and the privatisation of public services asset and industry follow the same model. Homeowners for example who will fall into negative equity, if interest rates go up even 1 - 2 percent, there will be really big problems.
As more of the country`s resources and industries are privatised, the private sector takes on more debt. As a result more money is created and there is a boom. When the money supply increases, more money is availabel for productive aktivities and consumption, which is the condition for a boom.
Fixing the Monetary System.
By fixing the monetary system we can prevent the bank from ever causing another financial crisis and we can also make the current public service cuts and the tax rises and the increase in national debt unnecessary.
The current monetary system allows the banking sector to extract wealth from the economy whilst providing nothing productive in return. So a growing banking sector is not a good thing. If the banking sector is growing, it`s either that it`s becoming less efficient or it`s becoming a parasite on the rest of the economy.
Goldman Sachs, what to do?
The way in which you can look across Europe now and see that
The new Prime minister of Greece, notelected, essentially imposed, Papademos, -former employee of Goldman Sachs.
The new Prime minister of Italy, - Mario Monti - former employee of Goldman Sachs.
The new president of the European Central Bank, former employee of Goldman Sachs. You see this people popping up absolutely everywhere.
In 1994.
Goldman financed Rockefeller Center in a deal that allowed it to take an ownership interest in 1996, and sold Rockefeller Center to Tishman Speyer in 2000.
In April 1997.
Goldman Sachs was lead underwriter of the Yahoo! IPO. In 1998 it was the co-lead manager of the 2 trillion yen NTT DoCoMo IPO.
In 1999.
Goldman Sachs acquired Hull Trading Company, one of the world's premier market-making firms, for $531 million.
Goldman Sachs purchased Spear, Leeds, & Kellogg, one of the largest specialist firms on the New York Stock Exchange, for $6.3 billion in September 2000.
In January 2000.
Goldman Sachs, along with Lehman Brothers, was the lead manager for the first internet bond offering for the World Bank.
In 2003.
The firm took a 45% stake in a joint venture with JBWere, the Australian investment bank.
In May 2006
Paulson left the firm to serve as United States Secretary of the Treasury, and Lloyd C. Blankfein was promoted to Chairman and Chief Executive Officer.
In January 2007.
Goldman Sachs, along with CanWest Global Communications, acquired Alliance Atlantis, the company with the broadcast rights to the CSI franchise.
2007–2008 subprime mortgage crisis.
During the 2007 subprime mortgage crisis, Goldman Sachs was able to profit from the collapse in subprime mortgage bonds in the summer of 2007 by short-selling subprime mortgage-backed securities. Two Goldman traders, Michael Swenson and Josh Birnbaum, are credited with being responsible for the firm's large profits during the crisis. The pair, members of Goldman's structured products group in New York, made a profit of $4 billion by "betting" on a collapse in the sub-prime market and shorting mortgage-related securities.
In September 2013.
Goldman Sachs Asset Management announced it had entered into an agreement with Deutsche Asset & Wealth Management to acquire its stable value business, with total assets under supervision of $21.6 billion as of June 30, 2013.
In April 2013.
Together with Deutsche Bank, Goldman led a $17 billion bond offering by Apple Inc., the largest corporate-bond deal in history. Was Apple's first since 1996. Goldman Sachs managed both of Apple's previous bond offerings in the 1990s
Goldman Sachs was the lead underwriter for Twitter's initial public offering in 2013. At the time, Goldman's position as lead underwriter for Twitter was considered "one of the biggest tech prizes around".
Goldman Sachs earned approximately $22.8 million in fees from the Twitter IPO; however, the chief economist and strategist at ZT Wealth said, "Goldman being the first name on the S-1 has little to do with fees".
Goldman Sachs underwrote and managed the Grand Parkway System Toll Revenue Bond for the Houston, Texas area in 2013. The bond was valued at $2.9 billion and was issued to finance the Grand Parkway System which will join suburban communities to major roads
On October 30, 2014.
Goldman Sachs filed a patent application for a virtual currency called SETLCoin.
In August 2015.
Goldman Sachs agreed to acquire General Electric Co.'s GE Capital Bank on-line deposit platform. Terms of the transaction were not disclosed, but the purchase includes US$8-billion of on-line deposits and another US$8-billion of brokered certificates of deposit. The purchase allows Goldman Sachs to access a stable and inexpensive pool of source of funding.
In April 2016.
Goldman Sachs launched a direct bank, GS Bank.
In October 2016.
Goldman Sachs Bank USA started offering no-fee personal loans under the brand Marcus by Goldman Sachs.
On July 15, 2003.
Goldman Sachs, Lehman Brothers and Morgan Stanley were sued for artificially inflating the stock price of RSL Communications by issuing untrue or materially misleading statements in research analyst reports, and paid $3,380,000 for settlement.
Involvement in the European sovereign debt crisis.
Ties between Goldman Sachs and European leadership positions were another source of controversy.
Lucas Papademos, Greece's former prime minister, ran the Central Bank of Greece at the time of the controversial derivatives deals with Goldman Sachs that enabled Greece to hide the size of its debt.
Petros Christodoulou, General Manager of the Greek Public Debt Management Agency is a former employee of Goldman Sachs.
Mario Monti, Italy's former prime minister and finance minister, who headed the new government that took over after Berlusconi's resignation, is an international adviser to Goldman Sachs.
Otmar Issing, former board member of the Bundesbank and the Executive Board of the European Bank also advised Goldman Sachs.
Mario Draghi, head of the European Central Bank, is the former managing director of Goldman Sachs International.
António Borges, Head of the European Department of the International Monetary Fund in 2010–2011 and responsible for most of enterprise privatizations in Portugal since 2011, is the former Vice Chairman of Goldman Sachs International.
Carlos Moedas, a former Goldman Sachs employee, was the Secretary of State to the Prime Minister of Portugal and Director of ESAME, the agency created to monitor and control the implementation of the structural reforms agreed by the government of Portugal and the troika composed of the European Commission, the European Central Bank and the International Monetary Fund.
Peter Sutherland, former Attorney General of Ireland was a non-executive director of Goldman Sachs International.
Stephen Friedman, a former director of Goldman Sachs, was named Chairman of the Federal Reserve Bank of New York in January 2008. Although he had retired from Goldman Sachs in 1994, Friedman continued to own stock in the firm. Goldman's conversion from a securities firm to a bank holding company in September 2008 meant it was now regulated by the Fed and not the SEC.
Insider trading cases.
In 1986.
Goldman Sachs investment banker David Brown pleaded guilty to charges of passing inside information on a takeover deal that eventually was provided to Ivan Boesky. Robert M. Freeman, who was a senior Partner, who was the Head of Risk Arbitrage, and who was a protégé of Robert Rubin, was also convicted of insider trading, for his own account and for the firm's account.
In April 2009.
Goldman Sachs was accused of misleading investors by having "puffed up" its Q1 earnings by creating a December "orphan month" into which it shifted large writedowns, so they did not appear in any "quarterly number".
In April 2009.
The company reported a $780 million net loss for the single month of December alongside Q1 2009 (Jan–Mar) net earnings of $1.81 billion.
On April 22, 2009.
Morgan Stanley reported a $1.3B net loss for the single month of December, alongside a $177M loss for the first quarter (Jan–Mar).
Like Goldman Sachs, Morgan Stanley converted to a bank holding company after the bankruptcy of Lehman Brothers in September 2008.
In April 2010
Goldman Sachs director Rajat Gupta was named in an insider-trading case. It was said Rajat Gupta had "tipped off a hedge-fund billionaire".
$60 million settlement for Massachusetts subprime mortgages.
On May 10, 2009.
The Goldman Sachs Group agreed to pay up to $60 million to end an investigation by the Massachusetts attorney general's office into whether the firm helped promote unfair home loans in the state. The settlement will be used to reduce the mortgage payments of 714 Massachusetts residents who had secured subprime mortgages funded by Goldman Sachs. Michael DuVally, a spokesman for Goldman Sachs, said it was "pleased to have resolved this matter," and declined to comment further.
In April 2010
The SEC charged Goldman Sachs and one of its vice-presidents, Fabrice Tourre, with securities fraud. The SEC alleged that Goldman Sachs had told buyers of one of its investment deals (a type called a "synthetic CDO"), that the underlying assets in the deal had been picked by an independent CDO manager, ACA Management. In fact, a short investor betting that the CDO would default (Paulson & Co. hedge fund group) had played a "significant role" in the selection, and the package of securities turned out to become "one of the worst-performing mortgage deals of the housing crisis".
On July 15, 2010.
Goldman Sachs settled, agreeing to pay the SEC and investors US$550 million.
Denmark and Goldman Sachs.
Goldman Sachs's purchase of an 18% stake in state-owned Dong Energy—Denmark's largest electric utility—set off a "political crisis" in Denmark. The sale—approved,
In January 30, 2014
—sparked protest in the form of the resignation of six cabinet ministers and the withdrawal of a party (Socialist People's Party) from Prime Minister Helle Thorning-Schmidt's leftist governing coalition.
According to Bloomberg Businessweek, "the role of Goldman in the deal struck a nerve with the Danish public, which is still suffering from the aftereffects of the global financial crisis." Protesters in Copenhagen gathered around a banner "with a drawing of a vampire squid—the description of Goldman used by Matt Taibbi in Rolling Stone in 2009".
Opponents expressed concern that Goldman Sachs would have some say in Dong's management, and that Goldman Sachs planned to manage its investment through "subsidiaries in Luxembourg, the Cayman Islands, and Delaware, which made Danes suspicious that the bank would shift earnings to tax havens".
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