For a firm that has such powerful access inside governments around the globe, this is quite stunning. Some of the moves these guys are making lead me to believe that they may have an Alfa Romeo parked out front, but they have no idea how to drive with a stick shift.
FT has the latest on the deterioration of Goldman:
The cost of insuring Goldman Sachs’ debt against default has risen to about the level of Morgan Stanley and Citigroup, two less profitable rivals,as Goldman’s regulatory woes take a toll on investors’ confidence and its standing on Wall Street.
The risk ascribed to the bank by the derivatives markets has risen sharply following US regulators’ filing of civil fraud charges against Goldman last month.
The cost of insuring $10m of Goldman’s debt using a five-year credit default swap (CDS) is $162,000 a year, according to Markit, an 80 per cent rise from the level before the charges were announced.
Goldman’s CDSs now trade at the same level as those of Morgan Stanley, which emerged from the financial crisis in worse shape, and just below CDSs on Citi, which had to be bailed out by the US government.
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