Goodbye Goldman Sachs, Hello JPMorgan Chase

Boy does Goldman's CEO Lloyd Blankfein wish he hopped a train to Washington D.C. last December when President Obama called a sit down.  He instead called in because he couldn't fly in the fog. Many consider that a major diss of President Obama.

Since that time it has been all Jamie "Obama's Favorite Banker" Dimon and his JPMorgan Chase, when it comes to White House favoritism.

Alan Prest at PEU Report emails with the latest on the Dimon takeover of financial influence at the  White House:

I researched Obama's Deficit Commission for connections and found a number to JP Morgan.  As noted before co-chair Erskine Bowles is senior advisor with a private equity firm.  FYI: here.

Also, the chair of Virginia's government restructuring commission is a private equity man, currently with Thayer and formerly of The Carlyle Group:  Here.

The club gets to remake the board to their favor.  Sweet!

The Opening Statement of Lloyd Blankfein at the .....

2010 Goldman Sachs shareholder meeting is now in the EPJ Vault, here.

HOT: Bankster in Panic to Meet with His Controls

The veil is lifted.

The revolution has hit the streets and who do the bankster tools run to? Goldman Sachs CEO Lloyd Blankfein and JPMorgan Chase CEO Jamie Dimon.

In total panic, the European Union’s financial services commissioner, Michel Barnier is in the United States where he is meeting, according to NYT, with:

Federal Reserve chairman, Ben S. Bernanke, and Treasury Secretary Timothy F. Geithner. He will also meet with Wall Street titans like Lloyd C. Blankfein, the chief executive of Goldman Sachs, and Jamie Dimon, the chief executive of JPMorgan Chase.

With the PR skilz of Geithner and Blankfein in the room, the next move by the banksters is likely to have the kids rioting by the end of the month in Disneyland.

WSJ Discusses Life at Goldman after Lloyd Blankfein

When WSJ starts catching up to EPJ in discussing the likelihood that Blankfein is a goner at Goldman Sachs, you know the end is near.

His latest dumb act in a series of PR bungles was to hire the World War I battleship Mark Fabiani to handle Goldman's crisis PR. Less than a week after Fabiani takes the crisis management helm at Goldman, WSJ comes out with these words:

Some executives and powerful alumni of Goldman Sachs Group Inc. are talking about whether Chief Executive Lloyd C. Blankfein can survive the legal and public-relations storm swirling around the company, according to people familiar with the situation... the open discussions inside Goldman about life after Mr. Blankfein show that the firm is being rattled by the turmoil...Some shareholders said the tide could turn against Mr. Blankfein if Goldman shares fall below their current book value of about $122. The stock is down 19% since the SEC's lawsuit was filed.

The Partner of Goldman's New PR Agent Is Using Goldman as a Symbol of Disgrace

I knew the hiring by Goldman, of PR agent Mark Fabiani, would be fun. Here we go.

The partner of Fabiani  thinks Goldman is so scammy that they can use that fact as the centerpiece of an effort to defeat Meg Whitman, who is a candidate for governor of California.

John Lovell at Capitol Rap reports:

Democratic operative Chris Lehane feels that the G-S issue can be used to great impact against potential GOP gubernatorial nominee Meg Whitman. He is involved with an “independent” effort to defeat eMeg, known as LEVEL THE PLAYING FIELD. Over the past several weeks, LEVEL has been in the forefront of efforts to link eMeg to the G-S debacle. Seems that eMeg was a member of the G-S Board of Directors and Democrats believe that they have finally found the elixir that can slow her run at the Governor’s non-mansion (remember, California does not have a Governor’s mansion).

Goldman-Sachs is feeling the heat – nationwide heat, well beyond a California gubernatorial race. So, Goldman-Sachs has hired a crisis consultant to refurbish their tarnished image.

And who has G-S hired? Well, that would be Mark Fabiani, veteran political operative for Democrats AND THE BUSINESS PARTNER OF CHRIS LEHANE.

So, Fabiani tries to refurbish G-S image, while Lehane tries to link eMeg to G-S current disgrace. Seems as if both Fabiani and Lehane could have worked for G-S when they were selling the worthless investment products.

Hey Lloyd, Think of it this way. It's like being on both sides of the same trade, net neutral. When Fabiani isn't dissing you in California, he's lovin' you in NYC.

Lloyd Blankfein: Shut Up, Already

There is no way Goldman Sachs is going to win their case in the court of public opinion with their current PR approach. The latest move by the firm is to send CEO Chairman Lloyd Blankefein on the show of  softball throwing Charlie Rose.

How much of a softball thrower is Rose?

When Treasury Secretary Geithner was put under new handlers and sent out into the world to redo his damaged image, his new handlers sent him for his first interview to the safe confines of Rose's studio.

It's a tough place to get into trouble. The tone deaf Blankfein probably didn't do too much additional damage, although he did manage to make this idiotic statement about Wall Street:

You could call it a casino, but if it is, it’s a very socially important casino.

At times the interview turned into a kind of therapy session where Blankfein discusses his weaknesses:

Goldman Sachs must improve communication with the public, Blankfein said.

“That’s a huge challenge, I would just say it’s my deficiency,” he said.

Ah, no kidding Lloyd. We had that figured out when you told FT you were doing "God's work". You have shifted a bit seeing you now consider Wall Street a casino, but Lloyd isn't there a local chapter of Toastmaters where you could work out your communications problems, instead of practicing with Goldman Sachs' reputation on the line?

Who the hell is prepping Blankfein? Blankfein is not the type, clearly, to be coming up with allusions on his own to God, casinos and crap tables. I'm thinking that Lucas van Praag is not a long-term survivor as head of PR at Goldman.

If Goldman wants to survive, they have to stop sending Blankfein on these nutty kamikaze missions. There are 32,000 f'ing employees at Goldman. They need to find a sob story. Find someone at Goldman like a 37 year old female single mother, whose husband died in the WTC attack. Show her wrangling a trade to get an extra oil supertanker into a New Jersey port just in time for Memorial Day that will mean lower oil prices for East Coast travelers. Put that on TV.That's how you get people to understand what the honest side of Goldman does.


Lloyd use your head for something else besides keeping your nose at a 180 degree angle to the ground.

H.L. Mencken Call Your Office

H.L Mencken once defined Puritan reformers as those who have "a terrible, pervasive fear that someone, somewhere, is having fun."

You can find of a lot of these busy bodies on college campuses. The latest is a University of Iowa professor who looks down on the fact that money is being waged on whether Lloyd Blankfein will survive the year as CEO at Goldman Sachs.

NYT found the prude:

Betting on Goldman isn’t much different, said George R. Neumann, a University of Iowa professor of economics who in 1988 invented the Iowa Political Stock Market, the predecessor to the still-popular Iowa Electronic Markets.

Professor Neumann’s online futures market serves primarily as a teaching tool, while Intrade is a profit-making exchange that charges 5 cents a contract.

“I don’t know what the economic gain is,” Professor Neumann said of the betting on Goldman, “and it’s in bad taste.”

Puhleezee. As taxpayers, we coughed over billions to the scamming Goldman, at least we can have a little fun betting on his deaprture from Goldman. And the economic gain is huge psychic gain, something that wound up types like Neumann never consider because it doesn't fit into their uptight equations.

Is Goldman About to Buckle and Settle Charges?

The big swinging dicks apparently don't have the balls to match.

Word from NyPo is that "Goldman Sachs may soon settle its fraud case with the SEC, opting to end the legal fight rather than endure a repeat of the public flogging it received Tuesday in Washington."

If this in fact is true, it indicates another blunder that will paint Wall Street in a bad light when it is really a Goldman Sachs problem, and not a Wall Street problem. 

Further, from a legal perspective any securities lawyer (outside of the SEC) will tell you that the SEC has no case.

If Goldman settles now, it indicates another tactical error by Goldman. They should have foreseen the negative publicity that the charges would bring and have had a full court press public relations campaign, with people who know how to present these things, in every nook and cranny of the news media. That they didn't, and still don't, points to a public relations failure of the first order. 

Outside of strategically leaking voicemails to the media, they haven't done anything right. And the communications disaster is not something that started with the SEC suit. It has been on-going from the time MSM  got wind of the fact that former-Goldman people were crawling all over the U.S. government and governments around the world. This should have been presented and promoted by Goldman as executives leaving big money to "serve" the world, never to return to Goldman big money. "We give Goldman people, who are very smart and talented people, the opportunity to make extremely good money, so that ultimately money does not become a concern and they can use that freedom after they leave Goldman to advance their pet projects, be it advancing freedom, intellectual curiosities, whatever."

That this theme was not promoted is at the core of Goldman's problem. To the man on the street, Goldman is just a bunch of evil bastards, doing evil 24 hours a day. And while Goldman does do enough evil that were  the Goldman perpetrators to confess, it would keep a bunch of pedophile priests so occupied in confessionals that they wouldn't have time for the kids,  Goldman also does do some fundamental Wall Street work that sadly is beginning to be associated with Goldman evil doing, when it is nothing of the type.

The best thing that could happen for Wall Street is for a volcano to erupt under Goldman's headquarters and the entire bunch of them turn into particles of ash that perhaps delay air flights over America for a week.


A less desirable, though next best alternative, would be for Lloyd Blankfein and Goldman PR chief Lucas van Praag be bounced from Goldman, and replaced by people who understand what Wall Street is about and want to make money the old fashion way by earning it and not by playing footsie with the government to the degree that crooked politicians are embarrassed to be seen in their presence.

Senate Panel is 'Short' on Info

NyPo gets it:

It was designed to be a scolding of Goldman Sachs' brass in search of assigning blame for the mortgage crisis -- but it ended up revealing how little Congress understands about the gold-plated firm's business.
Some of Goldman's best and brightest minds yesterday faced a withering verbal assault from lawmakers who often betrayed their lack of understanding of Goldman's role in many of the transactions now drawing fire.


At one point, Michigan Sen. Carl Levin, chairman of the Senate Subcommittee on Permanent Investigations, accused Goldman of being "rife with conflicts of interest," and declared the firm wasn't worthy of trust.



While the senators repeatedly argued that Goldman created securities solely for the purpose of betting against them, Goldman CEO Lloyd Blankfein and others fended off those charges by trying to explain that investors, all of whoMany of the issues that were sticking points for members of the panel, appeared to be rooted in different interpretations of Goldman's role as a so-called "market maker," or an entity that links buyers and sellers.

m are savvy enough to understand the bank's role, weren't interested in whether Goldman was betting for or against a security it created.


"You keep using the word betting 'against,'" Blankfein exclaimed at one point to Levin. "We are principals."
"The nature of the principal business and market making is that we are the other side of what our client wants to do," he said. "And in the context of market making, that is not a conflict. I don't think our clients care or should care [if Goldman is taking a short position]," he added.


"I don't view it as [a conflict of interest]," CFO David Viniar told Sen. Ted Kaufman in explaining Goldman's dual role.


Earlier in the day, several members of the subcommittee tussled with former mortgage-trading desk boss Dan Sparks, who argued Goldman was under no obligation to disclose its position with a security it was selling because that position might change day to day.

"Should you have told that client you were going short, if you were?" Levin demanded of Sparks.

"Currently, that is not an obligation," Sparks said. "I think it would create a number of issues because those positions change a lot [and] you don't know what those positions are [at any given moment]."

But the misunderstandings didn't stop there. At one point, a number of senators declared that Goldman had a fiduciary responsibility to be completely transparent about its activities with each security, even though that responsibility doesn't exist with market makers.

WSJ's Deputy Managing Editor Alan Murray amazingly doesn't get it:

Goldman hearing highlighted conflict between client service and proprietary trading. Is that fraud? Unclear. But still disturbing.

What Lloyd Blankfein Should Have Said at the Cogressional Hearings

Goldman Sachs CEO Lloyd Blankfein's comments before the Senate’s Permanent Subcommittee on Investigations was spot on as far as accurately explaining the role that Goldman plays in the financial arena (when it isn't raping American taxpayers through shady bailouts, see my update), but Lloyd just doesn't have the EPJ ability to drive home a point in a manner that people won't forget.

Blankfein accurately pointed out that in its money management business the firm has a fiduciary ability to do the best it can as far as picking assets that will perform well for a client, but that no such fiduciary ability exists in its role as a market maker. The Senators didn't seem to get this point, and regularly brought up the "conflicts of interest" that Goldman was supposedly facing as a market maker. What Blankfein should have pointed out is that the Senators were headed toward a solution that would "freeze markets" and "kill off a part of capitalism."

Here's what I mean. On any trade there are  always two sides, a buyer and a seller. As a market maker what Goldman is doing is providing a market for a client who wants to buy or sell something. By providing this market, Goldman either has to find someone else for the other side of the trade or take the other side themselves. The Senators appeared not to get the fact that in its market maker role Goldman is not providing advice. Thus, there is no conflict of interest. (Remember this is not the money management side of their business). If I have done my own research and want to buy 100 shares of Google, I really don't care what Goldman Sachs thinks about Google. If Goldman Sachs is willing to sell the shares by shorting them or by finding a willing seller, I really don't care, if I am just using Goldman as a market maker.

To the Senators, this seemed to be a conflict if Goldman thought Google was going down in price and they sold Google too me anyway. But if I am going to Goldman solely for their role as a superior market maker (not their opinion), think of the madness I would have to go through, for no reason, if I could only use their market making skills when they were bullish on Google. If I wanted to buy some Google stock weekly and they suddenly turned bearish, then I would have to find a bullish market maker. Then if that market maker turned bearish, they wouldn't be able to sell me Google stock any more and I would have to find another market maker that was bullish. And it could go on and on bouncing between market makers to find one that agreed with me even though I was relying on my own research and wanted a broker for market making skills, not research. A rule requiring market makers to be in sync with their clients would freeze up markets and make executions much more difficult because a market maker wouldn't be able to short the stock to me (i.e.be on the other side of the trade.). He would have to find someone through a bearish market maker (not directly) that wanted to sell the stock. These would all be major complications that would be inflicted on trades that have nothing to do with the service a market maker is valued for, that is trade executions. .

A further problem the Senators seemed to have was that Goldman doesn't routinely disclose who is on the other side of a trade. But think about this. Say Warren Buffett wants to buy a stock. Does it really make sense that Buffett's broker has to disclose that it is Buffett that wants to buy the stock? Can you imagine the price jump in stocks when word got out before a trade that Buffett was buying a stock. How is this fair to Buffett, who is using his own skill and research? It would create a huge disincentive for him to continue to discover great opportunities, if he is forced to reveal what he is buying in advance. That's why you rarely know who is on the other side of a trade.

The proposals that the Senators are hinting at, a proposal requiring disclosure of who is on the other side of a trade and a proposal that trades could only be executed by market makers who are in sync with an investor's thinking, would freeze up markets and kill off an important part of capitalism.

The Senators in their posturing and posing have no idea what the hell they are talking about and would be simply be driving a part of the money raising, capital allocation sectors of the economy off a cliff.

"This Is Lloyd In Washington D.C."

Goldman continues with this amazing new idea to leak Lloyd Blankfein's emails. I wonder where they got that idea from? Here's the latest leak via WSJ:

This is Lloyd on [Tuesday evening] in Washington, DC.

[Earlier today], I along with David Viniar, Craig Broderick and several other current and former Goldman Sachs professionals testified before the US Senate’s Permanent Subcommittee on Investigations.

As anticipated, the questioning during the hearing was rigorous, but we tried to remain focused on providing a complete context of our business, how we manage our risk, and the value we provide for our clients and to the broader system. In those instances where the subcommittee raised questions about ethics, we tried to convey the seriousness with which we adhere to the rules and regulations that govern our business, as well as the letter and spirit of our own Business Principles.

In the totality of our testimony, I hope we made clear the confidence we have in all of you - the people of Goldman Sachs - especially your commitment to integrity, and your service to our clients.
Let me remind you that we should anticipate continued external focus on Goldman Sachs for the foreseeable future. Please do not let this distract you from your daily responsibilities.

I am very grateful to our colleagues, former and current, for the preparation that went into their testimonies and for the seriousness with which they approached the hearing.

As we hope we made clear [today], we will continue our efforts to make clear to legislators and regulators around the globe that we take our responsibilities very seriously. We will do everything we can to support bipartisan reforms that restore confidence and integrity to the capital markets.

Thank you.

SHOWTIME: Lloyd Blankfein now testifying...

before the Permanent Subcomittee on Investigations. It's live on C-Span 3, here.

I am on my second bucket of popcorn.

Here's the Serious Situation that Could Blow Goldman Sachs Out of the Water

While the SEC continues to pursue a highly questionable fraud charge against Goldman Sachs, new information suggests that a serious violation may have occurred that could cost the chairman and chief executive of Goldman Sachs, Lloyd Blankfein, his job and that of the President and COO, Gary Cohn, and severely damage the firm.

In Goldman's 2009 annual report to investors, Blankfein and Cohn said that Goldman “did not generate enormous net revenues or profits by betting against residental related products."

However, in an email just released by the Senate Subcommittee Investigating the Financial Crisis,  Blankfein, , wrote in November 2007: “Of course we didn’t dodge the mortgage mess. We lost money, then made more than we lost because of shorts.”

In other emails released, Goldman's CFO David Viniar responded to an email that Goldman had made $50 million in one day by taking short positions : “Tells you what might be happening to people who don’t have the big short..."

In another released email, a Goldman employee wrote in response to news of a decline in some mortgage backed securities that Goldman was short, “Sounds like we will make some serious money.”

“Yes we are well positioned,” another responded.

Thus, it's clear, Goldman did make money shorting mortgage backed securities.The size of net profits is not clear, but the size of net profits  becomes critical.

It is a situation where size matters, thanks to Blankfein's and Levin's claim in the annual report that net-profits were not enormous.

The "big swinging dicks" of Wall Street better hope that the size of the net profit they made from short selling mortgage backed securities was tiny. If the net profit is anywhere close to as big as they think their dicks are, they are in serious trouble for reporting false information in their annual report.

-----

Here are the emails released by the Senate Subcommittee . They are fascinating reading.

Tone Deaf Lloyd to Testify Tuesday

Goldman CEO Lloyd Blankfein will testify Tuesday before the Senate Permanent Subcommittee on Investigation, according to NyPo.

This will be the first public appearance of Blankfein since the SEC filed fraud charges against the firm.

Popcorn for those viewing the event is highly recommended. Senators will be posturing and posing as defenders of the little man (Before they head out for cocktails with lobbyists) and the notoriously tone deaf Blankfein, who told FT that Goldman was doing God's work, and told the President of the United States he couldn't attend a sitdown because it was too foggy, is unlikely to come out of the event with rising approval numbers.

LLoyd Blankfein Check Your Retirement Benefits; The Latest Embarassment for Goldman

How bad has Goldman Sachs screwed up its PR effort, while raping America, under the helm of Lloyd Blankfein?

According to WaPo, the Obama Administration turned aside an offer from Goldman Sachs to take on the assignment of selling, commission FREE, CitiGroup stock. The Administration feared giving the job to Goldman after it has been targeted by lawmakers,the media and the man on the street, for its role in raping America during the financial crisis, would have no upside.

If Goldman stock breaks below 100, Blankfein is history.

Goldman's PR Problem May Cost Blankfein His Job

Goldman's idiotic PR approach, while it rapes America, has even caught the eye of FOXnews. They write:

The decision announced earlier Monday that the Treasury Department has chosen Morgan Stanley to advise it on unloading its massive stake in Citigroup -- the largest stock offering in history and one of the most high-profile investment banking assignments in years -- has given credence to the opinion of some senior executives inside the firm that Goldman's image problems will impact its client related business. These executives worried that prospective investment-banking clients concerned about their association with the firm will simply hire other players rather than face the fallout of working with Goldman.

While the firm continues to deny it, there are indications that a coup attempt is in the making. This news story at FOX was just another plant to keep the story boiling internally and to judge reactions to the story, to see who else might be recruited for the coup attempt.

Lloyd Blankfein may, or may not, be aware of who is gunning for him, but rest assured the plotting continues. I will be very surprised if he survives the year.

Dinner for Two, Two American Oligarchs

Goldman Sachs and Morgan Stanley have been bitter rivals. But since the financial crisis began, Morgan CEO John Mack, and Goldman CEO Lloyd Blankfein have become "best friends forever…", says CNBC.

CNBC is reporting that the two have been dining together regularly, including this last Monday.

I'll let Adam Smith take it from here:

People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public...

Goldman Chief (With A Straight Face) Says Turmoil Could Be A Boon

FT reports:

The current turmoil in the capital markets is testing Goldman Sachs, but it is also creating historical opportunities for growth, says the bank’s chief executive, Lloyd Blankfein.

Speaking at Merrill Lynch’s annual banking and financial services conference, Mr Blankfein conceded that his firm was not immune from the current downdraft in the markets....

[But] “The most important opportunities in Goldman Sachs’ history came in times of stress,” he said. “Our culture has given us the wherewithal to embrace change.”

Embrace change? Especially when your man, Paulson, is at the Treasury making the change. FT again:

In the past 12 months, as the competitive landscape on Wall Street changed, Mr Blankfein said Goldman Sachs had gained more than 100 new clients that had either been involved in billion-dollar deals or raised more than $500m in funds.

No kidding? Paulson blows away Goldman's competitors, Bear Stearns and Lehman Brothers, and Goldman picks up 100 new clients. Helluva a plan.

NY Fed Holding Emergency Meeting On Lehman's Future

From WSJ:

In attendance are New York Fed President Timothy Geithner, Mr. Paulson and Securities and Exchange Commission Chairman Christopher Cox. The Wall Street executives included Morgan Stanley Chief Executive John Mack, Merrill Lynch Chief Executive John Thain, J.P. Morgan Chase CEO Jamie Dimon, Goldman Sachs Group CEO Lloyd Blankfein, Citigroup Inc. head Vikram Pandit and representatives from the Royal Bank of Scotland Group PLC and Bank of New York Mellon Corp., among others.

-EPJ Newsdesk