The Great Debate

Taking on the rating agencies

By Charles R. Morris
February 5, 2013

The credit rating agency, Standard & Poors, announced Monday that it was the target of a civil lawsuit by the Justice Department for its actions in rating the complex securities that played a major role in the 2008-2009 financial collapse.  The company also said that it had not been apprised of the details.  It is interesting that the other two major rating agencies, Moody’s and Fitch made no announcements.

Who’d want to host the Olympics?

By Max Seddon
July 26, 2012

Londoners are greeting the Olympics with all the enthusiasm of a child awaiting a root canal. The government has warned those unable to book coinciding holidays not to travel anywhere beyond walking distance of home as Communist-style “Olympic lanes” whisk dignitaries past the interminable traffic the Games cause. During the Olympics, London will be run under a curious kind of corporate martial law. Thousands of troops will handle security to make up for private contractor G4S’s staffing “shambles”; missiles have been placed atop public housing; an Orwellian “brand police” is sweeping the city to ensure no businesses other than 11 official sponsors use words like “gold,” “silver,” “bronze” and even “London.”

On Wall Street, big paychecks do not replace corporate culture

By Shideh Sedgh Bina
June 14, 2012

Goldman Sachs can’t seem to stay out of the wrong spotlight these days. With reports about executive layoffs and high numbers of senior people leaving, Goldman is losing its once-untouchable luster as analysts scrutinize its performance through a new lens.

These days, we’re all disgruntled workers

By Mark Crowley
March 23, 2012

The average Goldman Sachs employee earns in excess of $350,000 per year, and we’re assured Greg Smith, who most visibly quit his job there last week, was paid substantially more.

Goldman’s capitalistic monoculture

By Ben Walsh
March 14, 2012

Greg Smith doesn’t have any new criticism of Goldman Sachs in his New York Times op-ed today. Nor are his points as detailed and documented as the SEC’s allegations in the ABACUS case.

from Stories I’d like to see:

Crash winners, the litigation world series, and Defense budget boondoggles

By Steven Brill
December 27, 2011

1. Crash Winners

Here’s a new entry for the lists of winners and losers that get published this time of year: The ten lawyers, bankers, consultants or accountants who reaped the most from the financial disaster of the last three years.

How big banks can fix their leadership blindspots

By Kate Pugh
October 18, 2011

By Katrina Pugh
The opinions expressed are her own.

In the jitteriness over the stock market’s worst quarter in two years, a racing volatility index, and protests spreading across the nation’s major cities, all bank leadership (and perhaps all corporate leadership) needs to ask a fundamentally new question: “What blindspots are dogging us?”  This hardly seems like a radical question. After all, most arbitrators make their money off of other people’s blindspots by seeing around corners where others can’t.

from MacroScope:

Emerging markets: Soft patch or recession?

August 18, 2011

Could the dreaded R word come back to haunt the developing world? A study by Goldman Sachs shows how differently financial markets and surveys are assessing the possibility of a recession in emerging markets.
One part of the Goldman study comprising survey-based leading indicators saw the probability of recession as very low across central and eastern Europe, Middle East and Africa. These give a picture of where each economy currently stands in the cycle. This model found risks to be highest in Turkey and South Africa, with a 38-40 percent possibility of recession in these countries.
On the other hand, financial markets, which have sold off sharply over the past month, signalled a more pessimistic outcome. Goldman says these indicators forecast a 67 percent probability of recession in the Czech Republic and 58 percent in Israel, followed by Poland and Turkey. Unlike the survey, financial data were more positive on South Africa than the others, seeing a relatively low 32 percent recession risk.
Goldman analysts say the recession probabilities signalled by the survey-based indicator jell with its own forecasts of a soft patch followed by a broad sustained recovery for CEEMEA economies.
"The slowdown signalled by the financial indicators appears to go beyond the ‘soft patch’ that we are currently forecasting," Goldman says, adding: "The key question now is whether or not the market has gone too far in pricing in a more serious economic downturn."

from Summit Notebook:

Does Germany need Europe?

December 6, 2010

Jim O'Neill, the new Goldman Sachs Asset Management chairman who is famous for coining the term BRICs for the world's new emerging economic giants, reckons he knows why Germany might not be rushing to bail out all the euro zone debt that is under pressure. Europe is not as important to Berlin as it was.

from Jeremy Gaunt:

The rule of three

August 3, 2010

It is beginning to look like financial markets cannot handle more than three risks. First we have, as MacroScope reported earlier,  Barclays Wealth worrying about U.S. consumers, euro zone debt and Asian overheating.