Wednesday, Feb 18, 2009
Off topic, but will be appreciated by many HPCers
CNBC: Goldman Sachs Partners Borrow to Cover Margin Calls
Tough times on Wall Street are reaching all the way to the highest levels of the most storied former investment bank—Goldman Sachs—as partners there are being forced to borrow money to cover margin calls, according to sources within the firm. Several Goldman Sachs partners have leveraged their Goldman Sachs stock to buy alternative investments such as hedge funds & private equity, and they have done so through their Goldman Sachs brokerage accounts. But Goldman stock has declined in value by more than 50 percent since last spring, meaning that Goldman Sachs is in the awkward position of making margin calls on its own partners, who can't meet those calls because their alternative investments are underwater and they don't have enough cash on hand.
10 Comments
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1. flashman said...
Being a partner at Goldman is not as exclusive as it sounds. They promote literally hundreds of employees every year to be partners. They also have hundreds of Managing Directors. Obviously you don't need much quality to get one of these promotions but these new partners invariable let it go to their heads and consequently bet like loonies to get rich. The Goldman 'small swinging dicks' are a bit of an industry joke
Anyway, I'm not going to be posting any more because I've kinda run out of things to say re the HPC. I've enjoyed my week of posting so thanks for the fun and good luck with the crash!
2. This comment has been removed as it was found to be in breach of our Blog Policies.
3. gardeniadotnet said...
1. flashman said... Anyway, I'm not going to be posting any more...
Aw c'mon, won't you reconsider?
It's over-inflated egos like yours that make HPC such an entertaining place to be! lol
4. stillthinking said...
You said that already Flashman you great flirt, yet here you are.
5. gordon brown said...
Flashman you spoilt child. Throwing your toys out of the pram?
6. jackas said...
I wonder if badger (or even the sheeple) have considered what a 90% fall in city bonuses is going to do to house prices?
but....erm.....er......hang on......
*giant printing machine revs up in the background*
7. japanese uncle said...
Puzzling? I seem to remember GS was reincorporated as plc, converted from partnership a few years ago.
Anyway it is only those genuine insiders at the top or behind the scene that can really make a stinking fortune, while many of the goons with the title like managing directors or senior partners or whatever without the knowledge of the precise timing to trade will lose out. Sidewinders sacrificed by kingcobras.
8. Crunchy said...
Margin calls again.
That it what started all this OVERLEVERAGING!!!!!!!!!!!!! Not subprime.
9. drewster said...
The banks who lent money to the traders are fools. Banks should only lend responsibly to businesses and individuals with the ability and willingness to repay. Lending to reckless traders to gamble on the stockmarket is foolish beyond belief. Furthermore, this kind of lending doesn't help grow the economy or create jobs. How about a ban on leveraged stockmarket trading?
10. 51ck-6-51x said...
JU - you are correct the partners are titles, not as in a legal partnership, as they used to be - If they were to have stayed a partnership they may have avoided many of the risks they took!
Drewster - "how about a ban on leveraged ... trading" - I believe this would be better than the current position, but I believe that if we remove _all_ regulation we would have a far better system. I think I am a lone voice in a very crowded room though!