tagged w/ Credit Crunch
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The Wall Street investment bank reported full year revenue of $28.8bn – down 26% – while earnings almost halved to $4.4bn
Goldman Sachs set aside $12.2bn (£8bn) to pay its staff in 2011 – an average of $367,000 (£238,000) each – sparking criticism that the Wall Street firm was living in a "parallel universe".
The payouts sparked a backlash from unions, who regard them as evidence that David Cameron's government should take steps to ensure top pay is better linked to performance. Campaigners for a "Robin Hood tax" on transactions said it backed their case for new levies on banks.
"When even in a bad year each Goldman employee pockets an average of $367,000 – nearly 10 times the average UK salary – it's proof that banks live in a parallel universe to the rest of us," said a spokesman for the Robin Hood Tax campaign.
Goldman used a greater proportion of its revenue (42%) to pay its 33,000 staff in 2011, compared with 39% a year ago. The firm axed 7%, or 2,400, of its staff during the year and those who remain will learn the size of their bonuses in coming days.
The highest profile firm on Wall Street reported full-year revenues of $28.8bn – down 26% and earnings almost halved to $4.4bn. Lloyd Blankfein, chairman and chief executive of Goldman, blamed "global macroeconomic concerns".
The total payout per staff member of $367,000 – a figure which includes salaries, bonuses, equity awards and benefits – was down 15% on the $430,000 paid the previous year. The actual amount set side to pay staff was down 21% at $12.2bn.
David Viniar, Goldman's finance director, insisted "discretionary" bonuses were down "considerably more than revenues" during the year and said the firm had embarked on a strategy to cut $1.4bn of costs.
But the TUC general secretary, Brendan Barber, said: "Goldman Sachs are brazenly defying their own sliding profits by dishing out pay and top bonuses worth £240,000 a head. This latest example of excessive rewards for mediocrity should give the government the green light to get tough on top pay. Ministers should start by putting workers on remuneration committees and making pay and bonuses exceeding £260,000 liable for corporation tax."
The firm has recently disclosed more about its pay deals in the UK as a result of rules set out by the Financial Services Authority requiring firms to publish pay for "code staff" – those taking or managing risk. Regulatory filings for Goldman Sachs Group Holdings (UK) show that it had 95 code staff in 2010 who had an average pay deal of $6.2m (£4m) in 2010 – and had a further $595m awarded in a one-off mid-year award of shares in 2010.
"This past year was dominated by global macroeconomic concerns which significantly affected our clients' risk-tolerance and willingness to transact," Blankfein said.
"As economies and markets improve – and we see encouraging signs of this – Goldman Sachs is very well positioned to perform for our clients and our shareholders," he added.
The turmoil in the eurozone held back many of its business areas. Revenues in investment banking were down 9% while its business that underwrites share offerings was down 14%. Its fixed income, currency and commodities operations suffered a 34% fall in revenue.
"Although activity levels in 2011 were generally consistent with 2010 levels, and results were solid during the first quarter of 2011, the environment during the remainder of 2011 was characterised by broad market concerns and uncertainty, resulting in volatile trading and significantly wider credit spreads, which contributed to difficult market-making conditions and led to reductions in risk by the firm and its clients," the firm said.The Wall Street investment bank reported full year revenue of $28.8bn – down 26%... more
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The global financial system is on the edge of a new credit crunch as the cost of insuring the bonds of banks across the world hits new highs, analysts have said.
By Harry Wilson, Banking Correspondent
Credit default swaps on lenders as far afield as China and Australia, countries that until recently seemed immune to the chaos, have doubled in the last two months to levels not seen since the financial crisis.
In Europe, French and Belgian government officials are due to meet on Monday to discuss the crisis enveloping Dexia as speculation mounts about a possible break-up of the Franco-Belgian lender.
Last week, the cost of insuring Dexia bonds hit an all-time high of 900 basis points, nearly double the level just two months ago, meaning the annual cost to insure €10m (£8.59m) of the bonds is £900,000.
"The money ran out in June and what you are seeing now is the beginning of a new credit crunch, except this time it will be truly global, not Western," said one senior London-based credit analyst.
Dexia, along with other European lenders, has been hard hit by the closure of the interbank lending markets and the continuing unwillingness of investors to buy the bonds of eurozone banks.
"Nothing is really working at the moment. None of the markets are functioning. Until Greece defaults it's hard to see any resolution," said one senior London-based credit analyst......
Continue at:
http://www.telegraph.co.uk/finance/financialcrisis/8802846/Banking-crisis-set-to-trigger-new-credit-crunch.htmlThe global financial system is on the edge of a new credit crunch as the cost of... more
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The 1913 Federal Reserve Act let powerful bankers usurp America's money system in violation of the Constitution's Article I, Section 8, giving only Congress the power to "coin Money (and) regulate the Value thereof...." Thereafter, powerful bankers victimized working Americans, using money, credit and debt for private self-enrichment by bankrolling and colluding with Congress and administrations to implement laws favoring them.The 1913 Federal Reserve Act let powerful bankers usurp America's money system in... more
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Banks are jeopardising the country’s economic recovery by restricting lending to households and businesses, a report by the Bank of England warns today.Since the credit crisis began, high street banks have lent less to customers, blaming a fall in demand for new loans, mortgages and other typesBanks are jeopardising the country’s economic recovery by restricting lending to... more
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When this economy that we are all under, that is driven by the two percent that rule us, the middle class and the working class suffer when the wrong switches and levers are pulled that benefit those two percenters. The banks and 'investment bankers' that turned houses into short term profits for themselves and then had to have the 'government' - taxpayers, you and me pay them to stay in business, it left the middle and working class with fewer jobs and the real prospect of starvation.
That's because the sweat of hardworking people are nothing but wage laborers and our work has become another way to make profits from - and can be discarded at the whim of the corporate oligarchy that has developed in the U.S. and the world.
We have no say regarding how our economy is used and manipulated, the people that do, you and I don't see, because it happens in rooms with no numbers, in buildings that have no names by people who pull those switches and levers, the very people that got us into this mess in the first place.
They are the ones that pay the politicians and media mines to make sure you and I have no chance, no chance at all. It's the media that is the lap dog of these two percenters. It's not a 'liberal' media; it's a corporate media that wins big when the political campaign season comes around and who pays this corporate media, the multi-national banks, oil, pharmaceuticals, and mega mega corporations. It's all about profits for the billionaires and starvation for the working people of this country.
... and most of us buy this corrupt system. How stupid is that? Really stupid.
So for a start, here's one idea. Start paying for things that you buy - in cash. That effects banks in a big way, stop using credit cards as much as possible. By doing that simple act you and I can begin to transform this stupid system over night.
If you can’t do that, write more checks, just stay away from credit cards.When this economy that we are all under, that is driven by the two percent that rule... more
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Opening a credit card from a store does more than get you a discount, it also hurts your credit score.
Equifax Blogger Ilyce Glink warns that opening credit cards hurt your score which is not worth it if you are looking to buy a home.
"The credit card I opened had only a $2,000 line of credit. I charged several hundred dollars worth of clothes and paid it off before the end of the month.
I saved 20 percent on the clothes. I cost myself thirty points in my credit score."
This experience also explains why mortgage lenders will pull your credit history at least twice between the time you apply for and close on your loan.
In today's new world of mortgage finance, lenders are tightening credit requirements. It's far more difficult to get a mortgage today than it was five years ago.
Even borrowers who have near-perfect credit histories with credit scores in the 800 range are being rejected for reasons that seemingly make no sense-like a small investment loss taken on a tax return, or an extra $500 deposited into a savings account that couldn't be adequately explained.Opening a credit card from a store does more than get you a discount, it also hurts... more
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Over the past several decades, one of the primary engines of U.S. economic prosperity has been a constantly expanding debt spiral. As long as the U.S. government, state governments, businesses and American consumers could all continue to borrow increasingly large amounts of money, the economy was going to continue to grow and "the greatest party on earth" could continue. But many of us knew that if anything ever came along and significantly interrupted that debt spiral, it could cause a credit crunch even more severe than we saw at the beginning of the Great Depression back in the 1930s. You see, back in the "roaring 20s", American businesses and consumers had leveraged themselves like never before. Debt soared to record levels and when the credit spigot was suddenly turned off the whole thing came crashing down and it took an entire decade and a world war to recover. Well, today things are frighteningly similar. Over the past 30 years we have piled up unprecedented mountains of debt. In fact, today our entire economic system is based on debt. So what would a credit crunch do to an economy based on debt? Well, it would absolutely devastate it of course. So are we facing a credit crunch in 2010? Yes. Consumer credit in the United States has already contracted during 15 of the past 16 months, and there is every indication that things are about to get even worse.Over the past several decades, one of the primary engines of U.S. economic prosperity... more
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Comedian Frank Skinner has said he lost millions of pounds as a result of the economic downturn.
Skinner said he had become a "victim of the credit crunch" after investing in the American International Group (AIG), which nearly went bust two years ago.
The loss of "a few million" forced Skinner to take stock of his life, he told BBC Radio 4's Desert Island Discs.
http://news.bbc.co.uk/1/hi/entertainment_and_arts/10304087.stmComedian Frank Skinner has said he lost millions of pounds as a result of the economic... more
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Thursday 11 March 2010: Greek trade unions called yet another general strike to put pressure on the national government and the international banking system. In Athens a protest of hundreds of thousands massed. Before the protest started marching on parliament the riot police struck with shock grenades, batons and shields and tear gas. The retaliation from all groups, including the infamous Black Bloc, showed who controlled the power on the streets of Athens.Thursday 11 March 2010: Greek trade unions called yet another general strike to put... more
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The UK was one of just five European countries that saw house prices rise last year, while property values in Latvia plummeted by more than 50%.
These are among the key findings of a study published today which suggests signs of recovery are already visible in some of Europe's housing markets – including Britain's – following the damage wreaked by the global financial crisis.
http://www.guardian.co.uk/money/2010/mar/02/uk-house-prices-europe-ricsThe UK was one of just five European countries that saw house prices rise last year,... more
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Saturday 27 february 2010: An estimated 5000 local residents marched on Whittington hospital in Archway, North London, to oppose the closure of the accident and emergency department, which most on the protest considered the first part of the closure of the entire hospital.
This is just the latest in government (taxpayer-funded) cuts to balancing the (fake) economy. But as most vented on this day, the government has £500bn for the bankers, who continue to lie, cheat, steal and gain incredible bonuses on tax-payers money while the basic rights of every person living in the UK are denied due to "lack of funds" and "budget cuts".
Today in Islington was just the start of mass opposition to all governments, not just those in power. It has become increasingly apparent all parties are paid for by the same financial backers and the UK public is getting to grips with that betrayal of democracy.
In the meantime the residents of Archway, Holloway and Islington try to hold on to their last remaining hospital.Saturday 27 february 2010: An estimated 5000 local residents marched on Whittington... more
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Germany's Economy Minister Rainer Bruederle has warned that German firms face another credit crunch if the country's banks do not lend more.
In a television interview he said: "They should be giving out more credit. If they don't do this the government can resort to regulatory measures."
Mr Bruederle has also appointed a "credit mediator", Joachim Metternich, to work with banks and companies.
The government hopes that Mr Metternich will make loans more easily obtainable.
Why on earth does lending more money (the supposed reason for getting us in the recession in the first place) help us to get out of a recession?
oh the complications of money and all the woes it brings! is it really all worth it?
http://news.bbc.co.uk/1/hi/business/8390792.stmGermany's Economy Minister Rainer Bruederle has warned that German firms face... more
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A comprehensive & innovative proposal for a new system of sustainable economics. These "Digital Coins" can be transferred instantly anywhere in the networked world. This can be done anonymously, without accounting and without any third party involvement, analogous to handing someone a gold coin. You have it. Now they have it. No bookkeeping is required unless desired.
These "unique digital objects" are also analogous to gold coins in that they have inherent value. They are fully redeemable for specific real goods and services.
http://digitalcoin.info/The_Essence_of_Money.htmlA comprehensive & innovative proposal for a new system of sustainable economics.... more
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Economists and politicians didn't foresee the Great Recession of 2008, but my grandparents sure did... A conversation with my elders in 2006.Economists and politicians didn't foresee the Great Recession of 2008, but my... more
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As we head into the deepest recession since the 14th century, a new report published today by the Mutual Agony Foundation reveals an unprecedented level of cooperation between employers and staff in solving financial, and personal, problems together. The recent situation at BA where almost 7,000 workers agreed to participate in the company’s ‘work for free’ initiative is just one example of the solidarity workers are showing employers. Now BA has announced it will build upon its success and merge with Honda to form a new super company known as Bonding plc. But how have these breakthroughs been achieved? Our WORLDbytes reporters were granted exclusive access to film a ‘town hall’ staff meeting at the newly formed recession-proof, super company to find out.As we head into the deepest recession since the 14th century, a new report published... more
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THE Galwayman who bought Ireland is dead, England is deserted, while Australia and New Zealand have merged.
They were designed to make Dubai the envy of the world: a series of paradise islands inhabited by celebrities and the super-rich reclaimed from the azure waters of the Arabian Gulf and shaped like a map of the Earth. It was called The World.
As millions of tonnes of rock were dumped into the sea for the foundations, timely leaks suggested that Brad Pitt and Angelina Jolie were to buy Ethiopia, Richard Branson was tipped to occupy England, while Rod Stewart would border him in Scotland.
Hazard
Instead it has become the world's most expensive shipping hazard, guarded by private security in fast boats and ringed by warning buoys to keep the curious away.
A development that was meant to send Dubai's star into the firmament of First World cities has been left to the mercy of the waves and the baking winds.
Mile after mile of breakwater built from boulders brought hundreds of miles by ship has been laid, but inside its man-made lagoon, work has completely stopped.
The expected map of the world of 300 islands is instead a disjointed and desolate collection of sandy blots -- a monumental folly just out of sight of Dubai's shore.
*******
More at link.
Rising seas due to climate change would have drowned these islands anyway.THE Galwayman who bought Ireland is dead, England is deserted, while Australia and New... more
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Are you tempted to check your partner's Credit Report before taking the plunge?
And would you run a mile if your partner's finances weren't so hot?
Well these may have seemed like run of the mill questions prior the current recession. But with millions of out work and more threatened with job losses can you recession proof your relationship?
A year on from the meltdown on Wall Street and other large banking institutions around the world and we are seeing just how the recession has affected our love lives.
The economic gloom is not just hitting our wallets as a recent ING survey reveals that American relationships have been affected more than any other nation.Are you tempted to check your partner's Credit Report before taking the plunge?... more
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Some fella that was on Channel 4's 'Secret Millionaire' is er, not such a millionaire anymore. In fact, he's now bankrupt.
Chek Whyte gave away thousands of pounds on the show. According to the Beeb, he's believed to owe £30m.Some fella that was on Channel 4's 'Secret Millionaire' is er, not such... more
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As media companies are forced to sell off assets to lenders, JP Morgan is buying them up with the help of practically free money through the Federal Reserve direct lending window and via the tax payer bail out money.As media companies are forced to sell off assets to lenders, JP Morgan is buying them... more
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