This post was published at WeAreChange
This post was published at WeAreChange
Goldman Sachs has accelerated nearly $100 million in stock awards to top executives before the end of the year in order to avoid unfavorable changes in the new tax code, according to public filings posted Friday.
The most sweeping overhaul of U. S. tax code in 30 years includes a provision which caps a corporate deduction for executive pay; under current law, corporations can deduct up to $1 million per executive’s base salary, however there’s no cap on deductions for performance-based pay, such as bonuses.
Under the new provisions, both base salary and performance bonuses count towards to $1 million cap – which is why Goldman accelerated $94.8 million in bonuses originally scheduled for January, 2018. By paying the bonuses early, the bank will save money on its own tax bill.
This post was published at Zero Hedge on Sat, 12/30/2017 –.
From the “Yellen Call” to “globalization” and from “disruption” to “dumping“, 2017 had it all and Goldman Sachs’ annual ‘themes’-driven crossword is just the ticket as the final few minutes of the trading year tick away…
Via Goldman Sachs,
This post was published at Zero Hedge on Fri, 12/29/2017 –.
Talk amongst many traders is that they are so unsure how the new rules and regulations surrounding the implementation of MIFiD II (Markets in Financial Instruments Directive) are to be imposed, that some even said they were keen to extend their holidays until this mess is sorted out. In other words, until they hear that regulators will grant firms a six-month delay for part of the changes about to be implemented for both the company and country, many just do not even know how to conduct business anymore.
The most critical problem surrounding this nightmare is the fact that every trade (with a European Counterpart) will require a LEI (Legal Entity Identifier). This is not such a critical issue for Wall Street Banks since they have already won a 30-month grace period after the SEC requested time to negotiate terms with the EU. Goldman Sachs has installed another of its board members as the top negotiator inside the SEC – Alan Cohen. Goldman Sachs has now three strategic people in the Trump Administration to steer the legislation in their favor both in the USA with restoring Glass Steagall to reduce their competition (Gary Cohen & Steven Mnuchin) and they have now added Alan Cohen, who was their Head of Global Compliance.
This post was published at Armstrong Economics on Dec 29, 2017.
The first thing to go when a country is moving into economic crisis is the arts. This is intermixed with various social programs. As the economic crisis broadens, demand for taxing the rich rise. However, all this accomplishes is to cause capital to hide and hoard even more refusing to invest or spend and this then adds to the economic decline.
The BRICS were touted as the new rage in the world economy. The BRICS were even holding their own summits and they were supposed to surpass the G7, were all the forecasts. Brazil, Russia, India, China and South Africa became known as the ‘BRIC’ nations back in 2001 which was a term coined by of course Goldman Sachs.
This post was published at Armstrong Economics on Dec 27, 2017.
The many new integrated non-USD platforms devised and constructed by China finally have critical mass. They threaten the King Dollar as global currency reserve. Clearly, the USDollar cannot be displaced in trade and banking without a viable replacement for widespread daily usage. Two years ago, critics could not point to a viable integrated system outside the USD realm. Now they can. The integration of commercial, construction, financial, transaction, investment, and even security systems can finally be described as having critical mass in displacing the USDollar. The King Dollar faces competition of a very real nature. The Jackass has promoted a major theme in the last several months, that of the Dual Universe. At first the USGovt will admit that it cannot fight the non-USD movement globally. To do so with forceful means would involve sanctions against multiple nations, and a war with both Russia & China. Their value together is formidable in halting the financial battles from becoming a global war. The United States prefers to invade and destroy indefensible nations like Libya, Iraq, Ukraine, Syria, and by proxy Yemen. The USMilitary appears formidable against undeveloped nations, seeking to destroy their infra-structure and their entire economies, in pursuit of the common Langley theme of destabilization. In the process, the USMilitary since the Korean War has killed 25 million civilians, a figure receiving increased publicity. The Eastern nations and the opponents to US financial hegemony will not tolerate the abuse any longer. They have been organizing on a massive scale in the last several years. Ironically, the absent stability can be seen in the United States after coming full circle. The deep division of good versus evil, of honest versus corrupt, of renewed development versus endless war, has come to light front and center within numerous important USGovt offices and agencies.
The shape of the US nation will change with the loss of the USDollar’s status as global currency reserve. The starting point for the global resistance against the King Dollar was 9/11 and the onset of the War on Terror. It has been more aptly described as a war of terror waged by the USGovt as a smokescreen for global narcotics monopoly and tighter control of USD movements. Then later, following the Lehman failure (killjob by JPMorgan and Goldman Sachs) and the installation of the Zero Interest Rate Policy and Quantitative Easing as fixed monetary policies, the community of nations has been objecting fiercely. The zero bound on rates greatly distorted all asset valuations and financial markets. The hyper monetary inflation works to destroy capital in recognized steps. These (ZIRP & QE) are last ditch desperation policies designed to enable much larger liquidity for the insolvent banking structures. Without them, the big US banks would suffer failure. They also provide cover for the amplified relief efforts directed at the multi-$trillion derivative mountain. In no way, can the global tolerate unbridled monetary inflation which undermines the global banking reserves.
This post was published at GoldSeek on 26 December 2017.
‘Tis the season to determine who’s been naughty or nice. I’ll give you the facts, then you decide.
This holiday story is about an SEC investigation that ended in May 2017. It was wrapped in plain, brown paper and just found under our tree, opened by Probes Reporter (‘Independent Investment Research Focused on Public Company Interaction with the SEC’) and Dealbreaker.
The three major players in this holiday tale are Tesla Inc. (Nasdaq: TSLA), Goldman Sachs Group Inc. (NYSE: GS), and the SEC itself.
What makes this a holiday story is that it’s about gifting. Who gifted what to whom, how much, and, most importantly, why.
You decide who’s naughty: Goldman Sachs, Tesla, the SEC, or all of the above?
Here are the unwrapped details…
What Tesla Knew vs. What Tesla Did
The story starts back on May 7, 2016. That’s when a Tesla Model S electric car in partial, self-driving autopilot mode plowed into the side of a truck on a divided highway in Florida, killing the driver of the Tesla.
Tesla brass found out about the crash that day but didn’t alert regulators until May 16, nine days later.
This post was published at Wall Street Examiner on December 22, 2017.
‘Shadow margin’ is a hot business for brokers. Now they’re licking their wounds. When the bankers of Christo Wiese, the former chairman and largest shareholder of Steinhoff International Holdings – a global retail empire that includes the Mattress Firm and Sleepy’s in the US – went to work on December 6 in the epic nothing-can-go-wrong calm of the rising stock markets, they suddenly discovered that much of their collateral for a 1.6-billion margin loan they’d made to Wiese had just evaporated.
Citigroup, HSBC, Goldman Sachs, and Nomura had extended Wiese this ‘securities-based loan’ in September 2016. His investment vehicles pledged 628 million of his Steinhoff shares as collateral, at the time worth 3.2 billion. He wanted this money so he could participate in a Steinhoff share sale in conjunction with the acquisition of Mattress Firm and Poundland, essentially borrowing against his Steinhoff shares to buy more Steinhoff shares.
This loan forms part of the $21 billion of debt associated with Steinhoff that global banks are exposed to.
But that December 6, the shares of Steinhoff plunged 64% to 1.07 on the Frankfurt stock exchange after the company announced the departure of the CEO and unspecified ‘accounting irregularities requiring further investigation.’
This post was published at Wolf Street on Dec 19, 2017.
It’s not just the ultra rich, as well as a dazed and confused Bob Corker who is set to reap a $1+ million windfall from the passage of a tax bill which he opposed until just days ago, who will benefit from the passage of tax reform: according to Goldman Sachs among the biggest beneficiaries from the GOP tax cuts are, drumroll, the big banks. In an analysis from Goldman’s Richard Ramsden, the FDIC-insured hedge fund writes that based on its “preliminary analysis of the current tax bill under consideration by Congress, our EPS estimates for our coverage would increase by 13% on average if the US statutory rate were to be reduced to the proposed 21%, all else being equal.”
proposed tax changes (e.g., the base erosion tax, the DTA
and deemed repatriation), as well as the prospect of the bill itself
changing from the current proposal.
This is shown in the table below:
This post was published at Zero Hedge on Dec 18, 2017.
Goldman Sachs’ Sumana Manoghar, Hugo Scott-Gall, and Navreen Sandhu wax lyrical in their introduction to the 100 most interesting charts of 2017…
In this very special edition, straight from our hearts, We pro?le 100 of our best and most compelling charts. They tell the story of a changing world; and below it starts. But for now we’ll quickly run you through the major parts.
We begin with rising capex: Who is spending to defend? Is disruption overrated? Who else can Amazon upend? The potential in India? Can China’s overcapacity mend? Are people eating healthier? How do millennials spend?
We explore each of these themes and tell you how they link. We have some fun charts in here too. And surprises. Wink wink. We hope they join the thematic dots as you see them in sync, But most of all we hope that these charts make you think.
There are quotes, stats, and a crossword also in here, Plus a thematic poster to spread the holiday cheer. Let us know what you think and if anything is unclear, We’ll be back soon with more. Until then, Happy New Year.
This post was published at Zero Hedge on Dec 16, 2017.
Goldman Sachs continues to ratchet up predictions for commodities, laying out a bullish case for commodities of all stripes in 2018.
The investment bank said that its forecast a year ago for higher commodity prices ‘played out much better than expected.’ The bank pointed to industrial metal prices, which are up 24 percent this year, plus the 13 percent increase in oil prices.
But looking forward, Goldman sees plenty of room to run. ‘The demand backdrop today is now even stronger than a year ago, with robust and synchronous global growth clearly evident,’ Goldman analysts, led by Jeffrey Currie, wrote in a December 11 research note. The extension of the OPEC deal also led the bank to revise up its forecast for oil prices, as inventories should continue to fall throughout 2018.
There are other reasons to be bullish on commodities. The investment bank argues that commodities tend to outperform other asset classes when central banks move to tighten rates. That is because rate hikes typically occur when demand is exceeding supply – the higher prices resulting from that mismatch are why central banks are trying to raise rates, but it is those higher prices that support the investment case into commodities.
The report concluded that “a positive carry in key commodity markets and already strong global demand growth across the commodity complex reinforces the case for owning commodities. And hence we maintain our 12-month overweight recommendation, now with a forecasted return of almost 10 percent.”
This post was published at FinancialSense on 12/15/2017.
One look at S&P futures this morning reveals an unchanged market, however it is again the violent sector rotation that is taking place behind the scenes that is the real story, with defensive sectors real estate, retail, food, utilities outperforming while investors continue to bail and book profits on tech stocks after sharp gains since the start of the year. Monday’s Nasdaq rout also spread to European and Asian markets which fall on last minute changes to the tax plan, most notably the retaining of AMT which could prevent companies from making use of intellectual property tax breaks, effectively raising their tax rates. As a reminder, on Monday the Nasdaq fell 1.2% following broad based hedge fund liquidation from the most crowded sector, after tax experts said Senate Republicans unwittingly passed a bill that would mean higher-than-intended taxes for technology firms and other corporations; in sympathy Europe’s Stoxx tech sector index SX8P hit the lowest since late September, down 8% since mid-November
European stocks dipped, trimming the previous session’s sharp gains amid a renewed selloff in tech stocks globally and as weaker industrial metal prices weighed on mining shares which slumped ‘due to a marked slowdown in China’s metal consumption growth, with market participants foreseeing weaker public infrastructure spending growth extending into 2018,’ SP Angel analysts including John Meyer, Simon Beardsmore and Sergey Raevskiy write in note.
The Stoxx 600 is down 0.2%, remaining in a range between its 50-DMA and 200-DMA started in mid-November. The Stoxx tech sector SX8P index falls 0.6%, mirroring a drop in the Nasdaq Monday. As noted above, Europe’s tec sector is down about 8% since a peak in early November, amid a sharp sector rotation out of momentum stocks and into potential winners of the U. S. tax reform. UK’s FTSE 100 outperforms peers amid the weaker pound which had briefly tripped through 1.34 as Brexit talks had been unravelled over disagreements from the DUP in regards to a hard border between Ireland and Northern Ireland. UK grocery retailers are among the top movers in the FTSE 100 after a positive note from Goldman Sachs. Elsewhere, to the downside, health care and material names lag.
This post was published at Zero Hedge on Dec 5, 2017.
As soon as President Trump put his Goldman boys, Gary Cohn and Steven Mnuchin, in charge of his tax plan, I knew Trump’s tax plan would never fulfill his and his henchmen’s promises of helping the middle class and of not giving additional tax breaks to the rich. The Trump Tax plan, as it now exists, proves those conjoined promises to be the greatest lie Trump ever told.
After two decades with Goldman Sachs, Munchkin (as he shall hereinafter be known for he lives on the Goldman-bricked road) bought his own bank, IndyMac. He renamed it OneWest and turned it into a mega repo machine in 2009, whirring out hyuuge amounts of crash cash during the Great Recession. His revamped bank set a speed record for putting homeowners out on the street, foreclosing one home every thirty seconds. A vice president of OneWest even admitted in court she shortened her signature so that she could spend less than thirty seconds processing each foreclosure. As a result of this rush to foreclose, the court found the bank had frequently mishandled documents because it did not even read many of them before foreclosing.
Munchkin’s grim reaper of a bank closed its greedy grip on a whopping 35,000 homes during the Great Recession. The bank was even so unscrupulous as to instruct homeowners to stop making payments, ostensibly because it was going to modify the loans, but in reality in order to purify its argument for repossession. (For more on the Munchkin’s greed, read ‘U. S. Treasury Becomes a Laughing Stock.’)
This post was published at GoldSeek on 4 December 2017.
Forget Bitcoin (for a second) and look at the real markets.
Per Goldman Sachs research, current markets valuation for bonds and stocks are out of touch with historical bubbles reality: As it says on the tin,
‘A portfolio of 60 percent S&P 500 Index stocks and 40 percent 10-year U. S. Treasuries generated a 7.1 percent inflation-adjusted return since 1985, Goldman calculated — compared with 4.8 percent over the last century. The tech-bubble implosion and global financial crisis were the two taints to the record.’
Check point 1.
Now, Check point 2: The markets are already in a complacency stage: ‘The exceptionally low volatility found in the stock market — with the VIX index near the record low it reached in September — could continue. History has featured periods when low volatility lasted more than three years. The current one began in mid-2016.’
This post was published at True Economics on Nov 29, 2017.
While the prevailing outlook by the big banks for 2018 and onward has been predominantly optimsitic and in a few euphoric cases, “rationally exuberant“, with most banks forecasting year-end S&P price targets around 2800 or higher, and a P/E of roughly 20x as follows…
Bank of Montreal, Brian Belski, 2,950, EPS $145.00, P/E 20.3x UBS, Keith Parker, 2,900, EPS $141.00, P/E 20.6x Canaccord, Tony Dwyer, 2,800, EPS $140.00, P/E 20.0x Credit Suisse, Jonathan Golub, 2,875, EPS $139.00, P/E 20.7x Deutsche Bank, Binky Chadha, 2,850, EPS $140.00, P/E 20.4x Goldman Sachs, David Kostin, 2,850, EPS $150.00, P/E 19x Citigroup, Tobias Levkovich, 2,675, EPS $141.00, P/E 19.0x HSBC, Ben Laidler, 2,650, EPS $142.00, P/E 18.7x … there have been a small handful of analysts, SocGen and BofA’s Michael Hartnett most notably, who have dared to suggest that contrary to conventional wisdom, next year will be a recessionary, bear market rollercoaster.
And then, there are those inbetween who expect a good 2018, but then all bets are off in 2019. Among them is JPM’s chief economist Michael Feroli who has published a special report, aptly titled “US outlook 2018: Eat, drink, and be merry, for in 2019…”
Here are the seven main reasons why JPM believes that the party will continue until December 31, 2018 or thereabouts:
Growth momentum at the end of 2017 is solid and global headwinds are unusually mild
This post was published at Zero Hedge on Nov 28, 2017.
When it comes to the most influential investment bank in the world, Goldman Sachs, its 2018 outlook is borderline euphoric despite the bank’s own explicit admission that valuations have never been higher. In a tortured, goalseeked analysis which we discussed last week, the bank’s chief equity strategist David Kostin said that he expects a year of ‘rational exuberance’ catalyzed by the Trump tax cuts becoming law (some time in early 2018), leading to an upward revised year-end S&P price target of 2,850 (from 2,500 previously) and rising to 3,100 by 2020 (Kostin’s ‘irrationally exuberant’ parallel universe sees the S&P rising above 5,000 as the equity bubble repeats the events of the late 1990s – more here).
Naturally, the chief strategist concedes that all bets are off should Trump fail to pass tax reform (or even a far less comprehensive corporate tax cut program), and the S&P is likely to tumble to 2,400 from its current all time high level above 2,600 (Kostin did not have a S&P forecast for outer years which does not implement Trump tax cut, suggesting that Goldman’s clients will be extremely disappointed, and angry, should Goldman’s 80% odds of GOP tax reform passing prove just a “little” off ).
What is more interesting, is that even in discussions of the future that do not include Goldman’s assumptions of legislative reform, or its explicit S&P forecasts, the bank is especially sanguine, and does not anticipate a bear market as a result of 2017 being a ‘goldilocks year’ in which the world enjoyed coordinated, synchronized global growth courtesy of over $2 trillion in central bank liquidity injections but without the matching increase in inflation, which coupled with a perverse collapse in global volatility…
This post was published at Zero Hedge on Nov 26, 2017.
U. S. Treasury Secretary Steven Mnuchin appears to have inaugurated a perpetual bring your wife to work day. It’s become so farcical that it frequently feels like the United States Treasury Department has morphed into a low-budget, badly scripted reality TV show where the female star is so out-of-touch that she must continually scurry about in her haute couture erasing the haughty things she has written about the little people on multiple continents. We’ll get to that shortly, but first some background:
It all started back on January 19 when actress and then fiance Louise Linton sat by her man during his Senate Finance Committee confirmation hearing to become U. S. Treasury Secretary. At the hearing, Democratic Senator Ron Wyden of Oregon had this to say about his repugnance to see Mnuchin fill the post as U. S. Treasury Secretary:
‘Mr. Mnuchin’s career began in trading the financial products that brought on the housing crash and the Great Recession. After nearly two decades at Goldman Sachs, he left in 2002 and joined a hedge fund. In 2004, he spun off a hedge fund of his own, Dune Capital. It was only a few lackluster years before Dune began to wind down its investments in 2008.
‘In early 2009, Mr. Mnuchin led a group of investors that purchased a bank called IndyMac, renaming it OneWest. OneWest was truly unique. While Mr. Mnuchin was CEO, the bank proved it could put more vulnerable people on the street faster than just about anybody else around.
This post was published at Wall Street On Parade By Pam Martens and Russ Marte.
The Bank of Italy, when it was headed at the time by Mario Draghi, knew Banca Monte dei Paschi di Siena SpA hid the loss of almost half a billion dollars using derivatives two years before prosecutors were alerted to the complex transactions, according to documents revealed in a Milan court.
Mario Draghi, now president of the European Central Bank, was fully aware of how derivatives were being used to hide losses. Goldman Sachs did that for Greece, which blew up in 2010. It is now showing that Draghi was aware of the problems stemming from a 2008 trade entered into with Deutsche Bank AG which was the mirror image of an earlier deal Monte Paschi had with the same bank. The Italian bank was losing about 370 million euros on the earlier transaction, internally they called ‘Santorini’ named after the island that blew up in a volcano. The new trade posted a gain of roughly the same amount and allowed losses to be spread out over a longer period. We use to call these tax straddles.
This post was published at Armstrong Economics on Nov 13, 2017.
The past few months have been a very nervous time at Goldman Sachs, and not just because Gary Cohn wasn’t picked to replace Janet Yellen as next Fed chair.
Back in September, Goldman strategist Peter Oppenheimer wrote that the bank’s Bear Market Risk Indicator had recently shot up to 67%, prompting Goldman to ask, rhetorically, “should we be worried now?” The simple answer, as shown in the chart below, is a resounding yes because the last two times Goldman’s bear market risk indicator was here, was just before the dot com bubble and just before the global financial crisis of 2008.
This post was published at Zero Hedge on Nov 10, 2017.