The history to Goldman Sachs is quite exciting. Being the premier investment firm in America thorough late 19th till now, it has played a crucial role in the world's financial system. Since it was too big, unavoidably, it suffered from the financial crisis a lot in 2008 and 2009.
Revenue: "Goldman Sachs saw its net earnings in the first three months of 2011 drop 21% from a year ago, to $2.74bn (£1.7bn)."
Stock: it certainly dropped a lot since the financial crisis. But, I suspect the stock because it could be artificial.
"Despite the 2007 subprime mortgage crisis, Goldman was able to profit from the collapse in subprime mortgage bonds in the summer of 2007 by short-selling subprime mortgage-backed securities."
And "on September 23, 2008, Berkshire Hathaway agreed to purchase $5 billion in Goldman's preferred stock, and also received warrants to buy another $5 billion in Goldman's common stock, exercisable for a five-year term. Goldman also received $10 billion preferred stock investment from the U.S. Treasury in October 2008, as part of the Troubled Asset Relief Program (TARP)."
It certainly has special relationship with government. "During 2008 Goldman Sachs received criticism for an apparent revolving door relationship, in which its employees and consultants have moved in and out of high level U.S. Government positions, creating the potential for conflicts of interest."
To be continued...
Jessy, your posts are always pleasure to read! Do you have some sympathy to their big size?) They got in trouble because of the same reasons they got too big - greed and dishonesty.) As we see they did not restructer after the crisis. So, they want to stay too big, that means to fool bigger number of people and have the federal money in case the go bankroupt.As one comedian said, if the company is small and fooled small number of people, it failed. but if they fooled big number of people, they received help from the taxpayers money.)
ReplyDeletewow Jesse! this was simply awesome!
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