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ΕΘΝΙΚΗ : 1,8 ΦΟΡΕΣ ΥΠΕΡΚΑΛΥΨΗ ΤΗΣ ΠΡΟΣΦΟΡΑΣ
650 εκατομμύρια ζεστά ευρώ, με υπερκάλυψη 1,8 φορές του στόχου, πέτυχε να βάλει στα ταμεία της τελικά η Εθνική Τράπεζα στην προσπάθειά της να ενισχύσει την κεφαλαιακή της επάρκεια με αύξηση κεφαλαίου για να αντέξει μια πιθανή “αναδιάρθρωση” προς τα κάτω των περουσιακών της στοιχείων. Περουσιακά στοιχεία που περιλαμβάνουν φυσικά και ομόλογα του Ελληνικού Δημοσίου που με το πιθανολογούμενο “κούρεμα” θα έθετε την Εθνική σε προβλήματα επάρκειας των κλασματικών αποθεματικών της.
Μία απολύτως αναγκαία και σωστά χρονισμένη στρατηγική κίνηση εν μέσω του παγκόσμιου νομισματικού χαρτοπόλεμου και κρίσης που μαίνεται, και της τοπικής θύελλας που πλησιάζει με την επερχόμενη παρέλαση των σκελετών που προβλέπεται να ανασύρει η Eurostat απο την ελληνοαμερικανική ντουλάπα των νεοταξιτών αλχημιστών της Goldman Sachs (και όχι μόνον) και τις σχετικές -αν της επιτραπούν-ανακοινώσεις που έχει εξαγγείλει επισήμως για τις 22 Οκτωβρίου.
Αναβρασμός επικρατεί και στις υπόλοιπες ελληνικές ιδιωτικές τράπεζες της λίστας που αντιμετωπίζουν το ίδιο πρόβλημα, και έχουν μάλιστα αναφερθεί μέχρι και ανεπιβεβαίωτες λυποθυμίες τραπεζιτών.
Οψόμεθα….
ΦΙΜΩΤΡΟ ΣΤΗΝ ΕΛΕΝΗ ΣΚΟΠΗ ΚΑΙ MAX KEISER
Max Κeiser Video: Συμφέρει την Γερμανία η κατάρρευση της Ελλάδας
* “…θέλουν την μετατροπή της Ελλάδας σε Ευρωπαϊκή Ντίσνεϋλαντ για τους τουρίστες… Απορώ που η Ελληνική κυβέρνηση δεν έχει δημοσιοποιήσει τις κρυφές συναλλαγές με την Goldman Sachs…”
Ο Μαξ Κάιζερ καταγγέλει την είσοδο της Ελλάδας σε μία νέα εποχή, χωρίς διαφάνεια, όπου το χρέος μετατρέπεται σε ανταλλάξιμα με γη ομόλογα. Δεν διστάζει στην συνέντευξή του ο κύριος Κάϊζερ, να απευθυνθεί υποτιμητικά απέναντι στους Έλληνες, αποκαλώντας τους “χωριάτες” που θα δώσουν μεγάλη χαρά στους χρηματιστές όταν αυτοί θα πάρουν το χριστουγεννιάτικό τους δώρο…
Παρακολουθήστε την τελευταία συνέντευξη, του ανθρώπου που εδώ και δύο χρόνια αναφέρεται στις εξελίξεις στην Ελλάδα, τις οποίες -δυστυχώς- βιώνουμε σήμερα. Τι ακολουθεί; Ο Μάξ Κάιζερ είναι αρκετά διαφωτιστικός…
…από την αγορά CDS, παίζοντας δηλαδή τη χρεοκοπία της Ελλάδας, η Γκόλντμαν υπολογίζεται ότι κέρδισε ένα έως τρια δισεκατομμύρια δολλάρια. Οι χρηματιστές της Γουώλ Στρητ σφυρίζουν αδιάφορα, δηλώνοντας στους δημοσιογράφους: “η δουλειά μας είναι να βγάζουμε λεφτά, όχι να σκεφτόμαστε τι θα συμβεί στους ¨Έλληνες πολίτες, δεν υπάρχει εξάλλου νόμος που να απαγορεύει να εκμεταλλευτείς τον μαλάκα” (δήλωση του Αμίτ Σαρκάρ, επικεφαλής αμερικανικού επενδυτικού ταμείου, Μαριαν, 20.2.2010)
Το διακύβευμα: υποδούλωση Ελλάδας, υποδούλωση Ευρώπης
Η Ελλάδα γίνεται προνομιακή δίοδος για τον έλεγχο της Ευρώπης και την εξασθένηση του ευρώ, προτού το ευρωπαϊκό νόμισμα καταστεί κύριο αποθεματικό. Επιδιώκεται επίσης να γίνει το νέο υπόδειγμα μιας Ευρώπης χωρίς κοινωνικό κράτος. Μέρκελ και Σαρκοζί άρχισαν να καταλαβαίνουν μόλις αυτό τον μήνα τι συμβαίνει και τις συνέπειες για την Ευρώπη και παραμένουν βασικά αμήχανοι (τουλάχιστον-ed) , παρόλο που έχουν εύκολες λύσεις, που περιγράφουν αρκετά έντυπα, όπως έκδοση ευρωομολόγων ή αγορά από την Κεντρική Ευρωπαϊκή Τράπεζα του ελληνικού χρέους, που θα τσάκιζε τα πόδια των κερδοσκόπων και θα τους ανάγκαζε να ξανασκεφτούν πολλές φορές πριν ξαναεπιτεθούν.
Βερολίνο όμως και Παρίσι παραμένουν δέσμιοι της ιδεολογίας και της αρχιτεκτονικής του ευρώ που τους εμποδίζει να αντιδράσουν με άλλο τρόπο, εκτός από το να απαιτούν περίπου την αυτοκτονία της ελληνικής κοινωνίας. Η Ευρώπη είναι εκ των ένδον υπονομευμένη, όπως αποδεικνύει η δραστηριότητα κατά της Ελλάδας της Ντώυτσε Μπανκ, της PNB Paribas, της Σοσιετέ Ζενεράλ και των ελβετικών τραπεζών στην αγορά CDS, αλλά και η στάση των αρμοδίων της Κομισιόν, των “ευρωπαίων ηλιθίων”, όπως τους αποκαλούν οι Γάλλοι. Η “παγκοσμιοποίηση” είναι φτιαγμένη από και για τους Αγγλοσάξωνες. ¨Οσο για το ελληνικό ζήτημα μοιάζει για ορισμένα τουλάχιστο γαλλικά έντυπα μια μάχη μεταξύ δημοκρατίας και ολοκληρωτισμού, όπως υποδεικνύει η Λιμπερασιόν δημοσιεύοντας, δίπλα-δίπλα, τη φωτογραφία της Βουλής των Ελλήνων και του ουρανοξύστη Goldman Sachs, της μεγαλύτερης τράπεζας του κόσμου που χρησιμοποιεί όλη της τη δύναμη εναντίον μιας μικρής ευρωπαϊκής χώρας… (Thank you Mr.President-ed)
απόσπασμα από το πλήρες σχετικό δημοσίευμα για την Goldman Sachs εδώ
GOLDMAN DOWN
original post here article αναδημοσίευση απο εδω
Friday, April 16, 2010
Goldman Sacked?
The Goldman fraud charge is obviously huge news.
The Connecticut Attorney general wants to file criminal charges: msnbc video
And New York might not be far behind.
Germany and other European nations and companies might also sue.
ProPublica points out that other major banks did the same thing as Goldman. Yves Smith points to one example:
The Wall Street Journal reports that Dutch bank Rabobank has filed a suit alleging that Merrill Lynch engaged in the same type of behavior as Goldman did with John Paulson, namely, devising a CDO on behalf of a hedge fund who was using it to take a short position, and not disclosing that fact to investors in the deal.
Shahien Nasiripour writes:
Securities fraud charges against Goldman Sachs are just the beginning as federal regulators and investigators comb through the wreckage of a fraud-induced recession, caused by a pervasive and systemic culture of deceit at Wall Street’s biggest firms, say Wall Street analysts.
Simon Johnson thinks “our Pecora moment” – where the powers-that-be are finally confronted, and the tide starts to turn – has arrived.
Are the prosecutions finally starting? Is the dam finally breaking? Has Goldman really been sacked?
Maybe.
But Tyler Durden thinks it’s all bread and circuses.
And as Mish points out (edited slightly for readability):
Here is a list of some of the things the SEC has ignored.
∙ 77 Fraud, Money Laundering, Insider Trading, and Tax Evasion Investigations Underway Regarding TARP
∙ Secret Deals Involving No One; AIG Coverup Conspiracy Unravels
∙ Questions Geithner Cannot Escape
∙ Time To Indict Geithner For Securities Fraud
∙ Bernanke Guilty of Coercion and Market Manipulation
∙ Paulson Admits Coercion; Where are the Indictments?
∙ Bernanke Suffers From Selective Memory Loss; Paulson Calls Bank of America “Turd in the Punchbowl”
∙ Let the Criminal Indictments Begin: Paulson, Bernanke, Lewis
***
Visit msnbc.com for breaking news, world news, and news about the economy
We need a complete ethics overhaul but we will not see it until people are thrown into prison and corporations have to choose which business they want to be in as opposed to the current state of affairs where anything for a profit is acceptable.
- Firms give advice based on how much profit the firms will make on it
- Firms trade their own books to the detriment of clients
- Firms make upgrades and downgrades after they take positions themselves
- Firms front-run trades
- Firms engage in dark pools
- Firms deemed too big to fail take advantage by upping leverage
- Firms like Goldman Sachs (which is nothing more than a giant hedge fund with no ethics) have access to Fed funds at low interest rates to do whatever the hell they please
Is someone finally standing up to the vampire squids of the world?
Or is this yet another p.r. stunt, where deals will be cut, some tens or hundreds of millions of dollars worth of fines imposed (a slap on the wrist for a behemoth like Goldman), a few low-level patsies will be convicted, and business as usual will continue?
Only time will tell …
6 comments:
Another P.R. stun…that’s it
Almost has to be a PR stunt, because if they follow this line of investigation to its logical (and legal) conclusion, they’re going to end up putting most of Wall Street, and about half of the past two presidential administrations, in prison.
Remember when Federal Prosecutor -Patrick Fitzgerald went after Carl Rove???
LOL, April Fools!!! It was all for show then, and this is all for show now.
GS is the PPT Obama cannot do without.
Shake hands with your master, and say hello to fascism for another generation of fools.
“…Simon Johnson thinks “our Pecora moment” – where the powers-that-be are finally confronted, and the tide starts to turn – has arrived.”
Well, if that tide has turned, it’ll be one helluva ride downward as the reciprocal response from the “big boys” ain’t gonna be pretty. Hold on to your hats.
This seems a dubious proposition. More likely tptb have descided to crash the stock market to raise the value of us bonds. It is a fabulous game, played by very bright people!
“Simon Johnson thinks “our Pecora moment” – where the powers-that-be are finally confronted, and the tide starts to turn – has arrived.”
Simon Johnson and his sidekick, Quack, offer the most misleading sort of tripe out there. Throughout the crisis, Johnson, at best a thorough-going system-supporting wuss, has always been just at the edge of meaningful criticism but never quite capable of acknowledging that the system has failed and is now utterly irremediable. “Pecora moment”, Pecschmora moment. We’ll have the same kind of “turning of the tide” that we had “health care reform” with the recently passed Insurance Company Idemnity Act. Johnson needs to quit exploiting the crisis with his TV appearances and book writing. I’ll believe his personal “Pecora
Moment” has come when he helps organize a general strike.
Andrei Vyshinsky
and what about Goldman Sachs shady -to say the least- involvelment in Greece’s engineered financial enslavement to the global money masters?
http://plus.cnbc.com/rssvideosearch/action/player/id/1429600966/code/cnbcplayershare
older posts on Goldman Sachs and here
αναδημοσίευση απο Ναυτεμπορική εδω
Η Επιτροπή Κεφαλαιαγοράς της Γουόλ Στριτ άσκησε δίωξη την Παρασκευή κατά του οίκου “Goldman Sachs”, με την κατηγορία ότι στην εξέλιξη της διεθνούς οικονομικής κρίσης του 2008, που αναστάτωσε πολλές ανεπτυγμένες οικονομίες, “εξαπάτησε πολλούς επενδυτές” του.
Συγκεκριμένα, ο οίκος κατηγορήθηκε ότι “σε συμπαιγνία” με μεγάλο “αμοιβαίο κεφάλαιο αντιστάθμισης κινδύνων” –αυτό του πρώην υπουργού των Οικονομικών Πώλσον-επιχείρησε με τρόπο ανορθόδοξο να σώσει τα κεφάλαια από πολλά δικά της στεγαστικά δάνεια στο χώρο της κλυδωνιζόμενης (τον Οκτώβριο 2008) αμερικανικής αγοράς ακινήτων, την ώρα που σαυτήν την αγορά διακινούντο αθρόα τραπεζικά δάνεια, με υψηλά επιτόκια, αλλά με αποδέκτες πιστωτές μ αμφίβολη πιστοληπτική ικανότητα.
“Αυτή δε η συμπαιγνία έγινε εν πολλοίς σε βάρος των συμφερόντων των επενδυτών” του ανωτέρω οίκου(…) που “παρουσίαζε στους επενδυτές του το ως άνω αμοιβαίο κεφάλαιο ως “ουδέτερο”, προερχόμενο από “αδιάβλητη τρίτη πηγή”(…) “ενώ στην πραγματικότητα ήταν δικό του”–επιλήψιμο–, πρόσθεσε η αμερικανική Επιτροπή Κεφαλαιαγοράς στη μηνυτήρια αναφορά της.
“Θα εκδικαστεί αυτή η υπόθεση, η πρώτη δίωξη που είναι σχετική με τη μεγάλη οικονομική κρίση του 2008, ενώπιον δικαστηρίου της Νέας Υόρκης”, αναφέρουν οικονομικοί σχολιαστές που μιλούν το Σαββατοκύριακο στα μμε της Νέας Υόρκης.
Αισθητή κάμψη γιά την μετοχή
Οι ραγδαίες εξελίξεις συμπαρέσυραν καθοδικά τους βασικούς δείκτες πολλών χρηματιστηρίων στη δυτική Ευρώπη, στα “κλεισίματα” της Παρασκευής, ενώ είχαν σαφώς ανασταλτικό χαρακτήρα στη συνεδρίαση της ίδιας ημέρας στη Γουόλ στριτ.
Η τιμή της μετοχής του οίκου υποχώρησε στη διάρκεια της συνεδρίασης ως και -12%, όπως σχολίασαν πολλές συναλλασσόμενες πηγές.
“Αστήρικτες νομικά και αθεμελίωτες” χαρακτήρισε, το Σάββατο, ο ανωτέρω οίκος σε μία πρώτη αντίδρασή του αυτήν την επίσημη κατηγορία σε βάρος του.
Ο Μπερνάνκι για τα “swaps” του 2.000 και του ’01 Υπενθυμίζεται, τέλος, ότι ο διοικητής της κεντρικής ομοσπονδιακής τράπεζας των ΗΠΑ, της Fed, Μπεν Μπερνάνκι τόνισε –στη διάρκεια της εβδομάδας καταθέτοντας στο Κογκρέσο– πως η “Goldman Sachs” “δεν παραβίασε καμμία νομοθεσία, βοηθώντας την Ελλάδα να μειώσει το επίπεδο του δημόσιου ελλείμματός της στις αρχές της δεκαετίας του 2000” με την διαδικασία των “swaps” (νόμιμη ανταλλαγή υποχρεώσεων μεταξύ συμβαλλομένων).
«Εξετάσαμε τις συμφωνίες της Goldman Sachs με την Ελλάδα. Ανακαλύψαμε πως το 2000 και το 2001 υπογράφηκε συμβόλαιο, του οποίου το αποτέλεσμα ήταν να μεταβληθεί κατά τι το επίπεδο του χρέους και το ποσοστό του ελλείμματος που η Ελλάδα ανακοίνωνε” στην Eurostat τόνισε ο επικεφαλής της Fed ενώπιον της μεικτής Οικονομικής επιτροπής του Κογκρέσου.
αναδημοσίευση απο το Βημα εδω
Το κόλπο της Goldman Sachs με τον Τζον Πόλσον
Οι αμερικανικές αρχές κατηγορούν την τράπεζα ότι εξαπάτησε τους πελάτες της με δομημένα προϊόντα ΓΙΩΡΓΟΣ ΤΣΙΑΡΑΣ | Κυριακή 18 Απριλίου 2010
Διαβάστε περισσότερα: http://www.tovima.gr/default.asp?pid=2&ct=16&artId=326513&dt=18/04/2010#ixzz0lTonv1CH
Σάλο στις αγορές παγκοσμίως προκάλεσε η ποινική δίωξη που κατέθεσε την Παρασκευή η Επιτροπή Κεφαλαιαγοράς των ΗΠΑ (SΕC) σε βάρος του επενδυτικού κολοσσού Goldman Sachs: μιας τράπεζας πραγματικού «κράτους εν κράτει» στην Αμερική. Εχει μάλιστα ιδιαίτερο ενδιαφέρον ότι «συνεταίρος» της Goldman (και) στην προκειμένη περίπτωση είναι ο γνωστός μεγαλοκερδοσκόπος Τζον Πόλσον, διαχειριστής του- ιδιαίτερα επιθετικού έναντι της Ελλάδας- hedge fund Ρaulson & Co.
Η τράπεζα κατηγορείται για συστηματική εξαπάτηση χιλιάδων επενδυτών της σε αγοραπωλησίες ενυπόθηκων «subprime» δανείων- των γνωστών «τοξικών» δανείων υψηλού ρίσκου που οδήγησαν στην κατάρρευση της αμερικανικής αγοράς ακινήτων και πυροδότησαν τη συνεχιζόμενη παγκόσμια χρηματοπιστωτική κρίση. Οπως προκύπτει, η τράπεζα δημιούργησε (κατά παραγγελία του Πόλσον, ο οποίος φέρεται να «προκατέβαλε» 15 εκατ. δολάρια) ένα πολύπλοκο subprime «προϊόν» με την επωνυμία Αbacus, το οποίο προώθησε στους πελάτες της- μόνο και μόνο για να επιτρέψει στη συνέχεια στον Πόλσον να ποντάρει στην κατάρρευσή του, «σορτάροντάς» το, για να αποκομίσει τεράστια κέρδη! Επιπλέον, κατηγορείται ότι πούλησε το προϊόν σε πελάτες χωρίς να τους ενημερώσει ότι τα χρήματά τους επενδύονταν σε subprimes. Αν και ο Πόλσον (ακόμη) δεν διώκεται, πρόκειται αναμφίβολα για μια κλασική συμπαιγνία των δύο οίκων σε βάρος των επενδυτών της Goldman, οι οποίοι φέρονται να έχασαν πάνω από 1 δισ. δολάρια, όταν οι «Αβακες» έχασαν το 99% της αξίας τους: «Τα επενδυτικά προϊόντα ήταν περίπλοκα και καινοφανή, αλλά η απάτη απλούστατη και αρχαία» αναφέρει χαρακτηριστικά η SΕC.
Η προσφυγή εναντίον της Goldman Sachs προκάλεσε σεισμό στο χρηματιστήριο της Wall Street, όπου η μετοχή της τράπεζας υποχώρησε πάνω από 15%, αλλά και διεθνώς, αφού αποτελεί ουσιαστικά- έστω και με μεγάλη καθυστέρηση- τη σημαντικότερη απόπειρα απόδοσης ευθυνών από το αμερικανικό Δημόσιο για την κατάρρευση στον στεγαστικό τομέα.
Ο σκοτεινός ρόλος της Goldman, όπως βεβαίως και άλλων τραπεζών, στην αγορά «δομημένων» προϊόντων και τιτλοποιημένων χρεών εν γένει, δεν ήταν βέβαια άγνωστος στη χρηματoοικονομική «πιάτσα». Λίγοι όμως περίμεναν ότι η κυβέρνηση του Μπαράκ Ομπάμα θα προχωρούσε στη δίωξή της. Και αυτό γιατί η κυβέρνηση όχι μόνο στελεχώνεται από πλήθος πρώην τραπεζιτών της Wall (με προτίμηση στη Citigroup, σε αντίθεση με εκείνη του Τζορτζ Μπους, που έβριθε στελεχών της Goldman), αλλά υπήρξε και αποδέκτης τεράστιων προεκλογικών εισφορών από τον τραπεζικό κλάδο.
Διαβάστε περισσότερα: http://www.tovima.gr/default.asp?pid=2&ct=16&artId=326513&dt=18/04/2010#ixzz0lTohslzC
…και για το τέλος, ξανά το ολ ταιμ κλάσικ -πλέον- βίντεο του Μαξ Κάιζερ, αφιερωμένο στους εν Αθήναις κ.κ. “ελεγχτάς” και συνεργάτες του ΔΝΤ/ΕΚΤ/Bundesbank/Goldman Sachs και Σια Ε.Ε.
Ο ΧΡΥΣΟΔΑΚΤΥΛΟΣ ΓΚΟΡΝΤΟΝ ΜΠΡΑΟΥΝ & Co
Max Keiser Report @ RT.
Στο καινούργιο ρεπορτάζ του Ρώσικου τηλεοπτικού σταθμού Russia Today, ο Μάξ Κάιζερ υπενθυμίζει το μυστηριώδες ξεπούλημα του μισού Βρεττανικού αποθεματικού χρυσού -400 τόνους- την εποχή που ήταν υπεύθυνος υπουργός των Οικονομικών ο σημερινός πρωθυπουργός Γκόρντον Μπράουν στα 290 δολλάρια/ουγγιά!!!
( Σημερινή – φυσικά μοχλευμένη – τιμή +>1100 δολλάρια/ουγγιά, αληθινή γύρω στα 2500).
Η Αγγλική οικονομία, ενα ακόμα θύμα του δικού της City και της Wall Street, έτοιμη να σκάσει με τρομερές δανειακές ανάγκες στο χείλος του οικονομικού γκρεμού βαδίζει προς “εκλογές”. Οποια κυβέρνηση και να προκύψει, τα οικονομικά προβλήματα της Αγγλίας είναι τεράστια…
….επίσης την νέα παγκόσμια υπερ-φούσκα που βρίσκεται καθ’οδόν, το κύριο ομολογιακό “χάρτινο” νέο προιόν της “πράσινης” οικονομικής “ανάπτυξης” που στηρίζεται απο τους οικολόγους υπέρμαχους της μεγαλύτερης απάτης, της “τρομοβλακείας του θερμοκηπίου” και του “φόρου με ομόλογα του …διοξειδίου του άνθρακα”…
Κύριοι πωλητές και αγοραστές της νέας φούσκας, όπως πάντα, ποιοι άλλοι παρά οι gold fingers και τα golden boys της Goldman Sachs…
O MAX KEISER ΣΕ ΕΚΡΗΞΗ, GREEK SUBS
Σε συνέχεια απο προηγούμενο άρθρο εδω, η συνέντευξη-βόμβα του Max Keiser με ελληνικούς υπότιτλους…
Talking Heads – Burning Down The House
http://mediaservices.myspace.com/services/media/embed.aspx/m=3740429,t=1,mt=video
EUROZONE IMPLODING?
The German Finance Minister Needs To Confront Investment Banks
Cross-posted from The Baseline Scenario.
By Simon Johnson
Wolfgang Schauble, German finance minister, has a surprisingly sensible op ed in today’s Financial Times. As we suggested yesterday, first the relevant Europeans should decide if they want to keep the euro – more precisely, who stays in and who leaves the currency union – then policy must be adjusted accordingly.
Mr Schauble is obviously correct that existing economic self-policing mechanisms are badly broken; the eurozone can only survive if there are effective monitors and appropriate penalties for fiscal and financial transgression. He is also right to fear that involving the IMF in Greece would necessarily give the Fund greater rights to kibbitz on European Central Bank monetary policy. Given the fear and loathing expressed for the IMF’s “4 percent inflation solution” (or is it 6 percent?) in eurozone policy circles, you can see why this gives the Greek prime minister some bargaining power – the Germans will do whatever it takes to keep him away from the IMF in the short-term.
But Schauble misses (or holds back for now) on a potentially important point vis-a-vis investment banks.
He is tough, towards the end of his piece, on countries that “intentionally breached European economic and monetary law.” But what about banks that aid and abet countries that are trying to break the rules?
(see Deutsche Bank @ Goldman Sachs & FED)
Of course, governments can always massage their statistics unassisted. But when international banks help countries to disguise their true debt levels, through off-balance sheet transactions, what is the difference between that and what Merrill Lynch did for Enron regarding “Nigerian oil barges” (and more)?
Technically, Greece’s (and potentially other country’s) debt deals may not have broken any laws – because the international space for these transactions is so anarchic.
But Mr Schauble would be well within his rights to call for rogue investment banks – i.e., those that help break European rules in any fashion – to be banned from the highly lucrative market for European government new issues.
Of course, if he is afraid to do this because the banks in question have great market power and a fearsome reputation for sharp elbows and exacting revenge, perhaps Mr. Schauble should consider referring the broader investment banking market (including over-the-counter derivatives) to the relevant anti-monopoly authorities within the European Commission…
THE CDS PLANET
Διαβάσαμε εδω & εδω
PART A
A banker’s perspective of the Greece derivatives debt dodge
By Edward Harrison of Credit Writedowns.
Last week, Yves wrote her perspective on the Goldman-Greece cross currency swaps. Here’s a slightly different take. Comments are appreciated.
By now, you know about the much-discussed swaps that Greece used to conceal it’s debt load. While the amount of debt concealed is low relative to the total, the mere fact that Greece attempted to conceal its true fiscal position is damning in light of revelations in October that the government’s fiscal hole for 2009 is three times the original April estimate.
The problem is, in a word, credibility. Greece now has none – and this is why its bond yields have skyrocketed.
But what about the investment bankers like Goldman Sachs who helped Greece in its machinations – aren’t they to be vilified as well. What do we do about them? I was thinking about that after an interview I did this morning on Canada’s Business News Network (see clip here).
Last week, we got some pretty pointed views on this subject. Felix Salmon says “Goldman is a scapegoat.” Yves Smith takes a more negative view of Goldman’s culpability. So I decided to take a different tack and share some thoughts with you on how investment bankers think – and how it may have led to this. I am using this term ‘Investment Banker’ generically to refer to financial staff at broker-dealers whether they work in a sales & trading or an advisory role. This distinguishes the I-Banker from a commercial banker where incentives are somewhat different.
The first thing you have to realize about investment bankers is that it’s all about the money. Now I’m not talking about a greed is good mentality here. I’m referring to money as validation for achievement, success and self-worth.
Corporate hierarchies
In a normal corporate environment, there is a strict hierarchy in which those at the top earn more than those at the bottom. In order to rise to the top (and earn the salary and huge bonus – I might add), one needs to be considered successful. And that means putting in years of effort for which one receives performance reviews.
If you do well on these reviews, you might even receive accolades, awards and so on – the point being you are a rising star with talent. So you get promoted. “The way you’re going, you might even rise to CEO one day!” That’s the kind of praise you might hear. So the whole hierarchical apparatus is designed to align high achievement with other external signs of success: good evaluations, promotions, more money, more responsibility, more underlings, larger budgets, awards, and accolades and so on. All you need to do is look at an org chart and you get a pretty good sense of who’s supposed to be the stars. And by the way, this is how it works in commercial banking as well.
Investment banking hierarchies
But, that’s not how it works in investment banking at all. When one deal or a series of trades can mean billions in profit, even a relatively junior person can have influence on the bottom line far beyond what her title suggests. This is certainly true in the advisory business, but it is even more true in trading – especially proprietary trading, a major reason that proprietary trading is inherently risky and would be restricted under the Volcker Rule. By the way, this is also a major reason that investment banks that are public companies and not partnerships are risky companies with notoriously poor managers.
A slovenly 32-year old junior trader with terrible social skills, zero management ability and no one reporting to him can make millions of dollars a year. He’s the guy you read about in the newspaper making three times the CEO’s salary. He’s the guy that all the other firms are trying to poach. And he’s the guy that used to be referred to admiringly as a “big swinging dick.” You don’t see that at Acme Incorporated. That’s what I mean when I say it’s all about the money. You learn very quickly in investment banking that status is not all about the titles, it’s more about the money.
Read any account from investment banking like Predator’s Ball or Liar’s Poker you will quickly notice that even the higher level guys are driven to earn a lot of money, not only for the money itself but for what that money says about their status and value relative to their peers.
Advisory business
So, with that in mind, let’s think about the advisory business, Goldman Sachs and the infamous cross-currency swaps. The advisory business is more hierarchical than the sales & trading side of things. But, you can still make a shed load of cash by doing the right deals and being on the right team. Most people in the advisory business work in product or industry groups like Technology or Industrials or Structured Products. In those groups you have some professionals who are product experts while others are relationship managers.
Now, as an individual, your ostensible goal is to serve your clients by giving them the best advice on financial products and transactions to fit their short- and long-term goals. The payoff comes in the form a fee for capital raised, a merger completed or a financial transaction completed. The reality is you as an individual make more money – and hence have higher status – the more transactions you do, the more complex and bigger the deals you do.
So, as an individual there are two major conflicts you might have with your client.
- If your client wants to do a deal that you don’t think is advisable or ethical; or if you uncover damaging information about your client that makes you believe the terms of a deal need to be altered.
- If you can arrange a deal that you believe is not in your client’s best interests but which earns your company more money.
In the case of the cross currency swaps, all available evidence says that the Greeks were actively looking for ways to reduce their apparent fiscal debt levels and deficit numbers without having to reduce spending or raise taxes. It’s called having your cake and eating it too.
So, I imagine Goldman and other banks each had conversations with the Greek government about the government’s financial advisory needs. The Greeks probably said they wanted to have their cake and eat it too and asked if the investment bankers could help them. Now Goldman had a very good relationship manager in the form of Antigone Loudiadis, who had done valuable service for Greece before and had good contacts with the client (exactly what you want in a relationship manager). According to the Wall Street Journal:
Guided by Ms. Loudiadis in the 1990s, Goldman set up a series of currency “swap” trades for Greece, enabling the country to use favorable exchange rates to record some of its debts. By 2001, when those rates had become unattractive, Ms. Loudiadis helped Greece structure a different trade that enabled the government to continue using advantageous rates for accounting purposes.
So, there’s the basis of what occurred. All of this is well within the norm.
An alternate view of the deals
But, here’s the problem. There’s another way to look at these deals. Here is the definitive take from a 2003 article in Risk magazine, pointed out by Felix Salmon. I have bolded parts I want to stress:
Ever since the deficit and debt rules for eurozone member states were drawn up in the early 1990s, there have been persistent rumours and allegations that governments have used derivatives to get around them. For some time, economists have argued that the combination of strict external targets with considerable local autonomy in sovereign debt management almost inevitably leads high-deficit countries towards derivatives.
It is now widely known that since 1996, Italy’s Treasury has regularly used swaps transactions to optically reduce its publicly reported debt and deficit ratios. Such trades remain controversial, and were the subject of fierce debate in late 2001, when Italian academic Gustavo Piga published a paper accusing eurozone countries of ‘window dressing’ their public accounts using derivatives (Risk January 2002, page 17).
Now, Italy has been joined by the Hellenic Republic of Greece, as evidence emerges of a remarkable deal between the public debt division of Greece’s finance ministry and the investment bank Goldman Sachs. The deal is not only likely to reopen an old debate on public accounting for derivatives, but also sheds light on the way banks charge clients for taking credit and market risk exposure.
So, Italy played this game as far back as 1996. And, that’s the crux of the matter. As a banker, you never re-invent the wheel. If a deal works and makes lots of money, you shop that deal around to everyone you can until it doesn’t. If you don’t, your competitors will. I reckon bankers at Goldman were very excited that Greece wanted to do these deals – and I wouldn’t be surprised if other bankers did the deals or other countries still.
The deal structure
Risk does an excellent job of outlining the structure of the actual swaps.
The transactions agreed between the Greek public debt division and Goldman Sachs involved cross-currency swaps linked to Greece’s outstanding yen and dollar debt. Cross-currency swaps were among the earliest over-the-counter derivatives contracts to be traded, and have a perfectly routine purpose in debt management, namely to transform the currency of an obligation.
For example, an issuer with foreign fixed-rate debt might choose to lock in a favourable exchange rate move. To do this, it could swap a stream of fixed domestic currency payments for a stream of foreign currency ones, referenced to the notional of the debt using the prevailing spot foreign exchange rate, with an exchange of the two notionals at maturity. Because they are transacted at spot exchange rates, cross-currency swaps of this type have zero present value at inception, although the net value (and credit exposure of either counterparty) may subsequently fluctuate.[emphasis added]
Here’s the thing though. As an individual you will always come to a point where a client is you begging you to do something that is legal, makes lots of money for your company, but that you feel is unethical. There had to be a moment in this transaction here.
However, according to sources, the cross-currency swaps transacted by Goldman for Greece’s public debt division were ‘off-market’ – the spot exchange rate was not used for re-denominating the notional of the foreign currency debt. Instead, a weaker level of euro versus dollar or yen was used in the contracts, resulting in a mismatch between the domestic and foreign currency swap notionals. The effect of this was to create an upfront payment by Goldman to Greece at inception, and an increased stream of interest payments to Greece during the lifetime of the swap. Goldman would recoup these non-standard cashflows at maturity, receiving a large ‘balloon’ cash payment from Greece. [emphasis added]
You get that? Goldman had been doing swaps with Greece in anticipation of Euro entry. These transactions allowed them to take U.S. Dollar and Yen-denominated debt and transfer them into Euros at exchange rates which made the level of Yen/Dollar debt look lower until the swap transaction came due and Greece was forced to make a balloon payment to Goldman.
The morality of all this
What other purpose can these transactions serve other than to mask the true indebtedness of Greece? Did anyone actually break the law? If these are legal transactions, does Goldman Sachs have any responsibility inform the EU of the deals? Should Goldman’s bankers have refused Greece’s wishes, knowing that some other banker would collect the fees? Why does this matter now other than in regards to Greece’s credibility in future sovereign debt deals?
These are all good questions. But, the Wall Street Journal article gets to the heart of things and why the deals happened.
Even though the transaction occurred nearly a decade ago, it has come under scrutiny by European Union officials as they examine how Greece fell into such dire economic straits.
Ms. Loudiadis became a Goldman partner in 2000. A cerebral Oxford University graduate, she was eventually named co-head of the company’s investment-banking group in Europe, making as much as $12 million in annual compensation, according to someone familiar with the matter. She lives an exclusive neighborhood in West London known for its white stucco homes.
From a banker’s perspective, that’s what this is all about – money, and the status that goes with it….
PART B (This headline is from July 1, 2003…)
…with the help of Goldman Sachs, Greece has been using giant swaps deals to ensure its national debt ratios meet EU targets. But these deals are likely to prove controversial. By Nicholas DunbarGustavo Piga warned against it but the Greek chick, Antigone Loudiadis, highly respected of course, did it anyway…
With the help of Goldman Sachs, Greece has been using giant swaps deals to ensure its national debt ratios meet EU targets. But these deals are likely to prove controversial. By Nicholas DunbarGustavo Piga warned against it but the Greek chick, Antigone Loudiadis, highly respected of course, did it anyway…With the help of Goldman Sachs, Greece has been using giant swaps deals to ensure its national debt ratios meet EU targets. But these deals are likely to prove controversial. By Nicholas DunbarEver since the deficit and debt rules for eurozone member states were drawn up in the early 1990s, there have been persistent rumours and allegations that governments have used derivatives to get around them. For some time, economists have argued that the combination of strict external targets with considerable local autonomy in sovereign debt management almost inevitably leads high-deficit countries towards derivatives.It is now widely known that since 1996, Italy’s Treasury has regularly used swaps transactions to optically reduce its publicly reported debt and deficit ratios. Such trades remain controversial, and were the subject of fierce debate in late 2001, when Italian academic Gustavo Piga published a paper accusing eurozone countries of ‘window dressing’ their public accounts using derivatives (Risk January 2002, page 17). Now, Italy has been joined by the Hellenic Republic of Greece, as evidence emerges of a remarkable deal between the public debt division of Greece’s finance ministry and the investment bank Goldman Sachs. The deal is not only likely to reopen an old debate on public accounting for derivatives, but also sheds light on the way banks charge clients for taking credit and market risk exposure.Intended to rein in fiscal profligacy among aspiring eurozone entrants, the Stability and Growth Pact (SGP) – established in 1996 – sets two important targets for member states: a debt/GDP ratio of less than 60% and a deficit/GDP ratio of less than 3%. Of the two, the second is considered more important. Countries that show persistent breaches of the 3% target are liable to pay heavy fines to Brussels of up to 0.5% of GDP under the so-called Excessive Deficit Programme (EDP). Performing the key regulatory role of determining whether the targets have been met is the European Statistical Office (Eurostat). Greece, which joined the single currency in early 2001, resembles mid-1990s Italy in certain respects. Until recently it was a country of high deficits and high inflation, and for this reason did not bother joining the first wave of eurozone countries in 1998. In the run-up to joining the eurozone, Greek inflation and budget deficits fell sharply, and GDP grew as the incumbent socialist government pursued a policy of UK-style public-sector reform. However, like Italy, Greece’s debt/GDP ratio has remained high, at over 100%, and as a result its interest costs are the highest in the eurozone. In November 2001, the Greek finance ministry’s public debt division made a public statement about its debt management strategy. It acknowledged that its debt was a ‘critical macroeconomic parameter’, and pledged to reduce debt servicing costs by means that included ‘the extensive use of derivatives’. Apparently, this was not enough for Brussels. In February 2002, the European Commission pointed out future deficit forecasts by Greece relied ‘primarily’ on achieving reductions in interest costs. It called for Greece to reduce its ‘very high’ debt ratio, and to provide ‘more detailed information on financial operations’. Although Greece’s public debt division points out that it uses 18 derivatives counterparties, there is no doubt that the division, which is headed by Christopher Sardelis, has a particularly close relationship with Goldman Sachs. Indeed, the account has been handled personally at Goldman Sachs by Antigone Loudiadis, the London-based European head of sales for the firm’s fixed-income, currencies and commodities unit. Highly respected by other dealers, Loudiadis has enjoyed a successful career at Goldman, joining the firm’s partnership committee and attaining her present position in 2000. According to sources, by early 2002, Loudiadis and her team put together a deal aimed at alleviating Greece’s problem of debt ratios and high interest costs.The transactions agreed between the Greek public debt division and Goldman Sachs involved cross-currency swaps linked to Greece’s outstanding yen and dollar debt. Cross-currency swaps were among the earliest over-the-counter derivatives contracts to be traded, and have a perfectly routine purpose in debt management, namely to transform the currency of an obligation. For example, an issuer with foreign fixed-rate debt might choose to lock in a favourable exchange rate move. To do this, it could swap a stream of fixed domestic currency payments for a stream of foreign currency ones, referenced to the notional of the debt using the prevailing spot foreign exchange rate, with an exchange of the two notionals at maturity. Because they are transacted at spot exchange rates, cross-currency swaps of this type have zero present value at inception, although the net value (and credit exposure of either counterparty) may subsequently fluctuate. However, according to sources, the cross-currency swaps transacted by Goldman for Greece’s public debt division were ‘off-market’ – the spot exchange rate was not used for re-denominating the notional of the foreign currency debt. Instead, a weaker level of euro versus dollar or yen was used in the contracts, resulting in a mismatch between the domestic and foreign currency swap notionals. The effect of this was to create an upfront payment by Goldman to Greece at inception, and an increased stream of interest payments to Greece during the lifetime of the swap. Goldman would recoup these non-standard cashflows at maturity, receiving a large ‘balloon’ cash payment from Greece. Since neither Goldman nor Greece will comment on the deal, much of the details remain vague. It is not clear which exchange rates were used in the actual contracts. Under the terms of a similar ‘off-market’ deal transacted by Italy in 1997, the exchange rates prevailing at the time of the underlying bond issue were used, which would have made sense in the case of Greece since the deal happened after a period of euro strengthening against the yen and dollar. Although the overall deal is believed to have consisted of three or four individual transactions or tranches, according to sources, the total cross-currency swap notional was approximately $10 billion, with tenors ranging from 15 to 20 years. While the size of upfront payment to Greece’s public debt division is not clear, it seems the total credit risk incurred by Goldman Sachs was roughly $1 billion. Effectively, Goldman Sachs was extending a long-dated illiquid loan to its client. Goldman Sachs is known for its conservative approach to credit risk, and chose to hedge its exposure to Greece by immediately placing the risk with a well-known investor in sovereign credit: Frankfurt-based Deutsche Pfandbriefe Bank (Depfa). According to sources, Depfa entered into a credit default swap with Goldman Sachs, selling $1 billion of protection on Greece for up to 20 years. Depfa declined to comment. Total charge Details have also emerged of the way Greece’s public debt division was charged for the transaction. According to market sources, the total charge was approximately $200 million. This charge can be broken down into several components. First, Greece was charged for the credit risk in the transaction. Long-dated Greek government bonds were trading at a spread of 30 basis points in 2002. A billion-dollar investment in such bonds, purchased in asset swap form and held for 20 years, would yield about $60 million. According to Risk’s sources, Depfa demanded a substantial premium for taking on what was in effect an illiquid, privately placed loan. Second, Greece paid a principal risk charge to Goldman Sachs for its market risk exposure. Although standard euro/dollar and euro/yen cross-currency swaps are highly liquid instruments that trade at tight bid-offer spreads in the interbank market, such large, off-market transactions cannot be hedged in this market without significantly moving the price against the dealer. Goldman Sachs may have hedged some of the risk using futures, forwards and interest rate swaps, while retaining substantial cross-currency and interest rate basis risks in its portfolio. Of course, the ultimate profit and loss experienced by Goldman Sachs on the transactions remains unknown. Equally murky is the exact effect of Goldman Sachs’ transactions on Greece’s publicly reported national accounts. Since the deficit was a comfortable 1.2% of GDP in 2002, it is more likely that the cashflows were either used to help lower the debt/GDP ratio from 107% in 2001, to 104.9% in 2002 (by funding buybacks) or to lower interest payments from 7.4% in 2001 to 6.4% in 2002. But why did the large negative market value of the swaps not appear on the liability side of Greece’s balance sheet? The answer can be found in ESA95, a 243-page manual on government deficit and debt accounting, published by the European Commission and Eurostat in 2002. As revealed by Piga, the drafting of ESA95’s section on derivatives was the subject of fierce arguments between the government statisticians and debt managers of certain eurozone countries. The statisticians wanted derivatives-related cashflows to be treated as financial transactions, with no effect on deficit or interest costs, and with the derivatives’ current market value stated as an asset or liability. The debt managers opposed this, insisting on having the freedom to use derivatives to adjust deficit ratios. The published version of ESA95 reflects the victory of the debt managers in this argument with a series of last-minute amendments.In particular, ESA95 states in a page-long ‘clarification’ that ‘streams of interest payments under swaps agreements will continue… having an impact on general government net borrowing/net lending’. In other words, upfront swap payments – which Eurostat classifies as interest – can reduce debt, without the corresponding negative market value of the swap increasing it. According to ESA95, the clarification only covers ‘currency swaps based on existing liabilities’. There is no doubt that Goldman Sachs’ deal with Greece was a completely legitimate transaction under Eurostat rules. Moreover, both Goldman Sachs and Greece’s public debt division are following a path well trodden by other European sovereigns and derivatives dealers. However, like many accounting-driven derivatives transactions, such deals are bound to create discomfort among those who like accounts to reflect economic reality. For example, the Greece-Goldman deal may be of interest to credit rating agency Standard & Poor’s, which upgraded Greece’s long-term debt from A to A+ in June 2003. Among other derivatives dealers, the deal is bound to create envy at Goldman Sachs’ skill in solving the risk management needs of such an important client. As long as the current Eurostat rules do not change, the use of derivatives in deficit and debt management by eurozone sovereigns is likely to flourish. The planned expansion of the eurozone to include 15 east European countries may lead to especially rich pickings for dealers able to seize such opportunities.http://www.risk.net/risk-magazine/feature/1498135/revealed-goldman-sachs-mega-deal-greece
Sources
Revealed: Goldman Sachs’ mega-deal for Greece – Risk magazine
Also see Tim Iacono’s piece “Playing up to the edge of the line.”
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