Friday, October 31, 2014
Thursday, October 30, 2014
Saturday, October 25, 2014
Thursday, October 23, 2014
Saturday, October 18, 2014
Wednesday, October 8, 2014
Libyan Fund Scores in Legal Wrangle With Goldman Sachs
London-The Libyan Investment Authority has compelled Goldman Sachs to reimburse it for legal costs it incurred when the financial services titan tried in August to have the LIA's one billion dollar lawsuit against it resolved at a summary trial,instead of at a full hearing.The presiding judge found after a two-day hearing that Goldman should never have submitted the application for summary judgement.In consequence,Goldman must now fork over at least 200,000 pounds to the LIA for its expenses-and possibly as much as 680,000 pounds.
The full hearing on the case will likely begin in 2016.*
The LIA,a sovereign wealth fund,alleges that Goldman Sachs took them for a complete ride.It exploited the LIA and its ignorant staff by encouraging them to make nine very risky investments of over one billion dollars that ultimately failed.Goldman bribed the staff with luxury gifts such as a junket to Morocco with heavy drinking and girls,as well as expensive nights out on the town in London.
Goldman responds that it simply offered small gifts to cement a strategic partnership with key LIA staff,who were actually quite experienced international bankers.In fact,the transactions in question were relatively straightforward and easy to understand,and the investments would have succeeded in more favourable market conditions,Goldman Sachs pointed out.*
Goldman Sachs(GS)
The full hearing on the case will likely begin in 2016.*
The LIA,a sovereign wealth fund,alleges that Goldman Sachs took them for a complete ride.It exploited the LIA and its ignorant staff by encouraging them to make nine very risky investments of over one billion dollars that ultimately failed.Goldman bribed the staff with luxury gifts such as a junket to Morocco with heavy drinking and girls,as well as expensive nights out on the town in London.
Goldman responds that it simply offered small gifts to cement a strategic partnership with key LIA staff,who were actually quite experienced international bankers.In fact,the transactions in question were relatively straightforward and easy to understand,and the investments would have succeeded in more favourable market conditions,Goldman Sachs pointed out.*
Goldman Sachs(GS)
Thursday, October 2, 2014
Wednesday, October 1, 2014
Prominent Economist Pens New Financial Crisis Book
Discussing his new book "The Shifts and the Shocks:What We've Learned-And Still Have To Learn-From The Financial Crisis,"former World Bank senior economist and current Financial Times columnist Martin Wolf said one of the lessons learned is how much can be hidden away in the strange crevices.Today there is more capital in the system than in 2008;there is a very chastened mood;some deleveraging of economies has occurred;the mood is a little bit of recurring optimism.That doesn't mean it can't become more fragile again.
The staggering complexity of the financial system made it difficult to foresee the crisis of '08-such as the shadow banking system,particularly in housing finance.Loans were packaged by intermediaries into very complex securities parceled out into tranches of risk.Huge new pools of investors bought these securities.These were replacements for the old,simple banking system.The whole thing started to be a house of cards.*
The regulators should have seen there was no single,overarching US regulator.The Fed thought there were no huge risks:these were grownups who could understand the risks they were creating,the Fed thought;but the capital structure encouraged people to hide the risks.*
The US economy now is roughly a sixth smaller,so getting inflation above the target is going to be particularly hard.It's very important to avoid deflation,so you have to keep rates low until the economy really recovers.Nobody wants to lend anymore.Banks only want to lend to people who won't spend it.There's no point in that.The fiscal position has tightened dramatically.The demand side of the US economy remains incredibly weak,meaning the world's economy is also.
The monetary policy might tighten a bit,but I think short term rates will not tighten to what we consider normal for a very long time.Ultimately we are headed for another financial crisis;the system isn't reformed enough.Here in the US,it won't be in this decade;I would be concerned about succeeding decades.The risks are there that,as soon as recovery starts,people will start borrowing again,and the structures for that are there,author Martin Wolf observed.
The staggering complexity of the financial system made it difficult to foresee the crisis of '08-such as the shadow banking system,particularly in housing finance.Loans were packaged by intermediaries into very complex securities parceled out into tranches of risk.Huge new pools of investors bought these securities.These were replacements for the old,simple banking system.The whole thing started to be a house of cards.*
The regulators should have seen there was no single,overarching US regulator.The Fed thought there were no huge risks:these were grownups who could understand the risks they were creating,the Fed thought;but the capital structure encouraged people to hide the risks.*
The US economy now is roughly a sixth smaller,so getting inflation above the target is going to be particularly hard.It's very important to avoid deflation,so you have to keep rates low until the economy really recovers.Nobody wants to lend anymore.Banks only want to lend to people who won't spend it.There's no point in that.The fiscal position has tightened dramatically.The demand side of the US economy remains incredibly weak,meaning the world's economy is also.
The monetary policy might tighten a bit,but I think short term rates will not tighten to what we consider normal for a very long time.Ultimately we are headed for another financial crisis;the system isn't reformed enough.Here in the US,it won't be in this decade;I would be concerned about succeeding decades.The risks are there that,as soon as recovery starts,people will start borrowing again,and the structures for that are there,author Martin Wolf observed.
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