Looks like the bank losses are stopping Goldman Sachs post $1.8bn 1st 1/4 profit.

sabretoothtigger

warren buffet called this last november when he said spreads on banks ongoing business was better then ever before.
Unfortunately I didnt see how that related and I didnt see the video till recently but turns out he was right though more bad debt seems likely

Barclays is our closest to an investment bank I think


Goldman are pretty canny, the fact they are selling shares now is well timed

'unknowns' is a take on Socrates I think

chucky

sabretoothtigger wrote: »

Barclays is our closest to an investment bank I think

RBS are also an investment bank - even more after the ABN merger.
HSBC are also to an extent if you can argue that they are a UK bank.

Standard Chartered too

Really2

chucky wrote: »

RBS are also an investment bank - even more after the ABN merger.
HSBC are also to an extent if you can argue that they are a UK bank.

Standard Chartered too

I think you would have to as it is mainly from "colonial" days. I see it as a british bank (but my view is never usualy the same as the rest of the population)

Walletwatch

Bloomberg TV were doing a detailed piece on these results last evening. Some interesting alternatives being discussed, most important of it being that Goldman wanted to repay the TARP to try and regain its independence. Apparently a number of foreign banks like Deutsche and Swiss firms poaching from Goldman who no longer has a free hand over bonus handouts to its employees. Repaying the TARP would hopefully remove those restrictions and enable the firm get more competitive.

Another alternative that was thrown up was the firm repaying Warren Buffett, whose terms are much more expensive, however, this was ruled out, as it was concluded that the US Government would not allow Goldman to repay Buffett without redeeming the TARP.

An interesting reason why the US Government may be reluctant to allow Goldman repay the TARP in a hurry is that it has literally forced the TARP funds down the throats of banks, some of whom were hardly in need of it. If the stronger banks start repaying the TARP funds, then the weaker banks who are actually in need of it would get exposed, which could potentially cause a run on these banks, triggering another round of collapses !!!

Woby_Tide

ad44downey wrote: »

It's an investment bank so I can't see how you can draw any conclusions from this. Our mortgage lending UK banks are still stuck in the mire.

Not strictly true.They gave up being an investment bank during the meltdown in September. Investment banking is now just part of their services.

*MF*

The Obama administration is drawing up plans to disclose the conditions of the 19 biggest banks in the country, according to senior administration officials, as it tries to restore confidence in the financial system without unnerving investors.

The administration has decided to reveal some sensitive details of the stress tests now being completed after concluding that keeping many of the findings secret could send investors fleeing from financial institutions rumored to be weakest.

Goldman’s action has put pressure on other financial institutions to do the same or risk being judged in far worse shape by investors. The administration feared that details on healthier banks would inevitably leak out, leaving weaker banks exposed to speculation and damaging market rumors, possibly making any further bailouts more costly.

After Goldman’s announcement on Monday that it planned to return the TARP funds, other big banks are looking for ways to do the same. Healthier banks are desperate to get out from the government’s thumb, believing the heightened scrutiny and the restrictions on executive compensation could cripple their businesses. But senior administration officials made clear they, not the banks, would decide whether to let the institutions return the money, and that would depend on their ability to raise fresh capital in the private markets.

Extract from full (and imho interesting) article here:

http://www.nytimes.com/2009/04/15/business/economy/15bailout.html?_r=1&th&emc=th

Really2

*MF* wrote: »

The Obama administration is drawing up plans to disclose the conditions of the 19 biggest banks in the country, according to senior administration officials, as it tries to restore confidence in the financial system without unnerving investors.

The administration has decided to reveal some sensitive details of the stress tests now being completed after concluding that keeping many of the findings secret could send investors fleeing from financial institutions rumored to be weakest.

This must mean a lot of banks are in better shape than many on make out/ or fear.

otherwise releasing these details would cause more problems than the net benefit of releasing the data.

Cannon_Fodder

Meanwhile some other banks are not doing so well...

"Swiss bank UBS to cut 8,700 jobs"

http://news.bbc.co.uk/1/hi/business/7999352.stm

"The news came as the bank announced it had lost about 2bn Swiss francs ($1.75bn; £1.2bn) in the first three months of 2009."

Really2

Cannon_Fodder wrote: »

Meanwhile some other banks are not doing so well...

"Swiss bank UBS to cut 8,700 jobs"

http://news.bbc.co.uk/1/hi/business/7999352.stm

"The news came as the bank announced it had lost about 2bn Swiss francs ($1.75bn; £1.2bn) in the first three months of 2009."

I think it will be without doubt the first to show recoving profits will be the US

They are a few months ahead of everybody in all of this mess.

mrposhman

Woby_Tide wrote: »

Not strictly true.They gave up being an investment bank during the meltdown in September. Investment banking is now just part of their services.

Very true, and this was given as the reason why the financial year end. Not to snuff December out as some doomsayers are stating but so that they fall in line with all other non-investment banks.

They are now in line with all banks in the US (or at least the vast majority) instead of the investment banking tax year.

As for people commenting on mark to market and stating that the balance sheets are therefore false as they can value these in a different way. Well I will assume you know nothing about accounting.

Mark to market was designed to value all assets at current resaleable value. When the market to sell assets collapses does this automatically make these assets worthless. Just because assets cannot be sold at that point in time, does not mean they will not be worth something in the future and aren't technically worth something to the bank at that time.

If the assets were generating income to the bank and therefore adding to their wealth and they weren't considering selling them are they really worthless? Mark to market suggests so but the US administration is trying to bring a sense of common sense to the equation. Clearly not all these assets are worthless and shouldn't be treated as such, else you will receive massive writedowns in times such as what we are in and then the banks can write their balance sheets back up again (remember these are revalued based on current saleable value) meaning that when the economy starts to recover fully massive profits would be seen in banks immediately.

Now for me this is not the ideal method, the initial writedowns spread panic where there may not be such a need and massive profits will create resentment. Better to spread this along a longer period of time and thankfully those in power have seen this.

Its not fraud etc or whatever you lot want to think it is, its simple common sense.