...Foreign Exchange Risk Management Goldman, Sachs & Co. October 2008 Table of Contents Introduction to the FX Markets I Market Update II FX Hedging III Slide 2 Introduction the FX Markets Statistics FX is the largest / most liquid global market Daily Turnover Bid / Offer Number of securities FX Market 3.2 Trillion 4 bp (0.04%) 150 (40 actively traded) Bond Market 900 Billion 5 bp 2,000,000 Equity Market 400 Billion 15 bp 20,000+ Source: BIS (September, 2007) Slide 3 Market Dynamics Short Term Drivers of the Market Market sentiment Release of new data (economic and political) Equity and bond market performance Positions of market participants Central Bank intervention Options activity Hedging mechanism, and protection from a knockout level are reasons for heavy trading Technical analysis Slide 4 Market Dynamics Long Term Drivers of the Market Supply/demand Current account vs. capital account + reserves “Current account” associated with trade flows “Capital account” associated with investments and speculation “Reserves” associated with central bank activities FX and Interest Rate policies are closely linked Purchasing Power Parity (PPP), e.g. the Economist Magazine’s “Big Mac” index Central Banks Mission is to preserve economic stability, in particular to preserve price stability Interest rates can drive FX markets... “Interest Rate Defense”: Raising interest rates can attract foreign...
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...Gray: The Goldman Sachs Standard Are there ethics in big business? Or does big business answer to a different power? This can be a rather gray area. The problem to be investigated is the Goldman Sachs Standard and the ethics (or lack thereof) that exist in the company. The original market strategy was to provide loans for small businesses and then sell these loans as commercial paper. (Jennings, 2012) In the 1920s, this became a tough market in which to make a profit. So, to borrow a phrase, when the going gets tough, the tough change strategies. In the late 1920s, Goldman changed its investment strategy to layered investments. This strategy involves creating a company and then personally purchasing a large amount of the shares. Goldman would generally purchase approximately 90 percent of these shares. The public, unaware of the original purchase, only saw a profitable company so they eagerly purchased not only the remaining initial shares, but also purchased shares sold by Goldman at a higher rate. Goldman would also purchase some of these to artificially inflate the market even further. This enabled Goldman to make money off of the secondary sales. Goldman was lying to its clients because the company it created was not truly as profitable as the inflated share price would indicate. It was fully aware of this and continued to layer additional companies into the strategy that would appear successful only as long as the market continued to grow. Goldman was lying...
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...Ethical Dilemma: Goldman Sachs Was Goldman Sachs Socially Responsible? Pamela Bryant Northcentral University Abstract Illegal and unethical activity was prevalent in the Goldman Sachs administration and the charges filed against them by the SEC were inevitable. The underlying thought at Goldman Sachs amidst the allegations was a social purpose and a contribution to the economic cycle. While there were many gray areas of activity, this research will focus on the investment strategies used to control the clients financial investment gain and in most cases loss. Furthermore, this paper will outline the unethical behavior that was associated with the fraudulent transactions of Goldman Sachs as it related to the clients and public investors. Was Goldman Sachs Socially Responsible? The problem to be investigated is whether Goldman Sachs violated its own Code of Ethics in dealing with clients and public investors. According to the Preamble of the Business Code of Ethics, Goldman Sachs believes the highest standard of integrity should be included as the focal element in a business relationship. Regardless of how perceptive one might be in understanding the investment strategies of Goldman Sachs or even its relationship to the difficulties of the market, it is clear that not all activities were in accordance with the good old-fashioned law of principle and ethics. Background Goldman Sachs history has never been clear of controversy, dating back to its inception in...
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...Executive summary – Goldman Sachs The Goldman Sachs Group, Inc. is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in all major financial centers around the world. They report their activities in the following four business segments: • Investment Banking • Institutional client services • Investing & lending • Investment risk management Goldman Sachs commits people, capital and ideas to help our clients, shareholders and the communities we serve to grow. The firm also provides mergers and acquisitions advice, underwriting services, asset management, and prime brokerage to its clients, which include corporations, governments and individuals. The firm also engages in market making and private equity deals, and is a primary dealer in the United States Treasury security market. Former employees include Robert Rubin and Henry Paulson who served as United States Secretary of the Treasury under Presidents Bill Clinton and George W. Bush, respectively, as well as Mark Carney, the governor of the Bank of Canada since 2008, Mario Draghi, governor of the European Central Bank and Mario Monti, the Prime Minister of Italy. As of 2009, Goldman Sachs employed 31,701 people worldwide...
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...Merrill Lynch and Co. was formed back in 1914 as a small investment firm on Wall Street, but over time grew into one of the largest firms in the world. In 1971 the company went public and at the time they were managing over 1.7 trillion dollars in assets. However come 2007 and the financial crisis Merrill Lynch and Co found themselves only days away from declaring bankruptcy. Bank of America Corporation is an American multinational banking and financial services corporation, is the largest bank holding company in the United States by assets, and the second largest bank by market capitalization (Top 50 bank, 2011). At the same time Merrill Lynch and Co was having trouble with consecutive multi-billion dollar loss quarters, Bank of America was in talks with Lehman Brothers about a possible acquisition. However the government could not make any guarantees to Bank of America for funding so talks died down in the last hours. Thus setting up what many professionals in the financial sector deem as the “Deal from Hell”. The exact cause of the downfall of one of the largest financial institutions in the world is up for debate among professionals from that field. According to some the collapse of Merrill Lynch started earlier in the years of 2006-2007 and can be widely attributed to then CEO Stanley O’Neal. According to Barry Grey, “The 93-year-old firm announced it had lost over $2.2 billion in the third quarter and written off $8.4 billion in failed investments, of which $7.9 was...
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...Too Big To Fail Chapter 19 Setting This chapter starts with Lloyd Blankfein, CEO of Goldman Sachs (GS), thinking about his company’s future. Stock market is dropping and the regulators still haven’t decided on what, when and how to fix the financial system. Henry “Hank Paulson” the US Treasury Secretary at the time, strongly believes the only way to build confidence in the market place was to have the government pass the Trouble Asset Relief Program (TARP). He had a big task ahead of him because it would be difficult to get lawmakers to agree his plan. Currently Wachovia another well known bank is in crisis. Its two month old CEO, Bob Steel, is trying desperately to broker a deal without government intervention, with either Citibank or Wells Fargo and Company (WFC) to save his bank. In the meantime, investors’ confidence in Morgan Stanley is waning and the company is urgently trying to close a deal with the Japanese company Mitsubishi to get more capital on the books. Companies across the board are trying to become more liquid in the tight credit market. Major Players Hank Paulson is trying his best to reach an agreement with Congress, so he can get TARP passed as quickly as possible. He dislikes politics but knows he has to work with the politicians or his bill would die. His solution to the financial crisis is TARP and working with lawmakers would be the only way to get this done. To get Congress on board, he would also have to work with the chairwoman of the Federal...
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...February 17 Discussion Question Christopher Suto 1. What is a VIE? An entity (investee) in which the investor has obtained less than a majority-owned interest, according to the United States Financial Accounting Standards Board. A VIE refers to an entity (the investee) in which the investor holds a controlling interest that is not based on the majority of voting rights. As long as the investee is not the primary beneficiary then they do have to consolidate the company on their balance sheet. 2. How did we determine whether an entity need to be consolidated before FIN 45? Before FIN 45, “Many financial institutions were secondarily liable (without adequate disclosures) for many financial instruments held in special purpose entities” (Reinstein, 2012). The old consolidation framework used a common-sense approach, where a company should consolidate operations when they had a controlling ownership interest in another. Controlling abilities were tough to recognize and led to many unconsolidated statements. a. Explain how FIN 46 modified the guidance on VIEs. Originally FIN 46 focused only on special purpose entities and required a reporting enterprise to consolidate them. Soon FASB changed it where FIN 46 should apply to all entities where a VIE exists. Part of this decision involves more judgment now according to sec.gov. There is no bright line test and all facts and circumstances, qualitative and quantitative, should be considered. b. Explain how SFAS 167...
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...mobile service internet platform. We believe Mannesmann underpay for acquiring Orange. Although referring to past mobile transaction table, which assumes control premium - Exhibit 8, Mannesmann was relatively paid more as EV/Sub is 8,857x and EV/POP is 533x, which are higher than means for controlling deals, which are 6,530x for EV/sub and 330x for EV/POP in Europe and 4,569x and 203x respectively in U.S. However, transaction in same industry doesn’t necessarily reflect firm-specific characteristics, thus we developed a proximate synergy valuation model based on Goldman Sachs’ valuation on synergy of Vodafone&Mannesmann (V&M) deal. First, we calculate V&M’s synergy value of £28,891 million from all the parameters from Exhibit 10 in the case (detailed DCF valuation referred to Appendix 1). Second, we derived synergy for mobile data business of £5,778 million from Lehman Brother’s 20% estimation based on Goldman Sachs’ valuation....
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...were ready to take up the challenge of Frick: they would insist on their right to organize and to deal collectively with their employers. Their tone was manly, ringing with the spirit of their rebellious forebears of the Revolutionary War. Then the news flashed across the country of the slaughter of steelworkers by Pinkertons. In the dead of night, Frick sent a boat packed with strike-breakers and heavily armed Pinkerton thugs to the mill. The workers stationed themselves along the shore, determined to drive back Frick’s hirelings. When the boat got within range, the Pinkertons had opened fire, without warning, killing a number of Homestead men on the shore, among them a little boy, and wounding scores of others. Source: Emma Goldman was political activist and radical who fiercely...
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...Marmena Shenuda T. Manzing History 1 20 May 2016 The Most Dangerous Woman in America Emma Goldman was an American anarchist of Russian origin who is credited to have contributed immensely towards the development of anarchist political philosophy in America and Europe. Born in Russia, she emigrated to the U.S. as a teenager. She became involved in politics after the infamous Haymarket affair after which several prominent anarchists were sentenced to death.Emma Goldman was born into an Orthodox Jewish family in Russia. Her mother Taube Bienowitch and father Abraham Goldman had a very troubled relationship which greatly bothered the young girl. She had two half-sisters and three brothers. She had a difficult childhood as her father was very violent and used to beat up the children while her mother remained distant and aloof. She had a loving relationship only with her elder half-sister Helena. She was a bold and rebellious youngster who tried her best to fight against violent authorities including her father and unscrupulous teachers. Her father stopped her from going to school when she was a teenager and she took to independent education. She also began working in order to help her poverty stricken family. Emma Goldman is one of the few who, while thoroughly preserving their individuality, have become an important factor in the social and intellectual atmosphere of America. The life she leads is rich in color, full of change and variety. She has risen to the topmost heights...
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...JS 5/1/2013 POLS 3315-001 Party Issue Valuations and Reassessments Why do political parties in the United States abandon or revisit specific issues? Moreover, what is the driving force behind a party making an issue politically salient? Some examples that could be correlated with these questions could be why the Republican Party has stayed silent on issues that many old-guard Democrats feel is contentious in the current administration, why the sudden recent ideological transformation of conservative party, or why many politicians steer clear from Wall-Street related subjects (even though lashing out against bankers these days is sure to garner some attention, and most likely support from the general public). All of these examples and more will be discussed in order to provide a sufficient answer as to why issues are left behind in the dust or put out prominently on display. There are numerous factors and variables to consider when trying answering such a question, one of which could be racial factors. It’s been largely documented that Latinos have been an increasingly growing electorate, going from 1 percent of voters from the 1950s to over 11% in the twenty-first century (Abramowitz 27). With this information in mind, it would make sense that the Democratic establishment is today trying to initiate immigration reform in the United States Senate, knowing that they’ll have an increasing amount of support from their Latino electorate. It should also be noted that although...
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...goals effectively helps in motivating the employees and improves communication processes both internal and outside public relations. Let us now look at the goals which Goldman Sachs has set for itself, identified from its vision & mission statements, business principles and its various public reports. * To provide superior returns to its shareholders. Goldman Sachs believes that profitability is critical to achieving superior returns, building their capital, and attracting and keeping the best people. This is a very quantifiable goal and its measured every quarter and is a primary indicator of the health of the firm. It thus relates to measurability of the SMART model1. * Strive to anticipate the rapidly changing needs of its clients and to develop new services to meet those needs. Goldman Sachs is primarily in the service industry which is highly competitive. Thus to ensure that it stays ahead of the competition, it is imperative for Goldman Sachs to continuously evaluate the requirements of its clients and ensure that they are being met.It thus focuses on specificity as mentioned in the SMART criteria. * To identify and recruit the very best person for every job and to offer them the opportunity to develop their career faster than anywhere else. Goldman Sachs is a people driven firm and consider them as their...
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...the legal system and, legal research. Being able to work for Finnegan & Wicker Law Firm will help me to hone my skills, to grow and learn more in this field. As a paralegal, to be able to assist lawyers with depositions, drafting of pleadings, subpoenas and, other legal documents is a very fulfilling task. There is one particular event that inspired me and propelled me into pursuing a career as a paralegal and that’s – watching and reading the civil case brought against Orenthal James Simpson (O.J), by the family of Ronald Goldman and Nicole Brown Simpson in 1997 - (http://en.wikipedia.org/wiki/O._J._Simpson_murder_case). The depth in which the depositions were done and the discovery process led to a successful win in the civil trial. The success of the civil suit in my opinion was mainly due to the adequate and proper research that was done, no stones were left unturned and, even though O.J was found not guilty in criminal court for the death of Ron Goldman and, Nicole Brown Simpson respectively he was held responsible for their deaths in civil court. Seeing the outcome of the civil trial against O.J, I knew that I would really enjoy being a paralegal and, to be able to work for some of the best lawyers here at Finnegan & Wicker Law Firm, makes becoming a paralegal worthwhile. I sincerely hope that I can become a part of your prestigious organization and team. Nickey Simpson Paragraph 2 Hi Debbie, how is my favourite cousin doing? I’m writing to inform you of a...
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...Case Study for Designing Channel Systems Cardenas Mike Lawrence BSBA MM 3-1 Submitted to: Ms. Anna Corina G. Kagaoan Introduction Business paper was initially presented more than 100 years prior, when New York vendors started to undercut their term commitments to merchants that went about as go betweens. These merchants would buy the notes at a rebate from their standard worth and after that pass them on to banks or different financial specialists. The borrower would then reimburse the speculator a sum equivalent to the standard estimation of the note.Marcus Goldman of Goldman Sachs was the primary merchant in the currency business sector to buy business paper, and his organization got to be one of the greatest business paper merchants in America taking after the Civil War. The Federal Reserve additionally started exchanging business paper alongside treasury bills from that time until World War II to raise or lower the level of financial stores coursing among banks.After the war, business paper started to be issued by a developing number of organizations, and in the long run it turned into the head obligation instrument in the currency market. A lot of this development was encouraged by the ascent of the shopper acknowledge industry, the same number of Mastercard backers would give cardholder offices and administrations to traders utilizing cash produced from business paper. The card backers would then buy the receivables put on the cards by clients from these dealers...
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...O.J. Simpson is guilty of killing his ex-wife, Nicole Brown Simpson, and her friend, Ronald Goldman. There is an enormous amount of evidence that proves that he did. He had a motive, but not a solid alibi. There are lab results dealing with blood, DNA, and fibers that place him at the scene of the murders. If that is not enough to prove him guilty, then there are also the witnesses that can place O.J. Simpson going in and out of the Rockingham estate on the day and around the time of the murders. Others have testified of threatening remarks they heard O.J. Simpson say against Nicole and police reports of violent actions he committed against her. Evidence proves that O.J. Simpson is guilty of killing Nicole Brown Simpson and Ronald Goldman. O. J. Simpson had motive for killing Nicole Brown Simpson. He and his wife were having severe marital problems. There is proof of how bad their relationship was. She had her sister take pictures of her bruised body and lock them in a safe for future evidence if needed. Also, there were recorded 911 phone calls in 1989 and 1993 from Nicole during brutal attacks by O.J. When the police responded to...
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