Congrats Paul La Monica. Your editorial, “Shut up, Lloyd Blankfein!” is spreading like wildfire. It’s ‘gone viral’ as they say. However, it is clear that your knowledge of the issues involved is limited, at best.
It draws in populists with the provocative “Shut Up” headline, then morphs into stealth Goldman ass-kissing. It essentially tells Goldman-critics to man up and stop whining.
It starts out with a bit of promise:
The public relations gurus who are advising Goldman Sachs Chief Executive Officer Lloyd Blankfein might want to give him some new advice. Shut up!
Blankfein made a startling confession Tuesday. He apologized for Goldman’s role in the financial crisis, saying that the bank ‘participated in things that were clearly wrong and have reason to regret.’
But any redeeming qualities end there. He goes on to display ignorance in the subjects of finance and banking. He essentially argues that Goldman should be allowed to do as it pleases. This part particularly rankled me:
The notion that Goldman’s good fortune is a problem is silly. Even though many average Americans are still struggling financially, it’s misguided to suggest that everybody should be suffering and that the nation would have been better off if Wall Street went under. . .
Goldman Sachs is a bank. It’s supposed to make money. It’s supposed to take risks. Lloyd isn’t exactly running the March of Dimes.
Where to begin? Monica’s statement that banks are “supposed” to take risks is interesting. Because I thought a bank was supposed to safeguard people’s money, while making responsible loans to others. That’s how fractional-reserve banking works.
Goldman Sachs is an investment bank/hedge-fund with government guarantees. They’re not a “bank” in the traditional sense of the word.
When the U.S. converted GS and other “systemically important” firms to bank holding companies, it flat-out saved their asses. Ongoing perks include cheap Fed funds and the ability to issue government-guaranteed debt (Goldman still has around $20b in gov-backed debt).
And Monica says they are supposed to take risk, with explicit government-backing? That, my friends, is 100% pure garbage.
His statement that we should get off Goldman’s back, since they
While acknowledging the role of banks in the financial meltdown, the CEO of Goldman Sachs said recently he believes his company is doing "God’s work."
"We’re very important. We help companies to grow by helping them to raise capital. Companies that grow create wealth," CEO Lloyd Blankfein said in a recent interview. "This, in turn, allows people to have jobs that create more growth and more wealth. We have a social purpose."
Given that Goldman is doing "God’s work" and that CEO Lloyd Blankfein is arguably "god on earth", it is fitting for there to be a prayer in his honor.
Tonight I received a prayer in the email dedicated to Lloyd. Unfortunately I do not know the origin, so I do not know who to credit. I also modified a few sentences that I did not think fit very well and added sentences where they were missing.
My Version of "Lloyd’s Prayer"
Our chairman who art at Goldman
Blankfein be thy name
Thy rally’s come, God’s work be done
In the Dow as it is in the Nasdaq
Give us this day our daily gain
And forgive us our frontruning, as we punish those who frontrun against us
And bring us not under indictment
But deliver us from regulators
For thine is the cashflow, and the power, and the bonuses, forever and ever. Amen
Version as Received
OUR CHAIRMAN
WHO ART AT GOLDMAN
HALLOWED BE THY NAME
THE RALLYS COME,GODS WORK BE DONE
WE HAVE NO FEAR OF CORRECTION
GIVE US THIS DAY OUR DAILY GAIN
AND BANKRUPT OUR NEAREST COMPETITORS
LEAVING NO ONE LEFT TO STAND AGAINST US
AND BRING US NOT UNDER INDICTMENT
FOR THINE IS THE TREASURY
AND THE HOUSE AND THE SENATE
FOREVER AND EVER
GOLDMAN
Addendum:
"Black Swan" Comments:
When I went to elementary school, we started each day with the Lord’s Prayer and the Pledge of Allegiance.
Since the Lloyd’s Prayer has already been covered, why not cover the Pledge of Subservience?
It looks like the bulls want to take this squeeze up to the 1105 trendline, with six bull days under their belt since the tag on the lower trend line last week.
This rally is being accomplished on thin volumes, thick liquidity, and weak regulations dominated by trading programs, with obviously fabricated and highly overstated fundamental underpinnings.
As Lloyd Blankfein would characterize it, the Wall Street banks are just "doing God’s own work," or at least the work of some power and principality with a favorable inclination to greed, pride, and deception, if these masters of the universe were to acknowledge any power greater than themselves.
No doubt there are some good intentions in the government behind a desire to manage the markets higher. After all, a rising stock market is a sign of wealth and prosperity to the superficial elite based on their own personal portfolios. Especially if they ignore all the jobless, homeless, and suffering people being victimized in their highly exclusive empire of the ego.
But who can stop a people determined to be rich without productive labor, with a self-obsession capable of subordinating even heaven to their personal greed and vanity? This will end in an ocean of tears.
The banks must be restrained, and the financial system reformed, and balance restored to the economy, before there can be any sustained recovery.
In an UNBELIEVABLE move off the bottom over the past 6 months and one week, we have gained 58% on the S&P and have finally crossed into our 33% levels (from the highs) that we first set as upside targets back in our July Big Chart Review. At the time I said "I just don’t see that happening without a pullback" yet here we are, with barely a wiggle down since I wrote that on July 27th and up 20% from our July 13th S&P base at 880.
Have we been too bearish? Is it now natural for the market to rise 20% in 2 months without a pullback? Are we really 20% better off than we were 2 months ago? History tells us not to mess with the 5% rule so we SHOULD encounter powerful resistance here as we approach the zone of a roughly 60% move off the March lows as well as 30% off our highs – it’s going to be a rough 2.5% from here. As you can see from the above chart, we have already exceeded all previous recoveries by almost 100% at this point in the cycle. And why not, our government spent $9 TRILLION dollars to do it so we damn sure better have a pretty chart as a souvenir! The other rally that had a spectacular recovery was the the great crash of 1929 (the grey line).
In the 1929 crash, the stock market fell first, not the banks, which didn’t begin failing until 1932 as lack of electronic data and next-day mail meant it took a lot longer for the late payment and foreclosure cycle to start impacting bank balance sheets. Also, of course, they were nowhere near as maniacally levered as today’s institutions. In 1929 the banks did not play the market, they simply lent money to people who invested in stocks, businesses and properties that went bust so there were two distinct waves to the market crash in the Great Depression: First the people went broke, then the banks.
Unemployment in the US in 1930, a year after the crash, was only 8.7% - less than it is now. No one at that time thought it was important to help the average American get back on their feet after many of them lost their life savings and went deeply into debt as their homes dropped in…
Lloyd Blankfein, the 54-year-old chairman and CEO of Goldman Sachs, is powerfully perplexed. In the past six months, his investment-banking and securities-trading firm has roared ahead in profitability by taking risks — that other firms would not — for itself and its clients in an edgy market. It has paid back the billions of dollars, and then some, of taxpayer money the government forced it to take last October; raised billions of dollars in capital from private investors, including $5 billion from Warren Buffett; and urged its cadre of well-paid and high-performing executives to show some restraint on the conspicuous-consumption front.
For this, the level of resentment and ire directed at Goldman — from Congress, from competitors, from the media, from the public — has never been higher. Blankfein, only the 11th leader of the 140-year-old firm, is having a tough time understanding why.
A recent story in Rolling Stone, of all places, in which the author described Goldman as a "great vampire squid wrapped around the face of humanity," has been particularly troubling to him. "Oddly enough, the Rolling Stone article tapped into something," he says in an interview. "I saw it as gonzo, over-the-top writing that some people might find fun to read. I was shocked that others saw it as being supporting evidence that Goldman Sachs had burned down the Reichstag, shot the Archduke Ferdinand and fired on Fort Sumter." Suddenly a firm that few Americans know or understand has become part of the zeitgeist, the symbol of irresponsible Wall Street excess, the recovery from which has pushed the nation’s treasury to the brink.
It’s an odd contradiction: an excelling company being reviled in a country that embraces the profit motive. And without question, Goldman Sachs under Blankfein has recalibrated, in very large numbers, its place as Wall Street’s most astute, most opaque and most influential firm. In the first and second quarters of 2009, the company earned $5.3 billion in net income, the most profitable six-month stretch in Goldman’s history. Goldman’s stock has more than tripled since its low last November, to more than $160 per share.
The U.S. unemployment rate has risen too, nearing 10%. In stark contrast, Goldman Sachs has set aside some $11.36 billion so far in 2009 in total compensation and benefits for its…
Improvement in first time unemployment claims is slowing. Actual, not seasonally manipulated data, including an adjustment for the usual weekly upward revision, shows that the year to year rate of change is on the cusp of a possible upside breakout, which would be good news for stock market bears if it happens.
Initial Unemployment Claims Chart- Click to enlarge
Here’s why it’s mind blowing. I’ve plotted it below on an inverse scale with the S&P 500 overlaid.
Unemployemt Claims and Stock Prices - Click to enlarge
Major US Markets including (NYSEARCA:DIA), (NYSEARCA:SPY), (NASDAQ:QQQ), and (NYSEARCA:IWM) dropped over 3% each on Italian bond fears and an increased worry that Europe will not be able to bail out its 4th largest economy. Furthermore, the iShares MCSI Italy Fund (NYSEARCA:EWI) wiped out over 9% today, further illustrating the dire situation in Italy and the European Union: ...
The second economic disappointment of the day comes from the Dallas Fed, which dropped from -2.0 to -11.4 on expectations of -9.0- this was the 4th consecutive negative print month. The report was, in a word, horrible, with just 2 of the 15 constituent indices posting an increase, and the bulk solidly in the red, led by Unfilled and New Orders which dropped 16.8 and 11.2, respectively: not good for economic growth. On the employment side there was nothing good either, with both employment and hours worked declining by -...
Bloomberg reports that Diana Containerships (NASDAQ: DCIX) files to offer stock up to $172.5M. Diana Containerships says that Diana shipping will also buy $20M of stock.
Top 5 RisersStockRatingAnalysisVLOSTRONGBUYAn increasingly positive growth rate of past earnings, along with improving expectations for long term growth, make Valero a good prospect for high returns.KROSTRONGBUYKronos Worldwide has been gaining recognition from analysts as a good canditate for achieving higher than expected earnings along with higher overall projected valuation.SFIBUYiStar is one of the top candidates projected to achieve both higher than previously projected earnings in the short run and a higher earnings growth rate in the long run.AMATSTRONGBUYApplied Materials has been...
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February is now past, and the Biotech Porfolio is loaded with winners and a miss (PLX). MRK is down a bit, but I expect that trade to recover, and one could be more agressive and double down on it, or play another round at the Jan13 $30 options for roughly the same price. Below is the summary, and note the grey boxes are ones that did not fill. I am still a fan of BMRN, and like DEPO as well. Now let's look at a few others.
Table 1. PSW Biotech Plays Since January 2011
 
Our newest play is Momenta Pharmaceuticals (MNTA), who is pursuing a three-part business model which includes complex generic equivalents in partnership with the Sandoz division of Novartis, proprietary compounds, and follow-on- biologics (FOB). It seems that this company is tied up in competition/litigation wit...
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Congrats Paul La Monica. Your editorial, “Shut up, Lloyd Blankfein!” is spreading like wildfire. It’s ‘gone viral’ as they say. However, it is clear that your knowledge of the issues involved is limited, at best.
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In the 1929 crash, 
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
(