Those were the days, my friend...

We love Playboy.
For the articles.
I know, I know, it is an old running joke, but in fact this article is a very good one.
Though our days as an expat banker didn’t run that wild, some things bring me back to a funny past.
It’s always the same: if you want to be a part of the herd, you have to follow them. You’ve to be one of ‘them’. You laugh together (hopefully), but you definitely cry together.
And that’s why that average salary of 700.000 USD promised within the Goldman ranks for 2009 makes me mildly smile.
Yes, there is a world outside this world and it is not longer ours.
Thank God for that one.

And no, it wasn't in Dublin. Though we visited the lapdance bars from time to time....

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More about Goldman

Well done Goldman. Shorting AIG when the price imploded while this was your most important counterparty on the other hand.
Enclosed you find a link to the transcript of the Goldman Sachs Q&A they held with analysts yesterday.
Worth to notice is the following:

Question: Thanks, and cleanup on the exposures David. Could you provide us a where marks and exposure levels stood in March versus November for the hot spots, commercial real estate, leveraged loans, residential real estate, ALT-A, subprime.

David Viniar: Let me give you a couple of those and anything I don't answer, ask he into if I haven't given what you need. The commercial real state, we had at the end of the quarter market value of-- round numbers I'll give you, about $8.5 billion and about $1.5 billion was CMBS security sots real loan portion was about $7 billion and our average mark across there was something in the high 50s. The residential real estate for us, we just have a trading position at this point. We have nonagency residential real estateWe have roughly $4 billion split equal, roughly equally between prime ALT-A and subprime, and that is really a trading position. You know, it's going to go up or down over the course of any quarter at this point. I wouldn't call them legacy. Our leveraged loans, from the $52 billion of legacy loans that we had at the end of the third quarter of '07 which is when the credit crisis really hit, we're down to a market value of about $2.3 billion. So the exposure there is pretty minimal this point and the average mark on that 2.3 billion is in the range of 50 cents.


Please can somebody explain to me, why the US Treasury/FDIC wants to pay between 80 and 88 cts on the dollar when these structures are priced at 50 cts in the books.

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PPIP, Goldman Sachs and my bonus

Some news items are catching our attention.
Stress Test + PPIP + CAP = getting banks to recognize losses
In the FT we read:

"The government’s toxic assets plan will force banks such as Citigroup, Bank of America and Wells Fargo to take large writedowns on their loans, requiring them to raise more capital from taxpayers or investors, executives and analysts have warned. Senior bankers say the authorities’ latest drive, announced on Monday, to cleanse financial groups’ balance sheets by encouraging investors to buy troubled residential and commercial mortgages will prompt banks to record losses on those portfolios. “The unspoken fear here is that selling off loan portfolios would lead to more government capital injections into major banks,” said an executive at a large bank."

Goldman Sachs is going to repay 10 bln of funds received from the government’s TARP recapitalization plan. Bonuses are more important than anything else, it seems, for the greedy boys of GS. Some smaller banks have already signaled plans to repay TARP money, citing concern over changes in terms of the scheme and compensation restrictions. Marin Bancorp, IberiaBank, Signature Bank, Sun Bancorp and TCF Financial have all applied to repay a combined $689m of TARP funds.

The rally in equities, fixed income, the $ selloff… all seemed to be losing momentum yesterday, although some deceleration/pullback is to be expected after the 50 bps move in treasuries post-FOMC and the historic rally in US shares on Monday.

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