• 14 Aug 2008 at 10:20 AM

Goldman Not Kowtowing To Little Rich Boy Clients

By

UBS, Citigroup, JPMorgan etc have agreed (or are close to agreeing) to buy back billions in auction rate securities from their clients. As these people are relative peons compared to the God-like creatures serviced by Goldman Sachs, a fact which must be reinforced at all times lest the GLCs get testy, you would think that the master of the universe would be scrambling to not only reimburse their investors, but to secure a big enough space to assemble them all for the purposes of administering fellatio as an added way of saying sorry and to remind them of the added value in going Gold.* But you would think WRONG! Oh yes, the Journal reports that an unintended bit of comedy emerging from this whole auction rate securities shitstorm is the fact that “for once, Wall Street isn’t bending over backward for its richest clients,” with Goldman so far “refusing to buy back clients’ auction-rate paper.”
And that’s making Goldman’s clients mad, and also confused, you know, because they’ve never been treated like this before! Some of them probably almost want to say it’s oddly thrilling but obviously would never admit to that and probably couldn’t articulate it anyway. And besides, even if they did like it on some level, they like money more which is why Carl Everett, for instance, who has been satisfied with the firm’s service until now is saying stuff like, “That’s disappointing to me– my expectation is for the Goldman Sachs brand.”
Of course– and I say “of course” not knowing my ass from my elbows vis-a-vis auction-rate securities– Goldman’s probably going to suck it up eventually and acquiesce to Everett and Co.’s demands (even though what they should do is say, “Fuck you, you get NOTHING” and put their clients on a diet of tough love, which people respond to in the long run). Until then, let’s all sit back and enjoy the accompanying graphic to the Journal article which, if you look closely, illustrates a Goldman investor crying. Somebody came to work today.


wallstreetjournalauctionratesecurities.jpg
Goldman Balks at Helping Rich Clients Recover From ‘Auction Rate’ Securities [WSJ]
*Giants Stadium isn’t available and while MSG is free, its surface will not provide the desired turf–burn effect on the knees of those attempting to repent for their sins. Radio City Music Hall is said to be a contender.

Sign up for the Dealbreaker newsletter

Subscribe to our free daily email and get breaking news, financial headlines, commentary, and analysis from Dealbreaker.

— Advertisement —

Comments (87)

Older Comments
  1. 1
    Posted by guest | August 14, 2008 at 10:28 AM

    Too long, didn’t read.

  2. 2
    Posted by guest | August 14, 2008 at 10:29 AM

    @1- you’re annoying.

  3. 3
    Posted by guest | August 14, 2008 at 10:32 AM

    Actually, I’m thinking no harm, no foul here. Problem with the ARS’s is liquidity – decent returns esp now, but you currently cant get yr hands on the cash. Problem for a typical retail client with liquidity needs. But GS clients are not truly retail, but instead very high net worth and shouldn’t be bothered by that.

  4. 4
    Posted by guest | August 14, 2008 at 10:33 AM

    Goldman couldn’t tell a jar of mayo from a jar on fluffernutter!

  5. 5
    Posted by guest | August 14, 2008 at 10:34 AM

    @3– exactly…which is why they should quit their bitching.

  6. 6
    Posted by guest | August 14, 2008 at 10:49 AM

    @3&5
    Customer is always right, unless he’s wrong and even then don’t tell em they’re wrong. In that case think on your feet and come up with a solution.

  7. 7
    Posted by guest | August 14, 2008 at 10:52 AM

    #3, you are missing the point again.
    You can be a billionaire with investments in all kinds of assets. However, you also need some cash lying around to pay bills at teh end of the month (EVERYONE needs to do that).
    That cash lying around had been invested into ARS. Of course these folks can liquidate some other assets but the point is that they will have to liquidate SOMETHING. And they would very much rather they dont have to liquidate anything else and get back their cash.

  8. 8
    Posted by guest | August 14, 2008 at 10:52 AM

    im suprised Goldman has not down graded Hellmans mayo,It seems thats all they do these days is dwn grade all the important instutionsthat America great

  9. 9
    Posted by guest | August 14, 2008 at 10:56 AM

    @8- shut up, you douche.

  10. 10
    Posted by guest | August 14, 2008 at 11:02 AM

    7 I’ll agree to disagree. I’m not buying the story that every last dollar of the hypothetical billionaire’s liquid assets is in ARS’s. Also, I’m gonna go on a limb here (ok everyone, get ready to start s**tting on me..) but they could also borrow on margin and the interest may in fact be deductible, meaning that after tax they have a positive carry.

  11. 11
    Posted by guest | August 14, 2008 at 11:05 AM

    @”Giants Stadium isn’t available and while MSG is free, its surface will not provide the desired turf–burn effect on the knees of those attempting to repent for their sins. Radio City Music Hall is said to be a contender.”
    what about the Staples Center?

  12. 12
    Posted by guest | August 14, 2008 at 11:05 AM

    # 9 you are a douche. # 8 is right

  13. 13
    Posted by guest | August 14, 2008 at 11:07 AM

    Rock on Goldman…buyer beware…they were marketed as cash equivilents because they were at the time…markets evolve, this one dissolved…risk…that’s why it’s called investing and not winning

  14. 14
    Posted by guest | August 14, 2008 at 11:08 AM

    11 I was thinking more on the lines of St. Patrick’s Cathedral. The pews are already equipped for kneeling.

  15. 15
    Posted by guest | August 14, 2008 at 11:14 AM

    #9 wht do work for those D- Bags and rght back at you Ball Breath

  16. 16
    Posted by guest | August 14, 2008 at 11:15 AM

    aAlot of people are going to get a hearty laugh once GS starts to sputter, its only a matter of time. Someone/thing is going to come down on them, this whole facade about them having the smartest people is a bunch of BS. There are brillaint minds all over the street hurting right now. Im sure the fact that they were shorting subprime while selling it to institutional clients helped them out a few quarters ago. Bunch of s-bags

  17. 17
    Posted by guest | August 14, 2008 at 11:22 AM

    17 Wishful thinking. I’m on the client side so I have no bias. I can tell you without a doubt that GS is head and shoulders above the rest. There is nothing that they don’t do at least a little better than everyone else.

  18. 18
    Posted by EconAnalyst | August 14, 2008 at 11:34 AM

    The issue is not just liquidity. If they had their money locked up for years in a high yield security there would not be an issue.
    The max. rates for most ARS are 175% of 1-Mo LIBOR (for Munis) or 150 bps over LIBOR (for Student Loans).
    That’s a negative spread over 10Y treasury.

  19. 19
    Posted by guest | August 14, 2008 at 11:40 AM

    Isnt 175% of LIBOR tax free a great return? And I have a problem with your 10 year comparison. As I’m sure you know, the issuers have incentives to unwind and refinance but the market is not cooperating so the process is being slowed. I doubt though that that it will take 10 years to work itself out. This is not a problem for a high net worth investor.

  20. 20
    Posted by guest | August 14, 2008 at 12:33 PM

    17 Why are you talking to yourself?

  21. 21
    Posted by MuniShe | August 14, 2008 at 12:50 PM

    Max rates vary dramatically and the ones that have not been converted have the lower max rates. No incentive for issuers to convert, the investors get screwed for not reading the fine print.
    We were laughing about the lack of GS name in the news yesterday … And they pushed this stuff the same as everyone else. Just pushed it with a bit more disclosure compared to some of the other shops.

  22. 22
    Posted by guest | August 14, 2008 at 1:20 PM

    MuniShe Help me here: why wouldn’t a tax exempt issuer have an incentive to convert if they’re borrowing at L+175? or is that not a low max rate.

  23. 23
    Posted by MuniShe | August 14, 2008 at 1:28 PM

    Tax exempt issuers will convert if they can save off of where they would issue long term fixed … can just call that 5%. The problems come in when they have swaps attached to the VRDNs or ARS that create an extra cost to conversion.
    Also, most issuers are angry that they got talked into these products and then screwed so they have no incentive to help the brokers out who are now going to have to hold these products on their balance sheets.

  24. 24
    Posted by guest | August 14, 2008 at 1:32 PM

    23 Got it. Thanks.

  25. 25
    Posted by MuniShe | August 14, 2008 at 1:32 PM

    just noticed i wrote that first part wrong … but assuming the ppl here are smart enough to get it. in the middle of trades … back to work.

  26. 26
    Posted by guest | August 14, 2008 at 2:05 PM

    I was hoping Carl Everett would be the baseball player, but alas, he’s just some washed-up tech exec.

  27. 27
    Posted by guest | August 14, 2008 at 8:51 PM

    Their ARS out performed their hedge fund Global Alpha with about the same degree of liquidity and lower fees. So that’s pretty good.

  28. 28
    Posted by guest | August 15, 2008 at 5:31 AM

    I think Bess would be excellent at maintaining investor relationships.
    “Don’t like it? TOUGH. Bawl your eyes out.”
    Let tough love weave its magic spell.

  29. 29
    Posted by guest | August 15, 2008 at 11:16 AM

    Goldman is Goldman. Anyone who has a account there knows that your account/relationship plays second fiddle to Goldmans P&L…….Ask any trader ..any ceo…any hedge fund…They think that all there employees are replaceable ..and people do bussiness because of the Goldman culture which is one that we put Goldman first client second….They make a good percent of there money trading along and ahead of there clients…WALL STREET SAGE

  30. 30
    Posted by guest | August 15, 2008 at 11:17 AM

    Goldman is Goldman. Anyone who has a account there knows that your account/relationship plays second fiddle to Goldmans P&L…….Ask any trader ..any ceo…any hedge fund…They think that all there employees are replaceable ..and people do bussiness because of the Goldman culture which is one that we put Goldman first client second….They make a good percent of there money trading along and ahead of there clients…WALL STREET SAGE

  31. 31
    Posted by guest | August 15, 2008 at 11:17 AM

    Goldman is Goldman. Anyone who has a account there knows that your account/relationship plays second fiddle to Goldmans P&L…….Ask any trader ..any ceo…any hedge fund…They think that all there employees are replaceable ..and people do bussiness because of the Goldman culture which is one that we put Goldman first client second….They make a good percent of there money trading along and ahead of there clients…WALL STREET SAGE

  32. 32
    Posted by guest | August 15, 2008 at 11:17 AM

    Goldman is Goldman. Anyone who has a account there knows that your account/relationship plays second fiddle to Goldmans P&L…….Ask any trader ..any ceo…any hedge fund…They think that all there employees are replaceable ..and people do bussiness because of the Goldman culture which is one that we put Goldman first client second….They make a good percent of there money trading along and ahead of there clients…WALL STREET SAGE

  33. 33
    Posted by guest | August 15, 2008 at 11:18 AM

    Goldman is Goldman. Anyone who has a account there knows that your account/relationship plays second fiddle to Goldmans P&L…….Ask any trader ..any ceo…any hedge fund…They think that all there employees are replaceable ..and people do bussiness because of the Goldman culture which is one that we put Goldman first client second….They make a good percent of there money trading along and ahead of there clients…WALL STREET SAGE

  34. 34
    Posted by guest | August 15, 2008 at 11:24 AM

    I’m always suspicious of the quality of the underlying wisdom when its a double post. 29-33 – a quint. Nuf said.

  35. 35
    Posted by guest | August 15, 2008 at 5:10 PM

    I figure Scaturro, who heads their Private Client group, must be pissed off beyond belief — but who cares.

  36. 36
    Posted by guest | August 15, 2008 at 5:11 PM

    I figure Scaturro, who heads GS’s Private Client group, must be pissed off beyond belief — but who cares.

  37. 37
    Posted by guest | August 15, 2008 at 5:11 PM

    I figure Scaturro, who heads GS’s Private Client group, must be pissed off beyond belief — but who cares.

  38. 38
    Posted by guest | August 15, 2008 at 6:09 PM

    “I think Bess would be excellent at maintaining investor relationships.
    “Don’t like it? TOUGH. Bawl your eyes out.”
    Let tough love weave its magic spell.”
    couldn’t agree more.

  39. 39
    Posted by guest | August 18, 2008 at 5:48 PM

    17 – I heard people say the same thing about Enron some time ago

  40. 40
    Posted by Bristol Airport Hotels | April 18, 2012 at 7:34 PM

    Zd69Ll Muchos Gracias for your blog article.Really looking forward to read more. Fantastic.

  41. 41
    Posted by Scalar Energy Pendants | April 20, 2012 at 4:06 AM

    Very good post.Thanks Again. Really Cool.

  42. 42
    Posted by business cards | April 20, 2012 at 10:36 AM

    Wow, great article.Thanks Again.

  43. 43
    Posted by website design jacksonville | April 20, 2012 at 12:15 PM

    I am so grateful for your blog. Great.

  44. 44
    Posted by what is heel pain | April 20, 2012 at 1:32 PM

    Awesome blog article. Fantastic.

  45. 45
    Posted by party places | April 20, 2012 at 1:58 PM

    Hey, thanks for the article.Really looking forward to read more. Great.

  46. 46
    Posted by sushi party catering | April 20, 2012 at 3:38 PM

    This is one awesome blog post.Really thank you! Will read on…

  47. 47
    Posted by BioPreferred | April 21, 2012 at 1:47 AM

    I value the blog post.Thanks Again. Really Cool.

  48. 48
    Posted by Universitas Terbaik | April 21, 2012 at 3:00 AM

    Really appreciate you sharing this article post. Will read on…

  49. 49
    Posted by Ione Wetz | April 21, 2012 at 5:34 AM

    Im obliged for the blog article.Much thanks again. Keep writing.

  50. 50
    Posted by get followers tumblr | April 21, 2012 at 7:32 AM

    Very good article.Much thanks again. Really Cool.

  51. 51
    Posted by search engine optimization | April 21, 2012 at 10:49 AM

    I cannot thank you enough for the blog.Really looking forward to read more. Really Cool.

  52. 52
    Posted by till debt do us part | April 21, 2012 at 4:29 PM

    Very informative article post.Really thank you! Really Cool.

  53. 53
    Posted by budapest girl | April 21, 2012 at 8:05 PM

    Great, thanks for sharing this post.Much thanks again. Awesome.

  54. 54
    Posted by handbag | April 21, 2012 at 9:17 PM

    Thank you for your article.Much thanks again. Fantastic.

  55. 55
    Posted by free iPad | April 21, 2012 at 10:31 PM

    Awesome blog article.Really thank you! Much obliged.

  56. 56
    Posted by the best adjustable dumbbells | April 21, 2012 at 10:57 PM

    I appreciate you sharing this blog post. Really Cool.

  57. 57
    Posted by landscape photography tips | April 22, 2012 at 7:13 AM

    Really enjoyed this blog.Thanks Again. Much obliged.

  58. 58
    Posted by Job in Ipoh | April 22, 2012 at 1:17 PM

    I really liked your post.Really thank you! Really Cool.

  59. 59
    Posted by osteopath sydney cbd | April 23, 2012 at 4:14 PM

    This is one awesome post.Thanks Again. Awesome.

  60. 60
    Posted by best craft website | April 23, 2012 at 9:20 PM

    A round of applause for your article. Fantastic.

  61. 61
    Posted by china wholesale | April 24, 2012 at 12:35 AM

    Thanks again for the article.Much thanks again. Awesome.

  62. 62
    Posted by how can i lose weight | April 24, 2012 at 3:13 AM

    Thanks so much for the blog.Really thank you! Really Great.

  63. 63
    Posted by Coin Operated Rides for Sale | April 24, 2012 at 7:25 AM

    Thanks for the blog post.Thanks Again. Will read on…

  64. 64
    Posted by helicopter flash game | April 24, 2012 at 2:23 PM

    Very informative article.Really thank you! Keep writing.

  65. 65
    Posted by sex shop | April 24, 2012 at 6:24 PM

    I cannot thank you enough for the blog. Much obliged.

  66. 66
    Posted by hearing aids Kansas City | April 24, 2012 at 7:44 PM

    Im grateful for the blog.Really looking forward to read more. Cool.

  67. 67
    Posted by cursul valutar | April 25, 2012 at 1:01 AM

    Thanks so much for the blog article.Much thanks again. Cool.

  68. 68
    Posted by internet marketing solutions | April 25, 2012 at 7:33 AM

    Thanks for the blog post.Really thank you! Want more.

  69. 69
    Posted by email marketing leads | April 25, 2012 at 7:46 PM

    I loved your blog.Much thanks again. Great.

  70. 70
    Posted by t-shirt design | April 25, 2012 at 11:58 PM

    I value the article.Really looking forward to read more. Really Great.

  71. 71
    Posted by debt collection agency scotland | April 26, 2012 at 1:03 AM

    Thanks so much for the article.Really thank you! Fantastic.

  72. 72
    Posted by personal loans | April 26, 2012 at 5:30 AM

    Muchos Gracias for your article. Awesome.

  73. 73
    Posted by offers | April 26, 2012 at 9:52 AM

    wow, awesome blog article.Much thanks again. Really Cool.

  74. 74
    Posted by Watch movies | April 26, 2012 at 11:28 AM

    I really like and appreciate your article post.Much thanks again. Great.

  75. 75
    Posted by Aiphone | April 27, 2012 at 4:17 PM

    Very informative post.Much thanks again. Keep writing.

  76. 76
    Posted by Hawaiian Shirts | April 28, 2012 at 12:13 AM

    Very neat post.Much thanks again. Great.

  77. 77
    Posted by best remortgage deals | April 29, 2012 at 11:20 AM

    Thanks so much for the post.Really thank you! Much obliged.

  78. 78
    Posted by Mobile Internet Marketing Software | May 1, 2012 at 4:50 AM

    Hey, thanks for the article post.Really thank you! Much obliged.

  79. 79
    Posted by Job Sites in Mumbai | May 3, 2012 at 9:58 PM

    I value the blog article.Really looking forward to read more. Really Cool.

  80. 80
    Posted by toronto print shops | May 4, 2012 at 12:26 PM

    Really informative blog.Really looking forward to read more. Really Great.

  81. 81
    Posted by red snapper recipes | May 4, 2012 at 3:31 PM

    Looking forward to reading more. Great blog article.Thanks Again. Much obliged.

  82. 82
    Posted by check out | May 7, 2012 at 4:40 AM

    Hey, thanks for the post. Awesome.

  83. 83
    Posted by Mumbai Jobs | May 7, 2012 at 6:19 AM

    Im thankful for the blog. Want more.

  84. 84
    Posted by star wars games | May 7, 2012 at 12:08 PM

    Say, you got a nice blog.Much thanks again. Really Cool.

  85. 85
    Posted by uk | May 7, 2012 at 11:41 PM

    Thank you for your blog. Great.

  86. 86
    Posted by cindy crawford skin care | May 9, 2012 at 7:47 AM

    Very good article.Really looking forward to read more. Really Cool.

  87. 87
    Posted by reviews of companies in the north west | May 9, 2012 at 9:22 AM

    I loved your article. Great.

Older Comments

Leave a comment

You can log in with your account or comment as a guest below.

   or