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The Goldman Sachs Group, Inc., or simply Goldman Sachs , is a bank holding company
Bank holding company

A bank holding company is a Holding company which controls one or more banks....
 that engages in investment banking, securities
Security (finance)

A security is a fungible, negotiable instrument representing financial value. Securities are broadly categorized into debt securities , and stock securities; e.g., common stocks....
 services, and investment management
Investment management

References...
. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan
Lower Manhattan

Lower Manhattan is the southernmost part of the island of Manhattan, the main island and center of business and government of the New York City....
 area of New York City
New York City

The City of New York is the List of United States cities by population in the United States, while the New York metropolitan area ranks among the List of urban areas by population....
 at 85 Broad Street
Broad Street (Manhattan)

Broad Street is located in the Financial District in the New York City borough of Manhattan, stretching from South Street to Wall Street.Broad Street was named for the Broad Canal, which it replaced....
 but has its secondary office at 30 Hudson Street, Jersey City, New Jersey. Goldman Sachs has offices in all financial centers. The firm acts as a financial advisor and money manager for corporation
Corporation

A corporation is a legal entity separate from the persons that form it. It is a legal entity owned by individual stockholders. In British tradition it is the term designating a body corporate, where it can be either a corporation sole or a corporation aggregate ....
s, governments, and wealthy families around the world.






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Encyclopedia


The Goldman Sachs Group, Inc., or simply Goldman Sachs , is a bank holding company
Bank holding company

A bank holding company is a Holding company which controls one or more banks....
 that engages in investment banking, securities
Security (finance)

A security is a fungible, negotiable instrument representing financial value. Securities are broadly categorized into debt securities , and stock securities; e.g., common stocks....
 services, and investment management
Investment management

References...
. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan
Lower Manhattan

Lower Manhattan is the southernmost part of the island of Manhattan, the main island and center of business and government of the New York City....
 area of New York City
New York City

The City of New York is the List of United States cities by population in the United States, while the New York metropolitan area ranks among the List of urban areas by population....
 at 85 Broad Street
Broad Street (Manhattan)

Broad Street is located in the Financial District in the New York City borough of Manhattan, stretching from South Street to Wall Street.Broad Street was named for the Broad Canal, which it replaced....
 but has its secondary office at 30 Hudson Street, Jersey City, New Jersey. Goldman Sachs has offices in all financial centers. The firm acts as a financial advisor and money manager for corporation
Corporation

A corporation is a legal entity separate from the persons that form it. It is a legal entity owned by individual stockholders. In British tradition it is the term designating a body corporate, where it can be either a corporation sole or a corporation aggregate ....
s, governments, and wealthy families around the world. Goldman offers its clients mergers & acquisitions advice, underwriting
Underwriting

Underwriting refers to the process that a large financial service provider uses to assess the eligibility of a customer to receive their products ....
 services, asset management, and engages in proprietary trading
Proprietary trading

Proprietary trading is a term used in investment banking to describe when the firm's traders actively trade stocks, Bond s, Option , commodities, derivative or other financial instruments with its own money as opposed to its customers' money, so as to make a profit for itself....
, and private equity
Private equity

In finance, private equity is an asset class consisting of Stock securities in operating companies that are not publicly traded on a stock exchange....
 deals. It is a primary dealer
Primary dealers

A primary dealer is a bank or securities broker-dealer that may trade directly with the Federal Reserve System of the United States . Such firms are required to make bids or offers when the Fed conducts open market operations, provide information to the Fed's open market trading desk, and to participate actively in United States Department of...
 in the U.S. Treasury securities market
Capital market

The capital market is the market for security , where Corporation and governments can raise longterm funds. It is a market in which money is lent for periods longer than a year....
.

Goldman was the second largest donor to the Barack Obama
Barack Obama

Barack Hussein Obama II is the List of Presidents of the United States and current President of the United States. He is the first African American to hold the office....
 campaign and the fourth largest to the John McCain
John McCain

John Sidney McCain III is the senior senator United States United States Senator from Arizona. He was the Republican Party presidential nominee in the 2008 United States presidential election....
 campaign in the 2008 presidential election. Former Goldman Sachs employees such as Hank Paulson and Robert Rubin
Robert Rubin

Robert Edward Rubin served as the 70th United States Secretary of the Treasury during both the first and second Bill Clinton administrations. Before his government service, he spent 26 years at Goldman Sachs....
 have held high positions in the federal government, regardless of which party was in the White House.

History


Goldman Sachs was founded in 1869 by German
Germany

Germany , officially the Federal Republic of Germany , is a country in Central Europe. It is bordered to the north by the North Sea, Denmark, and the Baltic Sea; to the east by Poland and the Czech Republic; to the south by Austria and Switzerland; and to the west by France, Luxembourg, Belgium, and the Netherlands....
 Jew
Jew

A Jew is a member of the Jewish people, an ethnoreligious group that traces its ancestry to the Israelites or Hebrews of the Ancient Near East....
ish immigrant Marcus Goldman
Marcus Goldman

Marcus Goldman was a German-American businessman and entrepreneur. He was born in Trappstadt, Germany and immigrated to the United States in 1848....
. In 1882, Goldman's son-in-law Samuel Sachs
Samuel Sachs

Samuel Sachs was a German American Investment banking. He was born in Maryland to Jewish immigrants from Bavaria, Germany. Sachs along with his longtime friend Philip Lehman of Lehman Brothers pioneered the issuing of stock as a way for new companies to raise funds....
 joined the firm which prompted the name change to Goldman Sachs. The company made a name for itself pioneering the use of commercial paper
Commercial paper

In the global money market, commercial paper is an Unsecured debt promissory note with a fixed Maturity of one to 270 days. Commercial Paper is a money-market security issued by large banks and corporations to get money to meet short term debt obligations , and is only backed by an issuing bank or corporation's promise to pay the face amou...
 for entrepreneurs and was invited to join the New York Stock Exchange
New York Stock Exchange

New York Stock Exchange is a stock exchange based in New York City, New York. It is the largest stock exchange in the world by United States dollar market capitalization of its listed companies' Security ....
 in 1896.

In the early 20th century, Goldman was a player in establishing the initial public offering
Initial public offering

Initial public offering , also referred to simply as a "public offering" or "flotation," is when a company issues common stock or Share to the public for the first time....
 market. It managed one of the largest IPOs to date, that of Sears, Roebuck and Company
Sears, Roebuck and Company

Sears, Roebuck and Co., commonly known as Sears, is an united States mid-range chain of international department stores, founded by Richard Warren Sears and Alvah Roebuck in the late 19th century....
 in 1906. It also became one of the first companies to heavily recruit those with MBA degrees from leading business schools, a practice that still continues today.

On December 4, 1928, it launched the Goldman Sachs Trading Corp., a closed-end fund
Closed-end fund

A closed-end fund, or closed-ended fund is a collective investment scheme with a limited number of Share .New shares are rarely issued after the fund is launched; shares are not normally redeemable for cash or Security until the fund liquidates....
 with characteristics similar to that of a Ponzi scheme
Ponzi scheme

A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from profit....
. The fund failed as a result of the Stock Market Crash of 1929, hurting the firm's reputation for several years afterward.

In 1930, Sidney Weinberg
Sidney Weinberg

Sidney James Weinberg was a long-time leader of the Wall Street firm Goldman Sachs, nicknamed ?Mr. Wall Street? by The New York Times....
 assumed the role of senior partner and shifted Goldman's focus away from trading and towards investment banking
Investment banking

An Investment Bank is a financial institution that deals with raising capital, trading in securities and managing corporate mergers and acquisitions....
. It was Weinberg's actions that helped to restore some of Goldman's tarnished reputation. On the back of Weinberg, Goldman was lead advisor on the Ford Motor Company's
Ford Motor Company

The Ford Motor Company is an United States multinational corporation and the world's List of automobile manufacturers#World Motor Vehicle Production by Manufacturer based on worldwide vehicle sales, following Toyota, General Motors, and Volkswagen Group....
 IPO in 1956, which at the time was a major coup
Coup d'état

A coup d??tat , often simply called a coup, is the sudden unconstitutional overthrow of a government by a part of the state establishment – usually the military – to replace the branch of the stricken government, either with another civil government or with a military government....
 on Wall Street. Under Weinberg's reign the firm also started an investment research division and a municipal bond
Municipal bond

In the United States, a municipal bond is a Bond issued by a city or other local government, or their agencies. Potential issuers of municipal bonds include cities, counties, redevelopment agencies, school districts, publicly owned airports and seaports, and any other governmental entity below the state level....
 department. It also was at this time that the firm became an early innovator in risk arbitrage
Risk arbitrage

Risk arbitrage, or merger arbitrage, is an investment or trading strategy often associated with hedge funds.Two principal types of mergers and acquisitions are possible:...
.

Gus Levy
Gus Levy

Gustave "Gus" Levy was senior partner of Goldman Sachs from 1969 until his death in 1976, succeeding the legendary Sidney Weinberg.Levy was born in 1910 in New Orleans, one of three children of Sigmund and Bella Levy....
 joined the firm in the 1950s as a securities trader, which started a trend at Goldman where there would be two powers generally vying for supremacy, one from investment banking and one from securities trading. For most of the 1950s and 1960's, this would be Weinberg and Levy. Levy was a pioneer in block trading
Block trade

In finance, a block trade is a trade that is usually at least 10,000 shares of a stock or $200,000 of bonds. It can also refer specifically to large trades that occur between institutional parties at a fixed price....
 and the firm established this trend under his guidance. Due to Weinberg's heavy influence at the firm, it formed an investment banking division in 1956 in an attempt to spread around influence and not focus it all on Weinberg.

In 1969, Levy took over as Senior Partner from Weinberg, and built Goldman's trading franchise once again. It is Levy who is credited with Goldman's famous philosophy of being "long-term greedy," which implies that as long as money is made over the long term, trading losses in the short term are not to be worried about. That same year, Weinberg retired from the firm.

Another financial crisis for the firm occurred in 1970, when the Penn Central Railroad Company went bankrupt with over $80 million in commercial paper outstanding, most of it issued by Goldman Sachs. The bankruptcy
Bankruptcy

Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors. Creditors may file a bankruptcy petition against a debtor in an effort to recoup a portion of what they are owed or initiate a restructuring....
 was large, and the resulting lawsuits threatened the partnership capital and life of the firm. It was this bankruptcy that resulted in credit rating
Credit rating

A credit rating assesses the credit worthiness of an individual, corporation, or even a country. It is an evaluation made by credit bureaus of a borrower?s overall credit history....
s being created for every issuer of commercial paper today by several credit rating services.

During the 1970s, the firm also expanded in several ways. Under the direction of Senior Partner Stanley R. Miller, it opened its first international office in London
London

London is the capital of both England and the United Kingdom, and the most populous municipality in the European Union. An important settlement for two millennia, History of London goes back to its founding by the Roman Empire....
 in 1970, and created a private wealth
Private Wealth Management

Private Wealth Management is the term generally used to describe highly customized and sophisticated investment management and financial planning services delivered to high net worth investors....
 division along with a fixed income
Fixed income

Fixed income refers to any type of investment that yield s a regular return.For example, if you lend money to a borrower and the borrower has to pay interest once a month, you have been issued a fixed-income security ....
 division in 1972. It also pioneered the "white knight
White knight (business)

In business, a white knight may be a corporation, a private company, or a person that intends to help another firm. There are many types of white knights....
" strategy in 1974 during its attempts to defend Electric Storage Battery against a hostile takeover
Takeover

In business, a takeover is the purchase of one company by another . In the UK, the term refers to the acquisition of a public company whose shares are listed on a stock exchange, in contrast to the mergers and acquisitions of a private company....
 bid from International Nickel and Goldman's rival Morgan Stanley
Morgan Stanley

Morgan Stanley is a global financial services provider headquartered in New York City, New York, United States. It serves a diversified group of corporations, governments, financial institutions, and individuals....
. This action would boost the firm's reputation as an investment advisor
Investment advisor

An investment advisor is an individual or business organizations that advises clients on investment matters on a professional basis.They tend to fall into two distinct categories:...
 because it pledged to no longer participate in hostile takeovers.

John Weinberg
John Weinberg

John Livingston Weinberg was an American banker and businessperson. He died of complications following a fall at the age of 81. He and his wife Sue Ann lived in Greenwich, Connecticut and had two children and five grandchildren....
 (the son of Sidney Weinberg), and John C. Whitehead
John C. Whitehead

John Cunningham Whitehead , is currently the chairman of the World Trade Center Memorial#World Trade Center Memorial Foundation.2C Inc. , and former chairman of the LMDC until he resigned in May 2006....
 assumed roles of co-senior partners in 1976, once again emphasizing the co-leadership at the firm. One of their initiatives was the establishment of the 14 business principles that are still used to this day.

In the 1980s, the firm made a move by acquiring J. Aron & Company, a commodities trading firm which merged with the Fixed Income division to become known as Fixed Income, Currencies, and Commodities. J. Aron was a player in the coffee and gold markets, and the current CEO of Goldman, Lloyd Blankfein
Lloyd Blankfein

Lloyd Craig Blankfein is the current Chief Executive Officer and Chair of The Goldman Sachs Group, Inc. After the May 31, 2006 nomination of former CEO Hank Paulson as Secretary of the Treasury, Blankfein was announced as his replacement....
, joined the firm as a result of this merger. In 1985 it underwrote the public offering of the Real Estate Investment Trust
Real estate investment trust

A Real Estate Investment Trust or REIT is a tax designation for a corporation investing in real estate that reduces or eliminates corporate income taxes....
 that owned Rockefeller Center
Rockefeller Center

Rockefeller Center is a complex of 19 commerce buildings covering between 48th and 51st streets in New York City. Built by the Rockefeller family, it is located in the center of Midtown Manhattan, spanning between Fifth Avenue and Seventh Avenue ....
, then the largest REIT offering in history. In accordance with the beginning of the collapse of the Soviet Union, the firm also became involved in facilitating the global privatization
Privatization

Privatization is the incidence or process of transferring ownership of business from the public sector to the private sector . In a broader sense, privatization refers to transfer of any government function to the private sector including governmental functions like revenue collection and law enforcement....
 movement by advising companies that were spinning off from their parent governments.

In 1986, the firm formed Goldman Sachs Asset Management, which manages the majority of its mutual funds and hedge fund
Hedge fund

A hedge fund is an investment fund open to a limited range of investors that is permitted by regulators to undertake a wider range of activities than other investment funds and also pays a performance fee to its investment management....
s today. In the same year, the firm also underwrote the IPO of Microsoft
Microsoft

Microsoft Corporation is a multinational corporation computer technology corporation that develops, manufactures, licenses, and supports a wide range of computer software products for computing devices....
, advised General Electric
Gê

G? are the people who spoke Ge languages of the northern South American Caribbean coast and Brazil, their society is or was highly egalitarian and anti-authoritarian, because of which they resisted the Incas as well as the Spaniards....
 on its acquisition of RCA
RCA

RCA Corporation, founded as Radio Corporation of America, was an electronics company in existence from 1919 to 1986. Today, the RCA is owned by the France conglomerate Thomson SA through RCA Trademark Management S.A., a company owned by Thomson....
 and joined the London
London Stock Exchange

The London Stock Exchange or LSE is a stock exchange located in London, United Kingdom. Founded in 1801, it is one of the largest stock exchanges in the world, with many overseas listings as well as British companies....
 and Tokyo stock exchange
Tokyo Stock Exchange

The , or TSE, located in Tokyo, Japan, is the second largest stock exchange market in the world by market value, second only to the New York Stock Exchange....
s. 1986 also was the year when Goldman became the first United States
United States

The United States of America is a Federal government constitutional republic comprising U.S. state and a federal district. The country is situated mostly in central North America, where its Contiguous United States and Washington, D.C., the Capital districts and territories, lie between the Pacific Ocean and Atlantic Oceans, Borders of the U...
 bank to rank in the top 10 of mergers and acquisitions in the United Kingdom
United Kingdom

The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom , the UK or Britain,is a sovereign state located off the northwestern coast of continental Europe....
. During the 1980s the firm became the first bank to distribute its investment research electronically and created the first public offering of original issue deep-discount bond
Bond (finance)

In finance, a bond is a debt security , in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest and/or to repay the principal at a later date, termed Maturity ....
.

Robert Rubin
Robert Rubin

Robert Edward Rubin served as the 70th United States Secretary of the Treasury during both the first and second Bill Clinton administrations. Before his government service, he spent 26 years at Goldman Sachs....
 and Stephen Friedman
Stephen Friedman (PFIAB)

Stephen Friedman is the current Chairman of the United States President's Foreign Intelligence Advisory Board. He was nominated on October 27, 2005 to replace Brent Scowcroft in the position....
 assumed the Co-Senior Partnership in 1990 and pledged to focus on globalization
Globalization

Globalization in its literal sense is the process of transformation of local or regional phenomena into global ones. It can be described as a process by which the people of the world are unified into a single society and function together....
 of the firm and strengthening the Merger & Acquisition and Trading business lines. During their reign, the firm introduced paperless trading to the New York Stock exchange and lead-managed the first-ever global debt offering by a U.S. corporation. It also launched the Goldman Sachs Commodity Index
Goldman Sachs Commodity Index

The S&P GSCI serves as a benchmark for investment in the commodity markets and as a measure of commodity performance over time. It is a tradable index that is readily available to market participants of the Chicago Mercantile Exchange....
 (GSCI) and opened a Beijing
Beijing

is a metropolis in northern China and the Capital of the People's Republic of China. It is one of the four municipality of China, which are equivalent to province in China's Political divisions of China....
 office in 1994. It was this same year that Jon Corzine
Jon Corzine

Jon Stevens Corzine is the Governor of New Jersey and a former United States Senator. He was sworn into office on January 17, 2006, for a four-year term ending in 2010, and has said that he intends to run for re-election in 2009....
 assumed leadership of the firm following the departure of Rubin and Friedman. The firm joined David Rockefeller
David Rockefeller

David Rockefeller Sr. is an United States banker, statesman, globalist, and the current patriarch of the Rockefeller family. He is the youngest and only surviving child of John D....
 and partners in a 50-50 join ownership of Rockefeller Center
Rockefeller Center

Rockefeller Center is a complex of 19 commerce buildings covering between 48th and 51st streets in New York City. Built by the Rockefeller family, it is located in the center of Midtown Manhattan, spanning between Fifth Avenue and Seventh Avenue ....
 during 1994, but later sold the shares to Tishman Speyer in 2000. In 1996, Goldman was lead underwriter of the Yahoo!
Yahoo!

Yahoo! Inc. is an United States public company corporation with headquarters in Sunnyvale, California, , and provides Internet services worldwide....
 IPO and in 1998 it was global coordinator of the NTT DoCoMo
NTT DoCoMo

is the predominant mobile phone operator in Japan. The name is officially an abbreviation of the phrase, "do communications over the mobile network", and is also from a phrase dokodemo, meaning "everywhere" in Japanese language....
 IPO. In 1999, Henry Paulson took over as Senior Partner.

One of the largest events in the firm's history was its own IPO
Initial public offering

Initial public offering , also referred to simply as a "public offering" or "flotation," is when a company issues common stock or Share to the public for the first time....
 in 1999. The decision to go public was one that the partners debated for decades. In the end, Goldman decided to offer only a small portion of the company to the public, with some 48% still held by the partnership pool. 22% of the company is held by non-partner employees, and 18% is held by retired Goldman partners and two longtime investors, Sumitomo Bank Ltd. and Hawaii
Hawaii

File:Pahoehoe and Aa flows at Hawaii.jpgThe State of Hawaii is a U.S. state in the United States, located on an archipelago in the central Pacific Ocean southwest of the continental United States, southeast of Japan, and northeast of Australia....
's Kamehameha Activities Assn (the investing arm of Kamehameha Schools
Kamehameha Schools

Kamehameha Schools, formerly called Kamehameha Schools/Bishop Estate, is a private co-educational college-preparatory institution in Hawaii that operates three campuses statewide: Kapalama , Pukalani , and Kamehameha Schools Hawaii Campus....
). This leaves approximately 12% of the company as being held by the public. With the firm's 1999 IPO, Henry Paulson
Henry Paulson

Henry Merritt "Hank" Paulson Jr. served as the 74th United States Secretary of the Treasury and is a member of the International Monetary Fund Board of Governors....
 became Chairman and Chief Executive Officer
Chief executive officer

A chief executive officer or chief executive is typically the highest-ranking Corporate title or Administration in charge of total management of a corporation, company, non-profit organization, or government agency, reporting to the board of directors....
 of the firm.

In 1999 Goldman acquired Hull Trading Company, one of the world's premier market-making firms, for $531 million. More recently, the firm has been busy both in investment banking and in trading activities. It purchased Spear, Leeds, & Kellogg, one of the largest specialist firms on the New York Stock Exchange, for $6.3 billion in September 2000. It also advised on a debt offering for the Government of China
Government of the People's Republic of China

Power within the government of the People's Republic of China is divided among three bodies: the Communist Party of China, the state, and the People's Liberation Army....
 and the first electronic offering for the World Bank
World Bank

The World Bank is a bank that provides financial and technical assistance to developing countries for development programs with the stated goal of reducing poverty....
. It merged with JBWere, the Australian investment bank and opened a full-service broker-dealer in Brazil. It expanded its investments in companies to include Burger King
Burger King

Burger King , often abbreviated to BK, is a global chain store of hamburger fast food restaurants. Burger King is headquartered at 5505 Blue Lagoon Drive in unincorporated Miami-Dade County, Florida, Florida, United States....
, McJunkin Corporation, and in January 2007, Alliance Atlantis
Alliance Atlantis

Alliance Atlantis Communications Inc. is a Toronto-based media company that operated primarily as a specialty service operator in Canada. Alliance Atlantis also had offices in Halifax Urban Area, Los Angeles, London, Dublin, Madrid, Barcelona, Shannon Town and Sydney....
 alongside CanWest Global Communications
CanWest Global Communications

Canwest Global Communications Corp. , operating under the corporate brand Canwest, is one of Canada's largest international Mass media corporation....
 to own sole broadcast rights to the CSI franchise
CSI franchise

CSI is a media franchise of United States television programs created by Anthony E. Zuiker and originally broadcast on CBS, all of which deal with forensic scientists as they unveil the circumstances behind mysterious and unusual deaths and crimes committed....
. The firm is also heavily involved in energy trading, including the oil speculation market, on both a principal and agent basis.

Its sizable profits made during the 2007 Subprime mortgage financial crisis led the New York Times to proclaim that Goldman Sachs is without peer in the world of finance. The firm's viability was later called into question as the crisis intensified in September 2008.

In May 2006, Henry Paulson
Henry Paulson

Henry Merritt "Hank" Paulson Jr. served as the 74th United States Secretary of the Treasury and is a member of the International Monetary Fund Board of Governors....
 left the firm to serve as U.S. Treasury Secretary
United States Secretary of the Treasury

The United States Secretary of the Treasury is the head of the United States Department of the Treasury, concerned with finance and monetary matters, and, until 2003, some issues of national security and defense....
, and Lloyd Blankfein was promoted to Chairman and Chief Executive Officer. Former Goldman employees head the New York Stock Exchange, the World Bank, the U.S. Treasury Department, the White House staff, and firms such as Citigroup and Merrill Lynch.

On September 21, 2008, Goldman Sachs received Federal Reserve approval to transition from an investment bank to a bank holding company
Bank holding company

A bank holding company is a Holding company which controls one or more banks....
.

On September 22, 2008, the last two major investment banks in the United States, Morgan Stanley and Goldman Sachs, both confirmed that they would become traditional bank holding companies, bringing an end to the era of investment banking on Wall Street
Wall Street

Wall Street is a street in lower Manhattan, New York City, New York, United States. It runs east from Broadway to South Street on the East River, through the historical center of the Financial District, Manhattan....
. The Federal Reserve's approval of their bid to become banks ended the ascendancy of the securities firms, 75 years after Congress separated them from deposit-taking lenders, and capped weeks of chaos that sent Lehman Brothers Holdings Inc. into bankruptcy and led to the rushed sale of Merrill Lynch & Co. to Bank of America Corp.

http://www.dailymail.co.uk/news/worldnews/article-1081624/Goldman-Sachs-ready-hand-7BILLION-salary-bonus-package--6bn-bailout.html

Corporate affairs

, Goldman Sachs employed 23,467 people worldwide. It reported earnings of US$9.34 billion and record earnings per share of $19.69. It was reported that the average total compensation per employee in 2006 was US$622,000. However, this number represents the arithmetic mean
Arithmetic mean

In mathematics and statistics, the arithmetic mean of a list of numbers is the sum of all of the list divided by the number of items in the list....
 of total compensation and is highly skewed upwards as several hundred of the top earners command the majority of the Bonus Pools, leaving the median that most employees earn well below this number. In Business Week's recent release of the Best Places to Launch a Career 2008, Goldman Sachs was ranked #4 out of 119 total companies on the list. The current Chief Executive Officer is Lloyd C. Blankfein. The company ranks #1 in Annual Net Income
Net income

Net income is equal to the income that a firm has after subtracting costs and expenses from the total revenue. Net income can be distributed among holders of common stock as a dividend or held by the firm as retained earnings....
 when compared with 86 peers in the Investment Services sector. Blankfein earned a $67.9 million bonus in his first year. He chose to receive "some" cash unlike present United States Secretary of the Treasury
United States Secretary of the Treasury

The United States Secretary of the Treasury is the head of the United States Department of the Treasury, concerned with finance and monetary matters, and, until 2003, some issues of national security and defense....
 Henry Paulson
Henry Paulson

Henry Merritt "Hank" Paulson Jr. served as the 74th United States Secretary of the Treasury and is a member of the International Monetary Fund Board of Governors....
, his predecessor who chose to take his bonus entirely in company stock.

Recently Goldman Sachs has been increasingly involved in both advising and brokering deals to privatize major highway
Highway

A highway is a main road intended for travel by the public between important destinations, such as city and towns. Highway designs vary widely and can range from a two-lane road without margins to a multi-lane, grade separated freeway....
s by selling them off to foreign investors. In addition to advising Indiana
Indiana

The State of Indiana was the 19th U.S. state admitted into the union. It is located in the Midwestern United States of the United States of America....
 on the Toll Road
Toll road

A toll road, , is a road for which a driver pays a toll for use. Structures for which tolls are charged include toll bridges and toll tunnels....
 deal, Goldman Sachs has worked with Texas
Texas

Texas is a U.S. state located in the South Central United States, nicknamed the Lone Star State. Texas is the second largest U.S. state in both area and population, spanning , and with a growing population of 24.3 million residents....
 governor Rick Perry
Rick Perry

James Richard "Rick" Perry is a Republican Party politician and the current List of Governors of Texas.Elected Lieutenant Governor of Texas in 1998, he assumed office as governor in December 2000 when Governor George W....
's administration on privatization
Privatization

Privatization is the incidence or process of transferring ownership of business from the public sector to the private sector . In a broader sense, privatization refers to transfer of any government function to the private sector including governmental functions like revenue collection and law enforcement....
 projects, and according to John Schmidt, the former adviser to the Chicago
Chicago

Chicago is the largest city in the U.S. state of Illinois and the Midwestern United States, as well as the List of United States cities by population city in the United States with more than 2.8 million residents....
 mayor's office, it was a Goldman Sachs representative who first pitched the city on the idea of leasing out the Skyway
Skyway

In an urban area setting, a skyway, Footbridge#Catwalk, or skywalk is a type of pedway consisting of an Covered bridge or covered Foot bridge between two buildings....
. Goldman Sachs has played a major role in advising states on how to structure privatization deals—even while positioning itself to invest in the toll road
Toll road

A toll road, , is a road for which a driver pays a toll for use. Structures for which tolls are charged include toll bridges and toll tunnels....
 market. Conflicts of interest in such transactions are difficult to quantify.

Goldman Sachs is divided into three businesses.

Investment banking

Investment Banking
Investment banking

An Investment Bank is a financial institution that deals with raising capital, trading in securities and managing corporate mergers and acquisitions....
 is divided into two divisions and includes Financial Advisory (mergers and acquisitions
Mergers and acquisitions

The phrase mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling and combining of different corporation that can aid, finance, or help a growing company in a given industry grow rapidly without having to create another business entity....
, investitures, corporate defense activities, restructurings and spin-offs) and Underwriting (public offerings and private placements of equity
STOCK

Software for fixed assets management and stock control developed in 2004. Stocktaking process is carried using a hand-held mobile terminal equipped with barcode reader or RFID technology....
, equity-related and debt instruments). Goldman Sachs is one of the leading investment banks, appearing in league tables
Thomson Financial League Tables

Thomson Financial's standard league tables are rankings of Investment Banks in terms of the dollar volume of deals they work on. New standard league table sessions in compliance with 2004 league table criteria for Debt, Stock, Syndicated loan, Project Finance and M&A are currently available....
. In mergers and acquisitions, it gained fame historically by advising clients on how to avoid hostile takeovers, moves generally viewed as unfriendly to shareholders of targeted companies. Goldman Sachs, for a long time during the 1980s, was the only major investment bank with a strict policy against helping to initiate a hostile takeover, which increased Goldman's reputation immensely among sitting management teams at the time. The investment banking segment accounts for around 17 percent of Goldman Sachs' revenues.

Trading & Principal Investments

Trading and Principal Investments is the largest of the three segments, and is the company's profit center. The segment is divided into three divisions and includes Fixed Income, Currency and Commodities (trading in interest rate
Interest rate

An interest rate is the price a borrower pays for the use of money they do not own, for instance a small company might borrow from a bank to kick start their business, and the return a lender receives for deferring the use of funds, by lending it to the borrower....
 and credit
Credit (finance)

Credit is the provision of resources by one party to another party where that second party does not reimburse the first party immediately, thereby generating a debt, and instead arranges either to repay or return those resources at a later date....
 products, mortgage-backed securities
Mortgage-backed security

A mortgage-backed security is an asset-backed security whose cash flows are backed by the principal and interest payments of a set of mortgage loans....
 and loans, currencies and commodities, structured and derivative products), Equities (trading in equities, equity-related products, equity derivatives, structured products and executing client trades in equities, options
Option (finance)

In finance, an option is a contract between a buyer and a seller that gives the buyer the right?but not the obligation?to buy or to sell a particular asset at a later time at an agreed price....
, and Futures contract
Futures contract

In finance, a futures contract is a standardized contract, traded on a futures exchange, to buy or sell a standardized quantity of a specified commodity of standardized quality at a certain date in the future, at a price determined by the instantaneous equilibrium between the forces of supply and demand among competing buy and sell orders...
s on world markets), and Principal Investments (merchant banking investments and funds). This segment consists of the revenues and profit gained from the Bank's trading activities, both on behalf of its clients (known as flow trading) and for its own account (known as proprietary trading
Proprietary trading

Proprietary trading is a term used in investment banking to describe when the firm's traders actively trade stocks, Bond s, Option , commodities, derivative or other financial instruments with its own money as opposed to its customers' money, so as to make a profit for itself....
).

Most trading done by Goldman is not speculative
Speculation

Speculation is the assumption of the risk of loss, in return for the uncertain possibility of a reward. Only if one may safely say that a particular position involves no risk may one say, strictly speaking, that such a position represents an "investment." Financial speculation involves the trade, and short-selling of stocks, bond , commodity...
, but rather an attempt to profit from bid-ask spreads
Bid-offer spread

The bid/offer spread for securities is the difference between the price quoted by a market maker for an immediate sale and an immediate purchase ....
 in the process of acting as a market maker
Market maker

A market maker is a business organizations that quotes both a buy and a sell price in a financial instrument or commodity, hoping to make a profit on the bid/offer spread, or turn ....
. Around 68 percent of Goldman's revenues and profits are derived from this area. Upon its IPO, Goldman predicted that this segment would not grow as fast as its Investment Banking division and would be responsible for a shrinking proportion of earnings. The opposite has been true however, resulting in Lloyd Blankfein
Lloyd Blankfein

Lloyd Craig Blankfein is the current Chief Executive Officer and Chair of The Goldman Sachs Group, Inc. After the May 31, 2006 nomination of former CEO Hank Paulson as Secretary of the Treasury, Blankfein was announced as his replacement....
's appointment to President and Chief Operating Officer after John Thain
John Thain

John Alexander Thain was the last chairman and chief executive officer of Merrill Lynch before its distressed merger with Bank of America. Thain was designated to become president of global banking, securities, and wealth management at the newly combined company, but he resigned on January 22, 2009....
's departure to run the NYSE and John L. Thornton
John L. Thornton

John L. Thornton is Professor and Director of Global Leadership at Tsinghua University in Beijing. He is a former President and Co-COO of Goldman Sachs....
's departure for an academic position in China.

Asset management and securities services

Asset Management and Securities Services is a rapidly growing business for Goldman as it gains market share. It is separated into two divisions, and includes Asset Management, which provides large institutions and very wealthy individuals with investment advisory, financial planning services (Private Wealth Management & AYCO), and the management of mutual fund
Mutual fund

A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests it in stocks, Bond , short-term money market instruments, and/or other security ....
s, as well as the so-called alternative investments (hedge fund
Hedge fund

A hedge fund is an investment fund open to a limited range of investors that is permitted by regulators to undertake a wider range of activities than other investment funds and also pays a performance fee to its investment management....
s, funds of funds
Fund of funds

A "fund of funds" is an collective investment scheme that uses an investment strategy of holding a portfolio of other investment funds rather than investing directly in shares, bond s or other securities....
, infrastructure funds, real estate funds, and private equity fund
Private equity fund

Private equity fund is a pooled investment vehicle used for making investments in various equity securities according to one of the investment strategies associated with private equity....
s). The Securities Services division provides prime brokerage
Prime brokerage

Prime brokerage is the generic name for a bundled package of services offered by investment banks and securities firms to hedge funds and other professional investors needing the ability to borrow securities and cash to be able to invest on a leveraged basis and achieve an absolute return....
, financing services, and securities lending to mutual funds, hedge funds, pension fund
Pension fund

A pension fund is a pool of assets forming an independent legal entity that are bought with the contributions to a pension plan for the exclusive purpose of financing pension plan benefits....
s, foundations, and High net worth individual
High net worth individual

A high net worth individual is a person with a high net worth. In the private banking business, these individuals typically are defined as having investable assets in excess of US$1 million....
s. This segment accounts for around 19 percent of Goldman's earnings .

David Blood is the former CEO of Goldman Sachs Asset Management.

In 2006, the Goldman Sachs Asset Management hedge fund
Hedge fund

A hedge fund is an investment fund open to a limited range of investors that is permitted by regulators to undertake a wider range of activities than other investment funds and also pays a performance fee to its investment management....
 was the largest in the United States
United States

The United States of America is a Federal government constitutional republic comprising U.S. state and a federal district. The country is situated mostly in central North America, where its Contiguous United States and Washington, D.C., the Capital districts and territories, lie between the Pacific Ocean and Atlantic Oceans, Borders of the U...
 with $29.5 billion under management. , the fund was valued at $32.5 billion, the second-largest fund hedge fund after competitor JP Morgan's $33.1 billion fund.

In August 2007, it emerged that Goldman had to spend $2 billion to rescue its own Global Equity Opportunities hedge fund
Hedge fund

A hedge fund is an investment fund open to a limited range of investors that is permitted by regulators to undertake a wider range of activities than other investment funds and also pays a performance fee to its investment management....
 from "significant market dislocation".

GS Capital Partners

GS Capital Partners is the private equity arm of Goldman Sachs. It has invested over $17 billion in the 20 years from 1986 to 2006. One of the most prominent funds is the GS Capital Partners V fund, which comprises over $8.5 billion of equity
Ownership equity

In accounting terms, after all liability are paid, ownership equity is the remaining interest in assets. If valuations placed on assets do not exceed liabilities, negative equity exists....
. On April 23, 2007, Goldman closed GS Capital Partners VI with $20 billion in committed capital, $11 billion from qualified institutional and high net worth clients and $9 billion from the firm and its employees. GS Capital Partners VI is the current primary investment vehicle for Goldman Sachs to make large, privately negotiated equity investments.

Major Assets (GS Group)
  • The Ayco Company, L.P. (Financial Advisory)
  • Cogentrix Energy (Energy)
  • American Casino & Entertainment Properties (Casinos)
  • Coffeyville Resources LLC
    Coffeyville Resources LLC

    Coffeyville Resources LLC also known as the COOP Refinery is now owned and operated by Coffeyville Resources Refining & Marketing, LLC, this state-of-the-art refinery employs 415 people and produces approximately 2.1 million gallons of gasoline per day, and 1.7 million gallons of middle distillates per day, predominantly diesel oil....
     (Oil Refinery)
  • Myers Industries, Inc. (Plastic & Rubber)
  • USI Holdings Corporation (Insurance & Finance)
  • East Coast Power LLC (Energy)
  • Queens Moat Houses (Hotels)
  • Sequoia Credit Consolidation (Finance)
  • Shineway Group (Meat Processing)
  • Equity Inns, Inc. (Hotels)
  • KarstadtQuelle property group (Retailer)
  • Nursefinders Inc. (Healthcare)
  • Latin Force Group, LLC (Media)


Predictions

In December 2005, four years after its report on the emerging "BRIC
BRIC

In economics, BRIC or BRICs is an acronym that refers to the Emerging markets of Brazil, Russia, India, and People's Republic of China....
" economies (Brazil
Brazil

Brazil , officially the Federative Republic of Brazil , is a country in South America. It is the List of countries and outlying territories by total area country by geographical area, occupying nearly half of South America, the List of countries by population country, and the fourth most populous democracy in the world....
, Russia
Russia

Russia , or the Russian Federation , is a list of countries spanning more than one continent country extending over much of northern Eurasia....
, India
India

India, officially the Republic of India , is a country in South Asia. It is the List of countries and outlying territories by total area country by geographical area, the List of countries by population country, and the most populous liberal democracy in the world....
, and China
China

China is a Culture of China, an ancient civilization, and, depending on perspective, a national or multinational entity extending over a large area in East Asia....
), Goldman Sachs named its "Next Eleven
Next Eleven

The Next Eleven are eleven countries ? Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, The Philippines, South Korea, Turkey, and Vietnam ? identified by Goldman Sachs investment bank as having a high potential of becoming the world's largest economies in the 21st century along with the BRICs....
" list of countries, using macroeconomic stability, political maturity, openness of trade and investment policies and quality of education as criteria: Bangladesh
Bangladesh

, officially the People's Republic of Bangladesh is a country in South Asia. It is bordered by India on all sides except for a small border with Burma to the far southeast and by the Bay of Bengal to the south....
, Egypt
Egypt

Egypt is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Western Asia. Covering an area of about , Egypt borders the Mediterranean Sea to the north, the Gaza Strip and Israel to the northeast, the Red Sea to the east, Sudan to the south and Libya to the west....
, Indonesia
Indonesia

The Republic of Indonesia , is a transcontinental country in Southeast Asia and Oceania. Comprising Islands of Indonesia, it is the world's largest Archipelago state....
, Iran
Iran

Iran , officially the Islamic Republic of Iran and formerly known internationally as Persian Empire until 1935, is a country in Central Eurasia, located on the northeastern shore of the Persian Gulf and the southern shore of the Caspian Sea....
, South Korea
South Korea

South Korea, officially the Republic of Korea , ), often referred to as Korea and the "names of Korea#Revival of the names", is a Semi-presidential system republic in East Asia, located in the southern half of the Korean Peninsula....
, Mexico
Mexico

The United Mexican States , commonly known as Mexico , is a federalism constitutionalism republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of Mexico....
, Nigeria
Nigeria

Nigeria, officially the Federal Republic of Nigeria, is a federation constitutional republic comprising States of Nigeria and one Federal Capital Territory, Nigeria....
, Pakistan
Pakistan

Pakistan , officially the Islamic Republic of Pakistan, is a country located in South Asia and borders Central Asia and the Middle East. It has a 1,046 kilometre coastline along the Arabian Sea and Gulf of Oman in the south, and is bordered by Afghanistan and Iran in the west, India in the east and People's Republic of China in th...
, the Philippines
Philippines

The Philippines, officially known as the Republic of the Philippines, is a country in Southeast Asia with Manila as its capital city. It comprises 7,107 islands in the western Pacific Ocean....
, Turkey
Turkey

Turkey , known officially as the Republic of Turkey , is a Eurasian country that stretches across the Anatolian peninsula in southwest Asia and Thrace in the Balkans region of Southern Europe....
 and Vietnam
Vietnam

Vietnam , officially the Socialist Republic of Vietnam , is the easternmost country on the Indochina Peninsula in Southeast Asia. It is bordered by People's Republic of China to the north, Laos to the northwest, Cambodia to the southwest, and the South China Sea to the east....
.

Corporate citizenship

Goldman Sachs has received favorable press coverage for conducting business and implementing internal policies related to reversing global climate change. According to the company web site, the Goldman Sachs Foundation has given $94 million in grants since 1999, with the goal of promoting youth education worldwide. The company also has been on Fortune Magazine's 100 Best Companies to Work For list since the list was launched in 1998.

In November 2007, Goldman Sachs established a donor
Donor

A donor in general is a person that donations something voluntarily. Usually used to represent a form of pure altruism but sometimes used when the payment for a service is recognised by all parties as representing less than the value of the donation and that the motivation is altruistic....
-advised fund called Goldman Sachs Gives that donates to charitable organizations around the world, while increasing their maximum employee donation match to $20,000.

Charitable Services Group

Goldman Sachs Foundation

Alumni

  • Henry H. Fowler
    Henry H. Fowler

    Henry Hammill Fowler was an United States lawyer and politician.Born in Roanoke, Virginia, he graduated from Roanoke College in 1929 and received his law degree from Yale Law in 1932....
     - 58th United States Secretary of the Treasury
    United States Secretary of the Treasury

    The United States Secretary of the Treasury is the head of the United States Department of the Treasury, concerned with finance and monetary matters, and, until 2003, some issues of national security and defense....
     (1965-1969)
  • Robert Rubin
    Robert Rubin

    Robert Edward Rubin served as the 70th United States Secretary of the Treasury during both the first and second Bill Clinton administrations. Before his government service, he spent 26 years at Goldman Sachs....
     - Former United States Treasury
    United States Department of the Treasury

    The Department of the Treasury is an United States federal executive departments and the treasury of the United States Federal government of the United States....
     Secretary, ex-Chairman of Citigroup
    Citigroup

    Citigroup Inc., doing business as Citi, is a major United States financial services company based in New York City. Citigroup was formed from one of the world's largest mergers in history by combining the banking giant Citicorp and financial conglomerate Travelers Group on April 7, 1998....
    .
  • Henry Paulson
    Henry Paulson

    Henry Merritt "Hank" Paulson Jr. served as the 74th United States Secretary of the Treasury and is a member of the International Monetary Fund Board of Governors....
     - Former United States Treasury
    United States Department of the Treasury

    The Department of the Treasury is an United States federal executive departments and the treasury of the United States Federal government of the United States....
     Secretary.
  • Edward Lampert
    Edward Lampert

    Edward S. "Eddie" Lampert is an United States investor, financier and businessman.He is the chairman of Sears Holdings Corporation and founder, chairman of the board, and CEO of ESL Investments....
    - Hedge Fund Manager of ESL Investments. Brought K-Mart out of Bankruptcy in 2003.
  • Joshua Bolten - former White House Chief of Staff
    White House Chief of Staff

    The White House Chief of Staff is the highest ranking member of the Executive Office of the President of the United States and a senior aide to the President of the United States....
  • Erin Burnett
    Erin Burnett

    Erin Isabelle Burnett is a business news anchor, reporter and interviewer for CNBC television. She is the co-anchor of CNBC's Squawk on the Street program, weekdays from 9-11am EST....
     - CNBC Host
  • Jon Corzine
    Jon Corzine

    Jon Stevens Corzine is the Governor of New Jersey and a former United States Senator. He was sworn into office on January 17, 2006, for a four-year term ending in 2010, and has said that he intends to run for re-election in 2009....
     - Governor of the State of New Jersey.
  • Michael Cohrs
    Michael Cohrs

    Michael Cohrs is an American banker. He is the head of Global Banking at Deutsche Bank, which comprises the mergers and acquisitions , global capital markets, coverage and global transaction banking businesses....
     - Head of Global Banking at Deutsche Bank
    Deutsche Bank

    Deutsche Bank Aktiengesellschaft is an international Universal bank with a broad private clients franchise, headquartered in Frankfurt am Main, Germany....
  • Emanuel Derman
    Emanuel Derman

    Emanuel Derman is a South African-born academic and businessman. He is best known as a quantitative analyst, and author of the book My Life as a Quant: Reflections on Physics and Finance....
     - Author of My Life as a Quant and co-developer of the Black-Derman-Toy model.
  • Jim Cramer - founder of TheStreet.com, best selling author, and host of Mad Money on CNBC
  • Ashwin Navin
    Ashwin Navin

    Ashwin Navin was the President and Co-Founder of BitTorrent, Inc. He joined Bram Cohen, the inventor of BitTorrent , in 2004 and reportedly handled business and company-related matters while Cohen focused on engineering and product development....
     - President and co-founder of BitTorrent, Inc.
  • Abby Joseph Cohen
    Abby Joseph Cohen

    Abby Joseph Cohen is an United States economist and financial analyst on Wall Street. She is a partner and??Senior U.S. investment strategist at Goldman Sachs....
     - Perma-bull market forecaster formerly of Drexel Burnham Lambert
    Drexel Burnham Lambert

    Drexel Burnham Lambert was a major Wall Street investment banking firm, which first rose to prominence and then was driven into bankruptcy in February 1990 by its involvement in illegal activities in the junk bond market, driven by Drexel employee Michael Milken....
  • George Herbert Walker IV
    George Herbert Walker IV

    George Herbert Walker IV is the CEO of Neuberger Berman. Formerly a partner and Managing Director at Goldman Sachs, Walker was recruited to rival investment bank, Lehman Brothers, to head its Investment Management Division, of which Neuberger was a part....
     - member of the Bush family
    Bush family

    The Bush family is a prominent United States family. Along with many members who have been successful bankers and businessmen, across three generations the family includes two U.S....
     and current managing director at Neuberger Berman
    Neuberger Berman

    Neuberger Berman Inc., through its subsidiaries, primarily Neuberger Berman, LLC, is an investment management firm that provides financial services for high net worth individuals and institutional investors....
  • Robert Zoellick
    Robert Zoellick

    Robert Bruce Zoellick is the eleventh president of the World Bank Group, a position he has held since July 1, 2007. He was previously a managing director of Goldman Sachs, United States United States Deputy Secretary of State and Office of the United States Trade Representative, from February 7, 2001 until February 22, 2005....
     - United States Trade Representative
    Office of the United States Trade Representative

    The Office of the United States Trade Representative, or USTR, is the United States government agency responsible for developing and recommending United States trade policy to the President of the United States, conducting trade negotiations at bilateral and multilateral levels, and coordinating trade policy within the government throu...
     (2001-2005), Deputy Secretary of State (2005-2006), World Bank
    World Bank

    The World Bank is a bank that provides financial and technical assistance to developing countries for development programs with the stated goal of reducing poverty....
     President    .
  • Mark Carney
    Mark Carney

    Mark J. Carney is the Governor of the Bank of Canada. He was appointed on February 1, 2008 for a term of seven years. He is the youngest of any central bank governor within the G8 nations....
     - Current Governor of the Bank of Canada
    Bank of Canada

    The Bank of Canada is Canada's central bank. It was created by the Bank of Canada Act of 1934, to "promote the economic and financial well-being of Canada." It is the sole issuer of Canadian banknotes in Canada, and the central bank for the Canadian dollar....
     
  • Michael D. Fascitelli
    Michael D. Fascitelli

    Michael D. Fascitelli is President and a Trustee of the Board of Vornado Realty Trust. He also is President and a Trustee of Alexander's Inc. and on the Board of Toys "R" Us....
    - President & Trustee of Vornado Realty Trust
    Vornado Realty Trust

    Vornado Realty Trust is a New York based real estate investment trust. It is the inheritor of real estate formerly controlled by companies including Two Guys and Alexander's....
    .
  • Neel Kashkari
    Neel Kashkari

    Neel T. Kashkari is the Interim Assistant Secretary of the Treasury for Financial Stability in the United States Department of the Treasury. In this role, he heads the Office of Financial Stability, the office set up to buy troubled financial assets from U.S....
     - Assistant Secretary of the Treasury for Financial Stability
  • Charlie Haas
    Charlie Haas

    Charles Doyle "Charlie" Haas II is an American professional wrestling and former amateur wrestler currently signed to World Wrestling Entertainment wrestling on its WWE Raw brand....
     - Wrestler, who is working for World Wrestling Entertainment
    World Wrestling Entertainment

    World Wrestling Entertainment, Inc. is a publicly traded, privately controlled integrated arts and sports entertainment company dealing primarily in professional wrestling, with major revenue also coming from film, music, product licensing, and direct product sales....
    .
  • Malcolm Turnbull
    Malcolm Turnbull

    Malcolm Bligh Turnbull is an Australian politician, the current Leader of the Opposition in the Parliament of Australia, and parliamentary leader of the Liberal Party of Australia, succeeding Brendan Nelson on 16 September 2008....
     - Australian politician, currently the federal leader of the Liberal Party of Australia
    Liberal Party of Australia

    The Liberal Party of Australia is an List of political parties in Australia.Founded a year after the Australian federal election, 1943 to replace the United Australia Party, the centre-right Liberal Party competes with the centre-left Australian Labor Party for political office....
    .
  • John Thain
    John Thain

    John Alexander Thain was the last chairman and chief executive officer of Merrill Lynch before its distressed merger with Bank of America. Thain was designated to become president of global banking, securities, and wealth management at the newly combined company, but he resigned on January 22, 2009....
     - former Chairman and CEO, Merrill Lynch, and former chairman of the NYSE.
  • Robert Steel
    Robert K. Steel

    Robert King Steel is the former President and CEO of Wachovia Corporation. He does not have a major role in the company after its merger with Wells Fargo....
     - Chairman and President, Wachovia.
  • Reuben Jeffery III
    Reuben Jeffery III

    Reuben Jeffery III is the current United States Under Secretary of State for Economic, Business, and Agricultural Affairs, having been appointed to that position by United States President George W....
    , Under Secretary of State for Economic, Business, and Agricultural Affairs (2007-)


Criticism and controversy

In 1986, David Brown was convicted of passing inside information to Ivan Boesky
Ivan Boesky

Ivan Frederick Boesky was notable for his prominent role in a Wall Street insider trading scandal that occurred in the United States in the mid-1980s....
 on a takeover deal. Robert Freeman, who was a senior Partner, the Head of Risk Arbitrage, and a protégé of Robert Rubin
Robert Rubin

Robert Edward Rubin served as the 70th United States Secretary of the Treasury during both the first and second Bill Clinton administrations. Before his government service, he spent 26 years at Goldman Sachs....
, was also convicted of insider trading, with his own account and with the firms.

On November 11, 2008, that Goldman Sachs, which earned $25 M from underwriting California bonds, had advised other clients to "short" those bonds. Shorting is essentially betting that the state will default on the bonds, which serves to drive up the cost of the issue to the state.

Goldman in the mortgage market


Actions in the 2007- subprime mortgage crisis

Despite the 2007 subprime mortgage crisis
Subprime mortgage crisis

The subprime mortgage crisis is an ongoing financial crisis triggered by a dramatic rise in mortgage delinquency and foreclosures in the United States, with major adverse consequences for banks and financial markets around the globe....
, Goldman was able to profit from the collapse in subprime mortgage bonds in the summer of 2007 by selling subprime mortgage-backed securities short. Two Goldman traders, Michael Swenson and Josh Birnbaum, are credited with bearing responsibility for the firm's large profits during America's sub-prime mortgage crisis. The pair, who are part of Goldman's structured product
Structured product

A structured product is generally a pre-packaged investment strategy which is based on Derivative , such as a single Security , a basket of securities, Option , Index , commodities, debt issuances and/or foreign currencies, and to a lesser extent, swaps....
s group in New York, made a profit of $4bn by "betting" on a collapse in the sub-prime market, and shorting mortgage-related securities. By summer of 2007, they persuaded colleagues to see their point of view and talked around skeptical risk management executives . The firm initially avoided large subprime writedowns, and achieved a net profit due to significant losses on non-prime securitized
Securitization

Securitization is a structured finance process, which involves Pooling and Security #Repackaging of cash flow producing financial assets into Security that are then sold to investors....
 loans being offset by gains on short mortgage positions.

Goldman Sachs' newest acquisitions are to include the subprime portfolio of imploded mortgage company Popular Financial Holdings late in the third quarter of 2008.

Detractors believe that Goldman wasn't quite as careful with its clients' money as it was with its own—its flagship Global Alpha hedge fund
Hedge fund

A hedge fund is an investment fund open to a limited range of investors that is permitted by regulators to undertake a wider range of activities than other investment funds and also pays a performance fee to its investment management....
 tumbled 37% in the global credit crunch. As most individual investments of hedge funds are not made public, however, no one can know exactly what assets the firm traded during the period leading up to the credit crisis.

2008 Berkshire Hathaway Investment in Goldman Sachs

Goldman Sachs, unlike other notable investment companies, did not receive any federal money in the series of financial institution bailouts in 2008. Instead it got help from Berkshire Hathaway
Berkshire Hathaway

Berkshire Hathaway is a list of conglomerates holding company headquartered in Omaha, Nebraska, United States, that oversees and manages a number of subsidiary companies....
, which bought $5 billion in Goldman's preferred stock, and got also warrants to buy another $5 billion in Goldman's common stock

Goldman Sachs' Alternative Mortgage Products

In 2006, Goldmans Sachs' mortgage-bonds division, Alternative Mortgage Products (known as GSAMP for short), issued 83 home-loan-backed bonds, valued at $44.5 billion. In the subprime sector, it grew its business by 59% from 2005, offloading some $12.9 billion on to fund managers.

According to Inside Mortgage Finance, that made GSAMP the 15th biggest issuer of subprime-backed bonds in 2006. According to the website ABAlert.com (Asset-backed Alert), Goldman Sachs was one of the top 10 sellers of Collateralized Mortgage Obligations
Collateralized mortgage obligation

A collateralized mortgage obligation is a financial debt vehicle that was first created in June 1983 by investment banks Salomon Brothers and First Boston for Freddie Mac....
 (CMO's) and may have sold about $100 billion in CMO's over the last two and a half years.

But, by the start of the third quarter this year, those securities were being downgraded by the credit ratings agencies faster than any other subprime lender. According to a Reuters report, Citigroup's research (June 22, 2007), stated "portions of Goldman's GSAMP-issued bonds, which include subprime loans from a variety of lenders, have been downgraded a combined 69 times by Standard & Poor's and Moody's Investors Service in the year through June 15. Sixty of the GSAMP downgrades refer to classes from 2006 bonds," Citigroup added, and Allan Sloane in The Washington Post stated that one of Goldman's 2006 crop - the GSAMP Trust 2006- S3 - may actually be "the worst deal…floated by a top-tier firm." One in every six of the 8,274 mortgages bundled together in GSAMP Trust 2006-S3 was already in default 18 months later. Whoever bought the S3 bonds will have either taken a 100% loss, or are waiting to sell it on at a heavy discount.

Works about Goldman Sachs


See also

  • Goldman Sachs Capital Partners
    Goldman Sachs Capital Partners

    Goldman Sachs Capital Partners is the private equity arm of Goldman Sachs, focused on leveraged buyout and growth capital investments globally....
  • Goldman Sachs Tower
  • Goldman Sachs Commodity Index
    Goldman Sachs Commodity Index

    The S&P GSCI serves as a benchmark for investment in the commodity markets and as a measure of commodity performance over time. It is a tradable index that is readily available to market participants of the Chicago Mercantile Exchange....


External links