Wednesday, October 29, 2008

Goldman Sachs Names 94 New Partners

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Posted by Heidi N. Moore
The day has come: Goldman Sachs Group has announced its list of new partner-level managing directors. It is a poignant one, because they will be the first partner class as Goldman becomes a commercial bank. Deal Journal provides the list, below. More coverage will follow.
Paul R. AaronSanggyun AhnSean J. GallagherGonzalo R. GarciaDavid M. MarcinekBlake W. MatherMagid N. ShenoudaHeather K. ShemiltPhilip S. ArmstrongPaul E. GermainJohn J. McCabeSuhail A. SikhtianCharles BailliePaul GravesJohn J. McGuire Jr.Gavin SimmsPhilip R. BerlinskiE. Glenn HaddenMilton R. Millman IIIMarshall SmithRobert A. BerryJonathan J. HallChristopher MilnerJohn D. StoreyOliver R. BolithoJan HatziusChristina P. MinnisPatrick M. StreetPatrick T. BoyleMartin HintzeTakashi MurataRam K. SundaramStephen Branton-SpeakTodd HohmanTodd G. OwensRobert J. SweeneyAnne F. BrennanJames P. HoughtonCraig W. PackerMichael J. SwensonSamuel S. BrittonPaul J. HuchroGilberto PozziJeffrey M. TomasiJason G. CahillyHidehiro ImatsuLora J. PriceDavid G. TorribleMartin CherAlan S. KavaLorin P. RadtkeFrederick TowfighDenis P. Coleman IIIDimitrios KavvathasRichard N. RamsdenGreg A. TusarKevin P. ConnorsLarry M. KellermanMichael J. RichmanAndrea A. VittorelliJames V. CovelloHideki KinuhataMichael RimlandPaul WalkerAlbert F. DombrowskiJ. Christopher A. KojimaScott A. RomanoffDominic A. WilsonThomas M. DowlingMichiel P. LapJulian SalisburySteve WindsorL. Brooks EntwistleBrian J. LeePaul D. SciallaMartin Wiwen-NilssonStephan J. FeldgoiseDavid A. LehmanPeter E. SciallaDenise A. WyllieBenjamin W. FergusonDeborah R. LeonePeter A. SecciaHan Song ZhuWolfgang FinkJohn S. LindforsRebecca M. ShaghalianTimur F. GalenH.C. LiuDevesh P. Shah
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Read more: Goldman Sachs, The Players

Goldman Sachs Bribed Senate To Pass Bailout Bill

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www.youtube.com/watch?v=Ek7zc0lJxbM

China cuts rates, Fed and others to follow

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29 Oct, 2008, 1908 hrs IST, REUTERS
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LONDON: China cut its interest rate for the third time in six weeks on Wednesday, a measure the United States, Japan and European Central Bank are expected to follow by the end of next week to bolster economies facing recession. While dispensing with a repeat of the coordinated cuts made earlier this month, authorities fear the worst financial crisis in 80 years will usher in a long recession and are looking to individual rate reductions to soften the blow. China, which has said it would not fall victim to the crisis, cut its interest rate to 6.66 percent from 6.93. The People's Bank of China said it would take effect on Thursday. "There's building evidence in China that the slowdown we're seeing everywhere else is taking place there as well," said Derek Halpenny, european head of FX research at BTM-UFG. China has approved a series of policy measures to try to shield it from the crisis, including a cut in costs for home buyers, a rise in export tax rebates and a fund for small and medium-sized businesses. A sharp economic slowdown across the world means even once-booming economies are forced to change policy tack. The Federal Reserve is widely expected to cut US rates by at least half a point to 1 percent, the lowest level since June 2004. Norway's central bank was also seen reducing rates by 50 basis points to 4.75 percent on Wednesday. "The picture is now so depressing that Norges Bank has to do whatever it can to decrease rates ... as quickly as possible," said Inge Furre, economist at Sparebanken Moere. Japan may cut The Bank of Japan will consider cutting rates at a policy meeting on Friday but will watch market conditions before deciding, a source with knowledge of the matter told Reuters. Bets on a quarter-point cut to 0.25 percent reversed a recent surge in the yen, which has hurt exporters and helped force Japanese shares lower. A cut by the world's second biggest economy would "send a message to the world that Japan is cooperating with other nations in tackling the financial crisis," said Koichi Haji, chief economist at NLI Research Institute in Tokyo. The European Central Bank and the Bank of England are expected to ease policy at their regular meetings next week. Falling oil and food prices probably helped to cool German inflation for the third month in a row in October, giving the ECB added scope to cut the rate. A Reuters poll said the bank would cut a half point off rates to 3.25 percent, their lowest in two years. An executive board member of the European Central Bank said growth in the euro zone would be lower than expected. "Confidence will not return until we stop to think about the measures which have been taken and we can see financial institutions resuming their normal activity," Jose Manuel Gonzalez Paramo said in a newspaper interview. The expected rate cuts buoyed Asian and European stocks. Japan's Nikkei ended up 7.7 percent and European shares climbed 5.4 percent, helped higher by China's rate cut.
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Indian cos raise $2.83 bn via ECBs in Sept29 Oct, 2008, 2140 hrs IST

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India firms, including Reliance Industries, have raised $2.83 billion from overseas markets last month.
Oil rises above $66, focus on Fed, dollar 29 Oct, 2008, 2118 hrs IST
Oil rose towards $67 a barrel, as a weaker US dollar and a rise in stock markets overshadowed US weekly data that showed a big jump in distillate inventories.
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'Bankrupt' Lehman Brothers on hiring spree

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'Bankrupt' Lehman Brothers on hiring spree
NEW DELHI: Collapse of the Lehman Brothers in the world's biggest ever bankruptcy story may have sent thousands of its employees flocking the job market, but the 158-year-old American investment bank giant still seems to be in hiring mood. Once known as one of the favourite places to work in the financial services space, especially due to its fat pay packages, Lehman Brothers had a workforce of close to 26,000 employees at the last count. But its filing for bankruptcy protection on September 15 saw nearly all its employees on a lookout for new employers. However, Lehman Brothers seems to be continuing with its hiring activities, as it has posted at least four new job vacancies for the US after its bankruptcy filing. These vacancies are for positions like Investor Accounting Specialist, Foreclosure Specialist and Default Supervisor, and they seem to have been posted on the bank's website a day after the bankruptcy filing or later. In addition, Lehman Brothers has over a dozen recruitment events lined up across the world through September, October and November.
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Wall Street job losses may be Asia's gainThe interested candidates, if any, can register for these recruiting events and presentations in the career section of Lehman's website. "These events are intended for those who are applying for early years programmes, internships or first year Full Time Analyst/Associate programme hires," it says on its website. One such event, "Equities and Fixed Income PhD Recruiting Presentation", is scheduled for as early as September 23 in Massachusetts and is for Harvard and MIT students in their penultimate or final year of their PhD programme. Ten such recruitment events are lined up for the UK, while there are three others for Italy through October and November. While two vacancies -- Investor Accounting Specialist and Supervisor Default positions -- were posted on September 16, it posted one vacancy each on September 17 and 18 for Foreclosure Specialist and Investor Accounting Specialist posts, respectively. However, there has been no new job postings after its bankruptcy filing for Asia-Pacific and Europe and Middle East regions. Lehman has posted at least four job vacancies in September for India, where it employs over 2,500 people, but all of them were posted before the bankruptcy filing. However, a number of job portals continue to have close to 20 recruitment ads for Lehman's India operations for positions like Test Engineer (QA), Java Senior Developer, Prime Services Analyst, Project Manager, Capital Resource Analyst and Vice President - Global Sales & Banking Technology. One of Indian job portals vacancies are also there for the posts of Recruitment Manager and Recruitment Executives at Lehman Brothers. However, these job website postings are believed to have been put before the bank's collapse. Lehman set up BPO operations in India in 2005, and according to the fact-sheet of the firm, the centre saw the number of employees going up by eight times by the middle of this year and had declared its plans to grow the operations. In fact, it was recruiting till as recently as couple of months back.
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Lehman Brothers' bankruptcy to change the face of banking

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LONDON: In what is being described as the Mother of all Mondays, the fabled Wall Street will never be the same again. Financial commentators are talking about a tectonic shift that will change the face of the world's banking sector as we know it. Markets world wide are reeling from the after effects of the triple shock of Lehman Brothers going into bankruptcy, Merrill Lynch being sold to BofA in a distress sale for $ 50 billion, and AIG asking the Fed for a $ 40 billion bailout. The FTSE dropped 200 points, or around 3% in early trades. Former US Fed governor Alan Greenspan describes it as a 'once in a century' event, and the 'worst' he's seen in his career. Lehman Brothers, which has survived over 150 years, finally went into Chapter 11 late Sunday night, putting tens of thousands of jobs at risk all over the world. Merrill Lynch, the other Wall Street major, narrowly avoided Lehman's fate by agreeing to be bought by BofA for USD 50 billion – again raising the spectre of an uncertain future for its thousands of global employees. The US government, which bailed out Fannie Mae, Freddie Mac, and Bear Sterns, put its foot down with Lehman, and last minute potential buyers like Barclays walked out late Sunday night. At Lehman's US offices, television channels captured scenes of employees leaving the building with cardboard boxes, while at its European headquarters in Canary Wharf, where the bank is estimated to employ around 4000 people, the mood was sombre as employees were told to turn up for work, but not to do any business.
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Fannie, Freddie CEOs denied exit bonusesIt is not yet formally announced what the fate of the employees are to be, but it is unlikely that with the bank in administration, many jobs will survive. The Bank of England has issued a statement it will monitor the currency and commodity markets and take 'appropriate steps to stabilise those markets if necessary". Reports say the BoE has offered GBP 5 million extra reserves for sterling currency markets, while the European Central Bank has offered unlimited overnight liquidity. In an effort to limit the impact of Lehman's crash, 10 of the world's biggest banks have come together to create a liquidity pool of USD 70 billion to tide over the crisis. It is reported that PwC is likely to be given the mandate for dismantling the huge operations of Lehman Brothers in UK. Lehman has its Asian headquarters in Tokyo, Japan. As damage reports continue to come in, financial experts expect more major collapses.
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Amid global meltdown, Bush urges world markets to have patience

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For weeks now, global markets have been plummeting. Major governments have pumped big bucks into the banking sector, seemingly to little effect. Even Alan Greenspan, the former Fed chairman and so-called "oracle of Wall Street," told Congress last week that the dysfunctional economy had left him in "a state of shocked disbelief."
So today in his weekly radio address, President Bush tried to calm fears about a global recession by defending the federal government's "bold action to stabilize our economy" with a $700-billion bailout. He cautioned against abandoning capitalism or experimenting with socialism.
Open market policies have lifted standards of living and helped millions of people around the world escape the grip of poverty. These policies have shown themselves time and time again to be the surest path to creating jobs, increasing commerce and fostering progress. And this moment of global economic uncertainty would be precisely the wrong time to reject such proven methods for creating prosperity and hope.
Mostly, he urged patience. With world leaders meeting in Washington for an economic summit hosted by Bush on Nov. 15, the president said the government's muscular steps to buttress the market "are beginning to show results, but it will take time for their full impact to be felt."
The president-elect -- whoever he is -- will also be invited to attend the summit, scheduled less than two weeks after the election. Bill Burton, spokesman for Democrat Barack Obama, ahead in national polls, said Bush's words and actions make the case for his candidate. In a statement, Burton said:
After casting his ballot for John McCain, George Bush took to the airwaves and eloquently endorsed his economic plan that represents four more years of policies that give billions in tax breaks to CEOs and big corporations but does nothing to create jobs or provide relief to more than 100 million middle class Americans.

Global meltdown causes rush for gold

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The host of problems in the global economy, like the subprime meltdown, the financial crisis downturn in the equity markets, along with commodity prices still remaining at high levels, are all forcing investors to rediscover the lustre in gold.
According to a recent report by team of analysts headed by Kevin Norrish from Barclays Capital, investing in gold will be seen as a way out of the global economic turmoil. A study made by Merrill Lynch & Co Inc under the team leader Francisco Blanch shows gold prices can shoot up to $ 1,500 an ounce in the near future. The $700-billion US bailout package for financial institutions and billions of dollars being infused into the system by governments and central banks across the world and the contemplated cut in interest rates would fuel inflation. Crude oil prices would reach $150 a barrel. However, other experts have predicted higher prices for crude oil.
"Despite prices of gold reaching all-time high levels, people do consider spreading their investments partly in gold, as it has always acted as a safe haven for panicked investors. The investment value has never eroded. Rather, gold has given better returns in the last few years. There are predictions that gold prices may soon touch Rs 15,000 per 10 gm," said the CMD of MMTC India, Sanjiv Batra. MMTC is India's largest trading company in the public sector, responsible for importing commodities like gold, silver and platinum. As fears of a likely global recession remain high and the fluctuations of forex rates continues, investors are lining up for investment in the yellow metal, which has been the place for investment through the centuries.
Global prices of gold still continue to remain high, after reaching a peak of over $863 an ounce last month. At LME, on Friday, prices eased slightly below $800 an ounce.
India, like many other countries, is currently facing the impact of a global economic crisis in terms of a meltdown in the equity market and high commodity prices. The price inflation rate measured on point-to-point movement in the wholesale price index still remains at 11.44%. Recently, the Indian rupee has begun depreciating against the dollar by more than 20%. With a view to save the economy from the impact of a global crisis, the Reserve Bank of India has taken some measures for infusing liquidity in the market, but fell short of calling for a cut...

India not immune to global meltdown: Virmani

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New Delhi: India cannot remain immune to meltdown in developed economies, a top economic advisor to the government has warned.“We cannot remain immune in the event of a major meltdown of the OECD economies, which at the moment appears to be an unlikely proposition,” Arvind Virmani, chief economic advisor (CEA) in the finance ministry, told IANS, referring specifically to the US, the UK, Spain, Switzerland, France, Germany, Italy and Australia.These nations are eight of the 30-member Organisation for Economic Co-operation and Development (OECD), which follows the principles of representative democracy and free-market economy. Some, like the US, the UK, Germany and Australia are key investors in India.For instance, the US is India's largest trade partner and foremost export destination, accounting for nearly 17 percent of India's exports.Will the global financial meltdown - as reflected by the collapse of Lehman Brothers and American International Group, which has forced the White House to pledge a $700-billion bailout package - have any long-term impact on the Indian economy?Virmani, who did his Ph.D in Economics from Harvard University under the supervision of Nobel Laureate Kenneth Arrow, answered cautiously but did not rule out the possibility of a global meltdown impacting the third largest Asian economy after China and Japan.“It depends upon how the governments of OECD countries handle the crisis. If they are able to manage it, then the answer is, 'No',” said Virmani.Prime Minister Manmohan Singh during his just concluded visit to France had told French daily Le Figaro that India was not immune to global financial upheavals."We live in an interdependent world and the fate of all countries is related to the international financial system. Our value markets are open to the world and if they are affected, this will affect our capacity to finance our development," Singh had told the paper.As Singh's apprehension left Indian securities markets reeling, Finance Minister P. Chidambaram infused hope among investors, saying Oct 1 that Indian domestic market was “safe, sound and attractive, and there was nothing to worry".To boost the flow of liquidity in the market, India's central bank - the Reserve Bank of India (RBI) - Monday cut cash reserve ratio (CRR) or the minimum deposit a bank has to keep with the central bank by 50 basis points to 8.5 percent, which will see Rs.20,000 crore or Rs.200 billion getting pumped into the system.Amidst financial chaos, however, remains a silver lining as “India's medium term growth potential remains 9 percent,” Virmani said.“Yes, India's medium term growth potential remains 9 percent despite the crisis in global financial market. However, we have to pay greater attention to policy and institutional reforms in the next six to nine months,” he said.In 2005-6 and 2006-7, the Indian economy grew 9.6 percent and 9.4 percent, respectively, which was clearly above the trend. But it logged a 7.9 percent growth in April-June of the current fiscal, as against 9.2 percent in the corresponding period last year.The Prime Minister's Economic Advisory Council has projected the economy to grow at 7.7 percent in the current fiscal. Between 2003-4 to 2007-8, the average growth rate of the economy has been 8.9 percent.

Source: Indo-Asian News Service

MSN SpecialUS meltdown

Image galleryFinancial turmoil in the US

Global meltdown: How the cookie will crumble in India

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The inevitable has finally happened. The housing bubble in the US has burst. And the sub-prime crisis that resulted from the real estate bust in the US destroyed investor wealth worth trillions of dollars across the world.
The bust has claimed high profile investment banks like Bear Sterns (taken over by J P Morgan with dollops of help from the US Federal reserve, the US equivalent of Reserve Bank of India [Get Quote]), Lehman Brothers (filed for bankruptcy on September 15 leading to the global turmoil since then) and, one of the most venerable insurers in the world, the American International Group (taken over by the US government for about $85 billion).
Today, the US government led by Treasury Secretary (US equivalent of India's finance minister) Henry Paulson (himself an ex-Goldman Sachs CEO, another investment bank facing the music) is planning to make provisions for an $800 bailout package that would buy all the bad loans and related products sold by US commercial and investment banks. This arrangement, it is believed, will help the current credit crisis blow over without damaging the confidence of banks, financial institutions and ordinary people like you and me in the US.
And since most of the US companies do business in India and with companies in India and the world over, the bailout will help restore the global confidence in financial systems like commercial and investment banks.
However, for the next two years the whole world, including India, is expected to reel under the effect of the current financial crisis considered as the worst since the Great Depression of 1929.
This is how it will affect us in India.
1. Slowdown in jobs
Companies like Lehman Brothers, Merrill Lynch, AIG and Morgan Stanley, to name a few, have their captive research units, brokerage arms, investment banking arms in India employing several hundred thousand people in what is popularly known as BPOs (Business Process Outsourcing) and KPOs (Knowledge Process Outsourcing).
Lehman Brothers' Powai unit itself employed about 2,200 people most of whom will be rendered unemployed unless some other company buys out Lehman's India operations and keeps the wheels running.
Now that the above-mentioned companies are finding it difficult to run their businesses in the US they have either sold out to other companies (Bank of America taking over Merrill Lynch) or to the US government (AIG buyout by the US government).
Obviously, to maintain profits or to just cut even in the current scenario they will start downsizing their workforce wherever they can.
Also, most of these American banking companies have outsourced their technology-related jobs to Indian companies like Satyam [Get Quote] Computers, TCS [Get Quote], Infosys [Get Quote] etc which might be affected in the near future. The Indian companies, however, maintain that it is an opportunity for them to expand as, in a bid to reduce costs, many US banks will outsource more work to India.
Sectors like real estate, aviation, information technology have already started downsizing their employee strength. There are newspaper reports about DLF (because of the cash crunch) and Kingfisher (rise in aviation oil price and lesser number of flyers taking to the skies) reducing their staff strength by 300.
Technology companies like TCS and IBM had removed more than 500 people each citing poor performance long before the Lehman Brother winds swept across India.
2. Increase in loan rates
First it was the inflation rate that spoiled the party for Indian borrowers of home loans, personal loans and credit card purchases. Now taking a cue from the US banks -- which today are so wary that they are not even lending to each other for the fear that they may not get their money back -- Indian banks too have decided to thoroughly scrutinise the repayment capacity of Indian borrowers lest they too go the Lehman Brothers way.
As their cost of money goes up banks will pass on this increase to their customers, ie, borrowers like you and me, at a higher rate of interest. If banks feel that borrowers may not return their money they are going to price it higher to cover the risk of a few defaulting on their payments.
The confidence that borrowers will repay the banks' money with interest every month -- at least in the US -- is shattered and Indian borrowers will have to bear the brunt of this lack of confidence in the days to come.
Bottomline: Gear up to pay more interest on your loans.
3. Correction in real estate prices
There is some good news, though. If experts are to be believed real estate prices in Indian towns and cities are likely to come down by 10-15 per cent in the next few months.
The reason given is most US companies that had bought stakes in Indian real estate companies are facing a cash crunch. Others who had promised to invest in Indian real estate will not do so for the simple reason that the US is no more the place where you can get dollars easily and at a cheaper rate.
Most real estate developers who depend on this flow of money may find it difficult to complete their projects. Also, buyers too have dried up because of unaffordably high real estate and interest rates.
The outcome could be real estate developers lowering rates to lure buyers.
4. Increase in gold prices
Because of the financial problems in the US global investors are losing their faith in the supremacy of the US dollar as a store of value. As a result they are selling dollars to buy some other currency, say the euro or the Japanese yen.
Whenever such an event happens investors flock to that ultimate store of value called gold or the noble metal. As the festival season starts with Navratri in India more and more people will demand gold thereby increasing its price further.
However, an increase beyond a particular point is likely to tell on the demand for gold. Just like it is happening with the real estate scene in India.
5. More inflation
Increase in oil prices -- it jumped a whopping $30 a barrel in intra-day trade today before settling at $108-109 to a barrel -- and weakening of the Indian rupee against the dollar will act as a double whammy for Indians.
Crude prices have a multiplier effect. As most goods transported in India use some or the other form of energy it increases the cost of transportation and hence an increase in the price of vegetables, pulses etc.
As the Indian rupee weakens against the dollar -- more foreign companies are selling rupees to buy US dollars to take them back to their country -- it increases our import bills. For every dollar for which we paid Rs 39 only a few months back, we will have to pay a good Rs 45.
In this scenario it is small consolation that oil prices have come down from their $140 plus to a barrel at near about $100 to a barrel.
Also, if inflation rises further, expect the Reserve Bank of India to further increase your borrowing costs.
6. Speed breaker ahead
Future Group Chairman Kishore Biyani had, way back in 2007, said that 2009 will be a crucial year for the world economy as a whole and particularly India. How very prophetic his words sound today.
With the US economy firmly in the grip of a slowdown owing to the housing price collapse and the subsequent sub-prime drama, this slowdown is fast snowballing across global boundaries and more so India as we depend a lot on the US for the money they bring in.
As the US funds tap is expected to run dry in the next 6-12 months Indian companies will be starved of the much-needed cash to expand their businesses. An impact is already visible in the real estate sector as developers scour the world in search of cheap money.
If this slowdown impacts the investment climate in India then we can no more dream of the 7.5-8 per cent growth rate that was once upon a time considered a given. A slowdown will force more companies to enter the cost-cutting arena leading to a sizeable dip in job creation.
7. Rollercoaster ride
Be prepared to ride the ups and downs of the global financial markets as India is no more an isolated island. India is likely to follow whatever happens in the US, European or Asian stock markets.
A case in point is how the Sensex closely traced the ups and downs of the Dow Jones and Nasdaq in the previous week.
The same is true of the prices of oil, gold, aluminium, copper steel and any other commodity. Gone are the days when markets defied Newton and gravity. Nobody can expect the markets to move only in one direction.
If you are a trader in such a market, then not even God can save you.

gsk

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