Relative Strength Index (RSI)
|Bid||196.08 x 800|
|Ask||196.15 x 1000|
|Day's Range||195.25 - 200.92|
|52 Week Range||130.85 - 250.46|
|Beta (5Y Monthly)||1.45|
|PE Ratio (TTM)||10.58|
|Earnings Date||Jul 15, 2020|
|Forward Dividend & Yield||5.00 (2.48%)|
|Ex-Dividend Date||May 29, 2020|
|1y Target Est||212.83|
Remember when Goldman Sachs ❤️d bitcoin? Back in the heady days of 2017 and 2018, the investment bank was so excited about this potential new asset class that it was said to be considering launching a bitcoin trading desk, a huge step in the direction of “mainstream adoption”. In early 2018 (peak mania), Goldman was said to have “caved” on bitcoin, putting out a nine-page report entitled “Bitcoin as Money”.
(Bloomberg) -- The head of SoftBank Group Corp.’s Vision Fund received a substantial increase in compensation even as the investment business delivered a $17.7 billion loss.Rajeev Misra earned 1.61 billion yen ($15 million) in the year ended March 31, more than double his pay a year earlier, SoftBank said in a statement on Friday. The Vision Fund lost 1.9 trillion yen in the period, triggering the worst loss ever in the Japanese company’s 39-year history.SoftBank had to write down the valuations of companies like WeWork and Uber Technologies Inc. because of business missteps and the coronavirus fallout. Its return on the fund was negative 6%, compared with 62% just a year ago. Still, Misra was SoftBank’s second-highest-paid executive last year after Chief Operating Officer Marcelo Claure, even though Misra received no bonus and most of his compensation was in base pay. Founder Masayoshi Son took a 9% compensation cut, earning 209 million yen.“What kind of message is Son sending by giving Misra a raise despite the disastrous results he delivered?” said Atul Goyal, senior analyst at Jefferies Group. “The optics is just not good.”The pay hike for Misra comes at a time when the Vision Fund is planning deep cuts in staffing. The reductions across all levels of staff could affect about 10% of the fund’s workforce of roughly 500, according to people familiar with the matter. The Vision Fund, which has stopped making new investments after spending 85% of its capital, lists 30 people as investors on its website, including all of its managing partners, partners and directors.The fund has struggled since WeWork botched its efforts to go public last year and SoftBank stepped in to bail the company out. The Vision Fund currently manages more than 80 portfolio companies, but Son expects about 15 of the fund’s startups will likely go bankrupt while predicting another 15 will thrive.Separately, SoftBank is moving two managing partners at the Vision Fund into new roles. Akshay Naheta will become senior vice president, assisting Son in investments and providing strategic advice. Kentaro Matsui will transition to a senior advisory role at SoftBank Group.Claure, who helped close Sprint Corp.’s merger with T-Mobile US Inc. and is leading the effort to turn around WeWork, made 2.11 billion yen, a 17% raise. He also oversees a Latin American investment fund for SoftBank.SoftBank declined to comment on the reasons for changes in pay.Chief Strategy Officer Katsunori Sago earned 1.11 billion yen, a 13% increase for the former Goldman Sachs Group Inc. executive. Ken Miyauchi, head of SoftBank’s domestic telecom operation, made 699 million yen, a 43% drop. Simon Segars, head of its ARM Holdings Plc chip unit, did not make the list because his pay dropped below 100 million yen. Segars earned 1.1 billion yen the previous year.Ronald Fisher, Son’s long-time lieutenant and SoftBank Group vice chairman, saw his pay plunge 79% to 680 million yen. Fisher’s remuneration from the Vision Fund, where he runs the U.S. operations, totaled 1.27 billion yen, including a 767 million yen bonus. But he lost 701 million yen in compensation not related to the fund. SoftBank said the drop reflects a decline in stock price, but didn’t provide further details.SoftBank’s disastrous bet on WeWork has been viewed internally as Fisher’s project. Before SoftBank first invested in the company in 2017, Fisher met with executives at IWG Plc, a European competitor with a much lower valuation and many more sites, according to people familiar with the matter. Fisher interpreted the unfavorable metrics as a sign of growth potential. A month later, the Vision Fund led a $4.4 billion investment round into WeWork at a $20 billion valuation.Last year, after WeWork’s effort to go public fell apart, SoftBank stepped in to organize a bailout and put Claure in charge of turning around the business. But the pandemic has hammered its operations as workers shy away from gathering in shared office spaces. Earlier this month, SoftBank wrote down the value of its stake to $2.9 billion, more than 90% lower than its peak.(Updates with analyst comment in fourth paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Wall Street giants such as Goldman Sachs Group Inc. and JPMorgan Chase & Co. have tens of billions of dollars at stake in China as political tension risks derailing the nation’s opening of its $45 trillion financial market.Five big U.S. banks had a combined $70.8 billion of exposure to China in 2019, with JPMorgan alone plowing $19.2 billion into lending, trading and investing. That’s a 10% increase from 2018.While their assets in the country are comparatively small, they have big expansion plans there that may come undone if financial services firms are dragged into the tit-for-tat between the two countries. Not only would that cloud their growth plans, it would also threaten the income they have generated over the years from advising Chinese companies such as Alibaba Group Holding Ltd.Profits in China’s brokerage industry could hit $47 billion by 2026, Goldman estimates, with foreign firms gunning for a considerable chunk. There are $8 billion in estimated commercial banking profits as well as a projected $30 trillion in overall assets to go after, also being pursued by fund giants such as Blackrock Inc. and Vanguard Group Inc.“If you’re an American financial institution and you have an approved plan to expand into China, you’re going to continue that plan to the extent that the U.S. government allows you to because you see great future profits,” said James Stent, a former banker who’s spent more than a decade on the boards of two Chinese lenders. “A U.S.-China cold war is not good for your plans to build business in China.”After years of trade war turmoil, U.S. policy makers are now starting to take aim at the financial industry amid growing skepticism over American firms plowing money into a country perceived as a big geopolitical foe. Policy makers and lawmakers are looking at restricting U.S. pension fund investments in Chinese companies and limiting the ability of Chinese companies to raise capital in the U.S.A body advising the U.S. Congress this week questioned Wall Street’s push, saying lawmakers need to “evaluate the desirability of greater U.S. participation in a financial market that remains warped by the political priorities of a strategic competitor.” Add to that potential sanctions against China and even its banks over the crackdown on Hong Kong, and the situation could further escalate.President Donald Trump said he’s “not happy with China” after the country passed a new security law on Hong Kong and will announce new U.S. policies on Friday. His top economic adviser said Beijing would be held accountable by the U.S.Here’s a run down on the biggest U.S. banks’ presence in China right now and their plans.GoldmanGoldman, which has spent years lobbying for control of its onshore business, won approval this year. Chief Executive Officer David Solomon has pledged to infuse its mainland business with hundreds of millions of dollars in new capital as the bank plans to embark on a hiring spree to double its workforce to 600 and ramp up a wide variety of businesses.Goldman put its “cross-border outstandings” to China at $13.2 billion at the end of last year. But its two onshore operations had capital of just 1.8 billion yuan ($251 million), making a profit of almost 300 million yuan.A spokesman for Goldman declined to comment.Morgan StanleyHosting an annual summit in Beijing with 1,900 investors and 600 companies last year, Morgan Stanley Chief Executive Officer James Gorman said in a Bloomberg Television interview that the bank is in China “for the long run.” He highlighted its presence there for 25 years and its handling of hundreds of billions of dollars in equity and merger deals for Chinese businesses.Morgan Stanley won a nod to take majority control of its securities venture this year, and last year had a net exposure of $4.1 billion to Chinese clients. Its local securities unit, however, has revenue of just 132 million yuan, posting a loss of 109 million yuan last year.The bank has been overhauling senior management of the venture, installing its staff in key roles. It plans to apply for additional licenses to broaden its products and invest in new businesses, build market-making capability and expand its asset management partnership and ultimately take control.“It’s a natural evolution to bring the global investment banks into this market,” Gorman said in May last year.A Morgan Stanley spokesman declined to comment.JPMorganThe biggest U.S. bank has been doing business in China since 1921. Chief Executive Officer Jamie Dimon has said that his firm is committed to bringing its “full force” to the country. This year it applied for full control of an asset management firm as well as a securities venture, and is expanding its office space in China’s tallest skyscraper in downtown Shanghai.JPMorgan’s China total exposure in 2019 was $19.2 billion, including $11.3 billion in lending and deposits and $6.5 billion in trading and investing.JPMorgan China’s banking unit had 47 billion yuan in assets last year and made a profit of 276 million yuan, while its newly started securities firm had capital of 800 million yuan.A JPMorgan spokeswoman declined to comment.CitigroupCitigroup Inc., which has been doing business in China since 1902, had total exposure to the country of $18.7 billion at the end of last year. Its local banking arm had total assets of 178 billion yuan, making a profit of 2.1 billion yuan.Citigroup, which is setting up a new securities venture in China, is the only U.S. lender that has a consumer banking business in the country with footprint in 12 cities including Beijing, Changsha and Chengdu.New York-based Citigroup said last month that it has doubled its overall revenue from China to more than $1 billion over the past decade.China represents 1.1% of Citi’s total global exposure and includes local top tier corporate loans and loans to US and other global companies with operations in China, a bank spokesman said.Bank of AmericaBank of America Corp., the only major bank to decide against pursuing a securities joint venture, is continuing to expand into the world’s second-largest economy. The Charlotte, North Carolina-based lender is looking to provide a fuller range of fixed income services in the country.Its largest emerging market country exposure in 2019 was China, with net of $15.6 billion, concentrated in loans to large state-owned companies, subsidiaries of multinational corporations and commercial banks. It followed only the U.S., U.K., Germany, Canada and France in terms of exposure for the bank.A spokeswoman for the bank declined to comment.(Adds Trump comments in eighth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
A U.S. judge on Thursday said institutional investors, including BlackRock Inc <BLK.N> and Allianz SE's <ALVG.DE> Pacific Investment Management Co, can pursue much of their lawsuit accusing 15 major banks of rigging prices in the $6.6 trillion-a-day foreign exchange market. U.S. District Judge Lorna Schofield in Manhattan said the nearly 1,300 plaintiffs, including many mutual funds and exchange-traded funds, plausibly alleged that the banks conspired to rig currency benchmarks from 2003 to 2013 and profit at their expense. "This is an injury of the type the antitrust laws were intended to prevent," Schofield wrote in a 40-page decision.
DOW UPDATE Shares of Walt Disney and Goldman Sachs are trading lower Thursday afternoon, dragging the Dow Jones Industrial Average into negative territory. Shares of Walt Disney (DIS) and Goldman Sachs (GS) are contributing to the index's intraday decline, as the Dow (DJIA) was most recently trading 103 points (0.
The annual stress tests will be different this year, as the Fed incorporates fallout from the coronavirus crisis in its analysis.
Goldman Sachs Group Inc. on Wednesday (NYSE: GS) published a presentation titled "U.S. Economic Outlook & Implications of Current Policies for Inflation, Gold and Bitcoin" ahead of an investor call.Goldman Says BTC Not An 'Asset Class'The investment bank's views on Bitcoin (BTC) particularly grabbed attention, as it once again instigated the tussle between established financial giants and the cryptocurrency community, CoinDesk reported."We believe that a security whose appreciation is primarily dependent on whether someone else is willing to pay a higher price for it is not a suitable investment for our clients," Goldman said in the investor presentation.The bank said hedge funds may find the digital assets appealing because of "their high volatility," but "that allure does not constitute a viable investment rationale." Goldman further went on to say that cryptocurrencies, including Bitcoin, are "not an asset class."Cryptocurrencies don't generate "cash flows like bonds," or any "earnings through exposure to global economic growth," according to the bank. The virtual assets aren't even useful for diversification of assets, or as security against volatility, it noted.Goldman Based Reports On 'Mainstream Headlines,' Crypto Experts Argue Experts in the cryptocurrency field argued that Goldman's report showed a lack of analysis and repeated mainstream bias against the nascent financial industry."The criticisms were very cookie cutter, the type you'd expect if someone just read mainstream headlines," Messari analyst Ryan Watkins told CoinDesk."It's like they didn't fully diligence the asset." Tom Masojada, co-founder at OVEX Digital Asset Exchange, noted that other asset classes recommended by Goldman for its investors, including art and gold, also depended on someone willing to pay a higher price for the asset at a later date.The Winklevoss twins, major Bitcoin proponents, also criticized Goldman's views on the apex cryptocurrency on Twitter.> Goldman Sachs: In 2019, $2.8 billion in Bitcoin was sent to currency exchanges from criminal entities.> > Fun Fact: Goldman Sachs facilitated $6 billion in money laundering via 1MDB scandal between 2012-13.> > Double standard much?> > -- Tyler Winklevoss (@tylerwinklevoss) May 27, 2020> Bitcoin does "not generate cash flow like bonds." Because it's not a bond. And the sky is blue.> > -- Cameron Winklevoss (@winklevoss) May 27, 2020Goldman isn't the only major financial institution that has remained critical of cryptocurrencies. Others, including JPMorgan Chase & Co. (NYSE: JPM) Chief Executive Officer Jamie Dimon and Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B) CEO Warren Buffett, have also expressed their disapproval.Price Action Goldman Sachs shares closed nearly 7% higher at $209.66 on Wednesday. Bitcoin traded 3.3% higher at $9,160.58 at press time on Thursday.See more from Benzinga * Macy's Announces Pricing Of Its .3B Debt Offering As Shares Jump 26% * Goldman Sachs Plans To Expand Cash Management To Europe Despite Coronavirus Impact * Carvana Rival Online Car Seller Vroom Files To Go Public(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
(Bloomberg Opinion) -- The deterioration of U.S.-China relations is fast and furious, with Washington throwing out accusations of unfair trade practices, unlawful technology transfer and an early cover-up of the coronavirus outbreak, which has claimed over 100,000 American lives. The Chinese yuan, this year’s beacon of stability, is now is now at risk of tumbling like other emerging markets currencies.On Wednesday, the offshore yuan, which trades freely, flirted with its weakest level on record, dropping as much as 0.7% to 7.1965. While Thursday morning’s yuan fix came in stronger than expected, the overall sentiment is downbeat.It’s tempting to theorize that a weaker yuan could become a powerful weapon in the new Cold War, yet there’s little evidence of foul play from the People’s Bank of China. Since mid-2017, the central bank has based its fixing on the previous day’s close, dollar movement overnight against a currency basket, and what it calls the “countercyclical factor," a catch-all metric that grants wiggle room to deviate from market fundamentals. The yuan can move in a 2% trading range around the PBOC’s daily target.Take a look at Goldman Sachs Group Inc.'s estimate of the countercyclical factor. Over the last year, the PBOC has been consistently guiding its yuan stronger, not weaker, to artificially track the dollar. For all the theatrics of getting labeled a currency manipulator, Beijing wasn’t making its exports any cheaper.What’s new this year is the PBOC’s Zen-like attitude. Rather than playing the heroic fireman, handling one crisis after another, the central bank has been largely hands-off. It has used the countercyclical factor in a meaningful way only twice since January, on Feb. 4 when China emerged from the Lunar New Year holiday to face a national lockdown, and at the end of March when the outbreak was shaking up global markets.And why should the PBOC adhere to the dollar anyway? The coronavirus downturn has only showcased America’s exceptionalism — it prints the world’s reserve currency. Haven demand for the dollar has surged, evidenced by soaring currency swap rates from the euro zone to South Korea, and the Federal Reserve’s scramble to re-establish swap lines with other central banks. Looking back to 2008, the greenback only started to weaken two months after demand for “emergency dollars” peaked, data provided by Deutsche Bank AG show.So it makes sense for China to adopt a more enlightened approach, allowing the yuan to weaken during periods of dollar strength, and catch up when global tensions recede. From the PBOC’s view, the trade-weighted yuan is certainly stronger now than it was last fall, when the central bank was in fire-fighting mode. China doesn’t want to spend another $1 trillion of its foreign reserves defending its currency. The rapid drawdown in 2015 and 2016 traumatized the Chinese for good.To be sure, the pressure of capital outflows is still there. Just look at the consistent negative value of the “net error and omissions” figures in China’s balance of payment data. However, here’s the beauty of the virus: The Chinese can’t go anywhere. They can’t come to Hong Kong to buy insurance products, and unless you’re ultra-rich (with private bankers around the world apartment-hunting for you), Manhattan real estate is off-limits. The PBOC has less to worry about than before.So now the market can test the true value of the yuan. It could easily drop below 7.30 if the phase one trade deal breaks down and the Trump administration imposes some of the tariffs it had previously threatened, estimates HSBC Holdings Plc.Long-time China bear Kyle Bass abandoned his yuan short in early 2019 for the greenback-pegged Hong Kong dollar. He didn’t profit from his yuan trade because the PBOC established powerful tools, such as selling yuan-denominated bills in the offshore market, to kill anyone betting against the currency. Now that their interests are becoming aligned, it’s time for the bears to wake up.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- The Chinese consumer has been one of the most important drivers of the world economy over the past decade, fueling hopes of prolonged growth and profits. So it’s worth looking at what’s happening to household balance sheets as Covid-19 wreaks havoc on a population now feeling the downside of growing personal leverage from the boom. In the last major financial crisis, big-spending Americans were hit hard, but the Chinese found new ways to open their wallets and took the rest of the global economy along for the ride. China accounted for 31% of growth in household consumption between 2010 and 2017, World Bank data show, bringing its share now to about 10%. That includes around 30% of spending on cars, luxury retail and mobile phones, and hundreds of billions of dollars on travel and tourism.Chinese consumers are the “single most important thing in the world economy,” Jim O’Neill, a former Goldman Sachs Group Inc. chief economist, told the Financial Times last year. They could be key to the next 40 years of growth, and it’s unlikely that any other country could replace them.Will they be able to spend away the global economy’s gloom this time? They’ll have their own worries to deal with first.In the quarter to March, disposable household income shrank sharply for the first time since at least 2013, putting strain on balance sheets in which new forms of credit and financial assets take up a bigger part. Consumer credit – from cards to peer-to-peer loans and other lending – has proliferated in recent years. A central bank survey showed that around 60% of household assets are parked in real estate; some 97% of liabilities are tied up in bank loans, with mortgages almost 70% of the total. As borrowings and incomes diverge, stresses on individuals and families rise. All told, households owe 63 trillion yuan ($8 trillion), or 65% of gross domestic product, according to CLSA Ltd. analysts. Leverage is more than 130% of last year’s earnings. Adjusted on a GDP per capita basis, that puts China among the highest in relation to major countries. The debt service ratio is climbing much faster compared to the U.S., Australia and Japan.Spending patterns are changing due to lockdowns, less money and changes in consumer psychology brought by the coronavirus. Online shopping has increased, of course. The gross merchandise value of essentials and goods like home hygiene products has surged. A UBS Evidence Lab survey in April showed that while people were returning to work, 54% of respondents said their incomes had declined, and 60% had reduced offline spending. Fewer than half expected a pay raise soon and just over a quarter planned to reduce their debts. Property purchases were being put on hold.That austerity is probably a good thing. Early signs already point to trouble. Credit card delinquencies are rising. Consumption loan asset-backed securities are even weaker, with overdue payments rising sharply from 6% in January to over 9% in March. That indicates a deteriorating quality of household balance sheets between prime and weaker borrowers. Non-performing consumer credit is expected to double this year.Middle-class borrowers have been China’s big spenders, but much of the incremental growth was going to come from aspiring buyers trying to enter higher socio-economic strata. Now, they won’t quite make it. If they’re hurting, who will spend? Goldman analysts point out that in China, not only is the marginal propensity to consume for lower-income urban households greater than for higher earners. It also varies widely with migrant workers spending less than those in cities, even at similar levels of income.Since China modernized its economy in recent decades, the new generations of consumers have arguably never faced a lesson in crisis management. The shock for them may be greater in some ways than what American households endured circa 2008. So far, delinquencies in the U.S. have held steady. According to the Federal Reserve Bank of New York, first-quarter national non-housing debt was flat, and fell for credit cards. While there is no doubt that U.S. consumer spending will suffer as income insecurity and joblessness rise, a social safety net is in place. China’s remains underdeveloped and an unemployment problem is brewing.How Chinese deal with these pressures will matter. Sure, it’s comforting that a large portion of wealth is stashed in hard real estate assets. But a change in property values or prices doesn’t really impact consumption of durable goods. What happens when cash flows shrink? The retail spending that the economy needs to revive won’t materialize for countless businesses, incomes will continue to decline, and the vicious circle continues. Beijing’s stimulus for individuals needs to be more robust.Whatever a new normal looks like, the individual Chinese spender may no longer be as reliable a part of it. Those looking for a consumption boost may want to turn elsewhere.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia. She previously worked for the Wall Street Journal. For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
For now, if you want financial advice from Goldman Sachs (NYSE: GS), you'll have to obtain it from a human associate of the company. In remarks made during a presentation at a financial services industry conference, the company's president and COO John Waldron said it wouldn't launch its planned robo-advisory service this year. "We have decided to slow our advisor hiring activity for this year and we will defer the launch of our digital wealth offering into 2021."
(Bloomberg) -- Not many Goldman Sachs partners seek out citizenship in a tiny Caribbean island to speed through airports. Ali Meli wasn’t your typical Goldman partner.Couch-surfing inside the investment bank, an almost $10 million paycheck as a junior trader and clashing with peers are all parts of the legend of Meli, described by colleagues as an unlikely figure in Wall Street’s most elite club: Abrasive but brilliant, subversive but successful, and above all one of its most “eccentric” figures.Now, after exiting the investment bank last year, Meli is setting up his own venture in some of the most treacherous markets in generations. The 38-year-old plans to recreate a model of doing business that he learned in an especially profitable part of Goldman’s trading division, putting together complex financing deals.“Everything about Ali was unusual but he was one of the most incredible people we’ve ever hired,” said Ram Sundaram, who brought Meli into his team, which went on to become the Principal Funding & Investments group. “He could think through all aspects of a deal to a degree that was abnormal. He was in a league of his own.”Meli is now seeking the backing of many of his former mentors as he looks to raise money for a structured credit fund, ramping up at a time of severe economic disruption.As companies seek out capital amid market distress, Meli hopes he finds himself in the center of transactions, borrowing a playbook from his Goldman days.Passport ShoppingBorn in the shadow of the Iran revolution, Meli’s earliest memories of Tehran, where he spent 20 years, was the conflict with Iraq, as his family shuttled between houses to shield themselves.“To some extent it was awesome -- the night lights up,” Meli said of the artillery and warplanes that thundered over the city. “When you’re a kid and you see these things, you don’t feel fear. It feels like a movie and it’s so cool. You don’t have the right context.”Meli’s ticket to escape the mandatory deployment in Iran’s army was a world physics competition. He later left the country altogether on a scholarship to the Massachusetts Institute of Technology.After a delay in his security clearance, Meli landed in Boston on Sept. 10, 2001. Terrorists attacked the U.S. early the next morning, prompting unprecedented scrutiny of recent arrivals from the Middle East. Meli soon had to submit to a government registry tracking his movements. But it didn’t end there.Every time he flew, the Iranian emigre was singled out for more rigorous checks. Even years later, while jet-setting with Goldman bankers to set up billion-dollar trades, the airport ordeals continued. So he solved it in a way only the wealthy would -- he went passport shopping.Meli settled on St. Kitts and Nevis, a haven for the rich where a property investment can buy citizenship outright. When Goldman published its full list of partners last year, he was the sole member of the group professing ties to the island nation.Ali Meli’s name is itself a bureaucratic mishap. Someone in the Social Security office misspelled the fairly common Iranian name “Melli.” He chose to live on with the new identity, not wanting to get into any paperwork battle that could jeopardize his status in the U.S.Harvey’s OfficeFor Meli, the worry of being sent back to Iran was paramount. His response was insane work hours.During his early days at Goldman, after other traders went home, Meli would sneak into one of the plush partner offices to sleep. He often found refuge on the office couch belonging to Harvey Schwartz, then a senior deputy to trading co-head Gary Cohn. Both men nearly went on to become the bank’s CEO.Meli’s justification: “Harvey had an open-door policy.”“I was worried about losing my job because it would have meant deportation to Iran,” Meli said. “I didn’t want to risk that. But I wasn’t stupid -- I never slept on Gary’s couch.” Cohn, known for his hard-charging ways, eventually joined President Donald Trump’s White House.Word of Meli’s antics started making the rounds soon after his arrival.The reception he got on the trading floor in the mid-2000s wouldn’t fly today. He was branded “Smelly Ali” -- a riff on his name, Ali S Meli -- and “Chemical Ali” -- after Saddam Hussein’s trusted adviser accused of gassing Kurds and executed in 2010. Meli said he reveled in the attention.“I had a few nicknames and I enjoyed it,” he said.There were also awkward moments. At one point he copied lyrics from a love ballad into a performance review of his manager, to express adoration. He was promptly told off.Yet Meli charted quick success, becoming a pillar of Sundaram’s group. Known as PFI, it had latitude to use Goldman’s own money to take on positions that wouldn’t be easy to quickly offload. Some of its big-ticket financings around the 2008 credit crisis generated massive gains for Goldman even as the rest of Wall Street struggled.The group came to be seen as a clique inside Goldman’s trading operation. Once a loose coalition of fewer than a dozen executives, it has been at the forefront of some of the most knotty transactions that can churn out big “P&L,” jargon for profits and losses. Its deals ranged from helping Sprint raise cash backed by airwaves, to financing Mexican toll roads. The group even structured bonds for Malaysia’s 1MDB investment fund after Goldman investment bankers clinched the troubled business. Officials in the country later looted the money.Insulated from the rest of the trading division, PFI’s stature grew as it tackled outsize risks and generated eye-popping returns.Meli just happened to be its quirkiest and most outspoken member, unafraid of challenging colleagues’ views. Some senior partners came to rate others based on how they fared in confrontations with him.$10 Million PaydayJust a few years into his banking career, Meli was already eyeing big risks. He encouraged his team to pile on short positions as the housing market headed into the 2008 credit crisis.“Bottom line: housing is in free fall,” he wrote in an email in August 2006 after poring through reports. Sundaram’s crew ramped up wagers against asset-backed indexes and bond-insurance companies. Meli said he framed a printed copy of that email after the hedges paid off for Goldman.Meli also had a hand in another incident that reverberated across financial markets. He helped his team come up with the valuation for marking down positions in its swaps transaction with AIG, which forced the insurer to put up more cash as others followed suit. AIG insisted for years that Goldman’s aggressive move was what led to its failure.“It’s one of those things you wish you weren’t right,” Meli said. “But what caused the marks to go down was not because we put the marks down, but a real housing recession had started to hit.”Some of the most profitable transactions were trades Goldman designed with the likes of CIT Group and European banks. That helped Meli score his giant paycheck for 2009. But as his success mounted, so did his skirmishes. Often passionate, he wouldn’t hold back in disagreements over transactions -- incidents that sometimes left more-senior colleagues red-faced.“He was unusually bright and eccentric,” said Joe McNeila, a former colleague in the PFI group. “It was a business of natural conflict. He could be very formidable and he was a tough guy to go up against.”Meli was one of the youngest people in Goldman’s class of new partners in 2014, but looking back, he figures that his combativeness probably slowed him down.“There was a period when I would get into these arguments sometimes with people more senior than me,” he said. “I was told I needed to learn to be more humble, and it was a valuable lesson.”Days after he was named partner, he bought his first car: a second-hand Mercedes.Over the years, people familiar with the situation said, his bosses fielded grievances that ranged from the ordinary to the bizarre.For a stretch of time, Meli tried commuting daily from Toronto to New York, raising concerns among colleagues about his manic schedule. He launched a crusade to support higher pay for junior bankers, which raised hackles. He proposed transactions that, while legal, were so novel or aggressive that bosses would sometimes squirm, worried about the optics.His political views on government overreach and the impact of regulation on daily life also made some colleagues uncomfortable.He jumped on the Trump train before many on Wall Street. And since becoming a permanent resident in 2018, he’s become a prolific political operative, dispensing more than a quarter million dollars to mostly conservative and libertarian candidates.Meli gave up butting heads at Goldman and officially exited the bank last year.This year, markets are presenting a once-in-a-century opportunity for brave credit traders. Meli named his new firm Monachil Capital Partners after a Spanish village that traces its name to the word monastery -- to try and denote inner calm, he said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Wall Street giants such as Goldman Sachs and JPMorgan Chase have tens of billions of dollars at stake in China as political tension risks derailing the nation's opening of its US$45 trillion financial market.Five big US banks had a combined US$70.8 billion of exposure to China in 2019, with JPMorgan alone ploughing US$19.2 billion into lending, trading and investing. That's a 10 per cent increase from 2018.While their assets in the country are comparatively small, they have big expansion plans there that may come undone if financial services firms are dragged into the tit-for-tat between the two countries. Not only would that cloud their growth plans, it would also threaten the income they have generated over the years from advising Chinese companies such as Alibaba Group Holding.Profits in China's brokerage industry could hit US$47 billion by 2026, Goldman estimates, with foreign firms gunning for a considerable chunk. There are US$8 billion in estimated commercial banking profits as well as a projected US$30 trillion in overall assets to go after, also being pursued by fund giants such as Blackrock and Vanguard Group."If you're an American financial institution and you have an approved plan to expand into China, you're going to continue that plan to the extent that the US government allows you to because you see great future profits," said James Stent, a former banker who's spent more than a decade on the boards of two Chinese lenders. "A US-China Cold War is not good for your plans to build business in China."After years of trade war turmoil, US policymakers are now starting to take aim at the financial industry amid growing scepticism over American firms ploughing money into a country perceived as a big geopolitical foe. Policymakers and lawmakers are looking at restricting US pension fund investments in Chinese companies and limiting the ability of Chinese companies to raise capital in the US.A body advising the US Congress this week questioned Wall Street's push, saying lawmakers need to "evaluate the desirability of greater US participation in a financial market that remains warped by the political priorities of a strategic competitor." Add to that potential sanctions against China and even its banks over the crackdown on Hong Kong, and the situation could further escalate.President Donald Trump said he's "not happy with China" after the country passed a new security law on Hong Kong and will announce new US policies on Friday. His top economic adviser said Beijing would be held accountable by the US.Here's a run down on the biggest US banks' presence in China right now and their plans. * GoldmanGoldman, which has spent years lobbying for control of its onshore business, won approval this year. Chief Executive Officer David Solomon has pledged to infuse its mainland business with hundreds of millions of dollars in new capital as the bank plans to embark on a hiring spree to double its workforce to 600 and ramp up a wide variety of businesses.Goldman put its "cross-border outstandings" to China at US$13.2 billion at the end of last year. But its two onshore operations had capital of just 1.8 billion yuan (US$251 million), making a profit of almost 300 million yuan.A spokesman for Goldman declined to comment.Hosting an annual summit in Beijing with 1,900 investors and 600 companies last year, Morgan Stanley Chief Executive Officer James Gorman said in a Bloomberg Television interview that the bank is in China "for the long run." He highlighted its presence there for 25 years and its handling of hundreds of billions of dollars in equity and merger deals for Chinese businesses.Morgan Stanley won a nod to take majority control of its securities venture this year, and last year had a net exposure of US$4.1 billion to Chinese clients. Its local securities unit, however, has revenue of just 132 million yuan, posting a loss of 109 million yuan last year.The bank has been overhauling senior management of the venture, installing its staff in key roles. It plans to apply for additional licenses to broaden its products and invest in new businesses, build market-making capability and expand its asset management partnership and ultimately take control."It's a natural evolution to bring the global investment banks into this market," Gorman said in May last year.A Morgan Stanley spokesman declined to comment. * JPMorganThe biggest US bank has been doing business in China since 1921. Chief Executive Officer Jamie Dimon has said that his firm is committed to bringing its "full force" to the country. This year it applied for full control of an asset management firm as well as a securities venture, and is expanding its office space in China's tallest skyscraper in downtown Shanghai.JPMorgan's China total exposure in 2019 was US$19.2 billion, including US$11.3 billion in lending and deposits and US$6.5 billion in trading and investing.JPMorgan China's banking unit had 47 billion yuan in assets last year and made a profit of 276 million yuan, while its newly started securities firm had capital of 800 million yuan.A JPMorgan spokeswoman declined to comment.Citigroup, which has been doing business in China since 1902, had total exposure to the country of US$18.7 billion at the end of last year. Its local banking arm had total assets of 178 billion yuan, making a profit of 2.1 billion yuan.Citigroup, which is setting up a new securities venture in China, is the only US lender that has a consumer banking business in the country with footprint in 12 cities including Beijing, Changsha and Chengdu.New York-based Citigroup said last month that it has doubled its overall revenue from China to more than US$1 billion over the past decade.China represents 1.1 per cent of Citi's total global exposure and includes local top tier corporate loans and loans to US and other global companies with operations in China, a bank spokesman said.Bank of America, the only major bank to decide against pursuing a securities joint venture, is continuing to expand into the world's second-largest economy. The Charlotte, North Carolina-based lender is looking to provide a fuller range of fixed income services in the country.Its largest emerging market country exposure in 2019 was China, with net of US$15.6 billion, concentrated in loans to large state-owned companies, subsidiaries of multinational corporations and commercial banks. It followed only the US, UK, Germany, Canada and France in terms of exposure for the bank.A spokeswoman for the bank declined to comment.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.
Marqeta has raised $150 million in capital from an undisclosed institutional investor that values the highflying fintech at $4.3 billion.
Citigroup Inc looks to reopen its New York headquarters to a small number of employees as soon as July, with workers returning to London offices even earlier, Chief Executive Officer Michael Corbat told Bloomberg News in an interview https://www.bloomberg.com/news/articles/2020-05-28/citi-s-corbat-maps-out-june-july-reopening-amid-commuting-fear. Corbat said on Thursday the return will be "granular, site-by-site and within those sites, job-by-job", adding that July is a tentative target for returning about 5% of about 12,000 employees at Citigroup's main building in Manhattan's Tribeca neighborhood. Staff returning to work will begin next month at the Canary Wharf complex in London, he added.
Payment card issuing startup Marqeta has raised $150 million from a U.S. institutional investor, doubling its valuation to $4.3 billion, the company said on Thursday. The Oakland, California-based company declined to disclose the name of the investor. The deal comes a year after Marqeta raised $260 million in a round led by hedge fund Coatue Management with participation from Vitruvian Partners and others.
DOW UPDATE Led by positive gains for shares of American Express and Goldman Sachs, the Dow Jones Industrial Average is rallying Wednesday afternoon. Shares of American Express (AXP) and Goldman Sachs (GS) have contributed to the index's intraday rally, as the Dow (DJIA) is trading 350 points (1.
Goldman Sachs make a key argument on the economic recovery in its latest piece of research.
DOW UPDATE The Dow Jones Industrial Average is rallying Wednesday afternoon with shares of American Express and Goldman Sachs leading the way for the index. The Dow (DJIA) was most recently trading 281 points, or 1.
The Dow Jones Industrial Average is climbing Wednesday morning with shares of Goldman Sachs and American Express seeing positive momentum for the index. The Dow (DJIA) is trading 185 points higher (0.7%), as shares of Goldman Sachs (GS) and American Express (AXP) have contributed to the index's intraday rally. Goldman Sachs's shares are up $9.16 (4.7%) while those of American Express are up $4.31, or 4.5%, combining for a roughly 92-point boost for the Dow.
DOW UPDATE Shares of JPMorgan Chase and American Express are trading higher Wednesday morning, propelling the Dow Jones Industrial Average into positive territory. Shares of JPMorgan Chase (JPM) and American Express (AXP) are contributing to the index's intraday rally, as the Dow (DJIA) is trading 112 points higher (0.
The world's second-largest printing ink maker, Flint Group, is nearing a debt deal seen as a pre-condition to proceed with a sales process that its owners launched last year, people close to the matter said. Flint Group has seen its supply chains affected and sales decrease during the coronavirus pandemic and expects its 2020 earnings before interest, tax, depreciation and amortization to fall from the 266 million in 2019, the sources said. The company, owned by Goldman Sachs' private equity arm and U.S.-based conglomerate Koch Industries, has engaged with its lenders to put its financing on a new footing, the people said.
Goldman Sachs has pushed back this year’s planned launch of a digital wealth management platform and is slowing its hiring of advisers, president John Waldron said on Wednesday, citing the need to act “prudently” in the current economic environment. The platform — the latest step in Goldman’s move into mass market wealth management — would now go live in 2021, Mr Waldron said. The launch was designed to build on Goldman’s $750m acquisition of wealth adviser United Capital last year, offering online services to those with as little as $5,000 to invest, United boss Joe Duran told the Financial Times in December.