Goldman Sachs - U.S. Economy Could Withstand One Shock, But Four at Once?

Goldman Sachs Group, Inc. is a global financial institution that provides investment banking, securities, and investment management services to a varied client base, including corporations, financial institutions, governments, and high net worth individuals. The bank was founded in 1869 and is headquartered in New York City.

With over 40,000 employees globally, Goldman Sachs is one of the most important financial institutions in the world, ranking among the top 10 global investment banks by revenue. The company operates across four key segments: Investment Banking, Global Markets, Asset Management, and Consumer & Wealth Management.

Investment Banking

Goldman Sachs’ Investment Banking division is responsible for providing advice to corporations, governments, and other institutions on mergers and acquisitions (M&A), underwriting equity and debt offerings, and helping clients raise capital through private placements. The company also offers financing options and risk management strategies to its clients via its investment banking services.

The Investment Banking division is the largest revenue generator for Goldman Sachs, representing approximately half of the bank’s total revenues. The bank has consistently ranked as one of the leading global investment banks in the world, advising on some of the largest M&A deals and underwriting the most significant equity and debt offerings.

Global Markets

The Global Markets division provides clients with market-making, sales, and trading services across a variety of products, including equities, fixed-income securities, currencies, and commodities. The division also offers a range of electronic trading platforms and execution services.

The Global Markets division is a significant contributor to the bank’s revenue, representing around 25% of total revenues. Goldman Sachs’ market-making operations are a vital part of the financial markets, providing liquidity to the markets and aiding in price discovery.

Asset Management

Through its Asset Management division, Goldman Sachs provides institutional and individual clients with investment management services, including traditional and alternative investments, focused on private equity and real estate. The division also offers fiduciary and consulting services to pension funds, endowments, and other institutional investors.

The Asset Management division has grown significantly over the past decade, and Goldman Sachs is now one of the leading asset managers in the world, with approximately $2.1 trillion in assets under management as of 2021.

Consumer & Wealth Management

The newest division of Goldman Sachs is Consumer & Wealth Management, which was launched in 2020. The division offers clients a range of financial services, including high-yield savings accounts and personal loans, along with wealth management and financial planning services.

The Consumer & Wealth Management division aims to serve a broader audience, from high net worth individuals to consumers who previously did not have access to Goldman Sachs’ services. The division has quickly gained traction and is expected to become an essential source of revenue for the bank in the coming years.


Like many other financial institutions, Goldman Sachs has faced numerous controversies over the years, some of which have resulted in significant financial penalties.

One of the most notable controversies was the bank’s role in the 2008 financial crisis. Goldman Sachs faced criticism for selling complex mortgage securities to clients while simultaneously betting against those securities, resulting in large profits for the bank but significant losses for many of its clients. The bank ultimately paid fines and settlements of over $10 billion related to its role in the crisis.

More recently, Goldman Sachs faced criticism for its involvement in the 1MDB scandal, where the bank helped raise funds for a Malaysian government investment fund that was used for illicit purposes. The bank agreed to pay over $2 billion in fines related to the scandal, and several former employees were indicted for their role in the scheme.


Goldman Sachs is one of the world’s most significant and influential financial institutions, with a broad range of services aimed at serving a diverse client base. The bank has a long history of providing high-quality investment banking services, and its market-making operations are an integral part of the financial markets.

Despite its controversies, Goldman Sachs remains an important player in the financial world, and it’s expected to continue to grow and expand its business in the coming years.

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Boeing delays Virgin’s 737 Max-8 order ahead of new Japan route

The Sydney Morning Herald

23-05-10 01:11

Virgin Australia has postponed the launch of its new Japan service due to ongoing delays in getting its order of Boeing 737 Max-8 jets delivered. Virgin has ordered 25 of the Max-10s, but the carrier’s launch lineup for the long-haul Cairns-Haneda route means it has been forced to use its ageing 737-700s. Boeing has experienced manufacturing delays recently which have affected multiple carriers, including Southwest Airlines.
Treasury debt advisors warn of 'seismic' impact from U.S. debt payment delays


23-05-09 23:36

A group of 18 current and former executives of Wall Street banks have warned that the impasse over the US debt limit threatens financial stability and may lead to a credit downgrade which "would surge broadly throughout the real economy". The former and current chairs and vice chairs of the Treasury Borrowing Advisory Committee fear any delay in "making an interest or principal payment by Treasury would be an event of seismic proportions". Republicans and Democrats are at odds over whether to raise the country's $28.5tn borrowing limit.
U.S. Representative George Santos facing federal charges

The Globe and Mail

23-05-09 23:19

US Congressman, Republican George Santos, has been charged with federal criminal offences, the charges are under seal. Santos has admitted to lying about his college degrees, Wall Street background, Jewish ancestry, and volleyball career. He has been criticized for his financial claims, such as rapidly accumulating wealth and the unusual spending of campaign funds. Non-partisan groups have called for an investigation into Santos's campaign finances. Santos has received pressure to resign, with a campaign against him by members of the public and late-night hosts. Nassau County prosecutors and the New York attorney-general's office previously investigated Santos for possible law violations.
AP sources: US Rep. George Santos facing federal charges

The Toronto Star

23-05-09 22:24

US Representative George Santos, who has admitted to lying about Jewish heritage, his football career, finance degrees, a Wall Street background, and having a lavish real estate portfolio, has been charged with federal criminal offences related to his background and campaign funds, according to two insiders. Details of the case remain under seal in New York City's Eastern District, and Santos had not been notified of the charges when reporters contacted him. Santos has refused to resign and is running for re-election despite calls from reporters, voters, and fellow Republican politicians to step down.
Federal prosecutors file criminal charges against George Santos

The Independent

23-05-09 22:23

Republican congressman George Santos is expected to appear in a New York court on 10 November after criminal charges related to his campaign finances were filed by federal prosecutors. While the charges remain undisclosed, Santos has been under investigation by the Justice Department and faced protests from within his own constituency after revelations emerged about his past during his election campaign. Santos allegedly lied about working for investment banks Citigroup and Goldman Sachs, his education, and his past involvement with an animal charity, among other issues. He has faced calls to resign since winning the New York district seat in 2020.
The digital euro: a solution seeking a problem?

Financial Times

23-05-16 04:24

The European Central Bank's (ECB) plan to issue a digital euro has sparked controversy among citizens, financiers, and politicians who question the benefits of the scheme and fear it could replace cash and threaten decentralisation. Although the ECB plans to pilot the digital currency in coming months, its overall launch may not happen for another five to six years, and as such, the ECB is reportedly struggling to communicate the benefits of the programme. While officials believe that the digital euro will modernise European payments and provide a universal alternative to cash that is backed by the central bank, some opponents say it is unclear what problem it is seeking to solve. Additionally, there are concerns that it could create inefficiencies and complexity by creating a parallel payments system that would only be used by the digital euro.

The ECB, which is eager to promote the euro’s prominence globally, cites declining cash usage as a key motivation for the digital euro initiative. According to an ECB survey, cash usage has fallen from 79% of all point-of-sale transactions in the eurozone in 2016 to 59% in 2020. Policymakers worry that Europe is overly reliant on non-European payment providers like Visa, Mastercard, and even PayPal. Furthermore, as cash usage declines, some people may switch to other means of payment, such as stablecoins (digital tokens backed by fiat currency) or digital currencies launched by rival countries.

The ECB is keen to stress that the digital euro is intended to complement cash, not replace it. Still, bankers are reportedly worried that it could increase the likelihood of bank runs and require them to shoulder the costs of such a substantial project with little upside, especially as basic payments with the digital euro should be free. In any case, the ECB is poised to announce an implementation plan and pilot scheme in October, and this summer, the European Commission plans to set out legislative proposals that specify some of the key design features of the digital currency.

Record buyback spree attracts shareholder complaints

Financial Times

23-05-16 04:23

Executives who award themselves large bonuses after their companies engage in share buybacks that have limited benefit to shareholders are facing criticism from prominent investors, according to research by asset manager Janus Henderson. Last year the biggest 1,200 public companies in the world returned a record $1.3tn to shareholders, triple the level of 10 years ago and almost as much as they paid out in dividends. US President Joe Biden recently introduced a 1% Wall St buyback tax and has now proposed quadrupling it.
Egypt’s exchange rate uncertainty stifling business, say entrepreneurs

Financial Times

23-05-16 04:19

Uncertainty over the exchange rate is hurting businesses and stopping entrepreneurs from investing, warns a group of Egyptian businesspeople. The country has seen the value of its currency halve against the dollar, with rumours of yet another devaluation on the horizon. The crisis began when foreign bond investors saw fit to withdraw $20bn after Russia’s invasion of Ukraine in 2022 and have not returned. Although Gulf States made up for the shortfall of $16.3bn, businesses have not seen significant foreign exchange inflows and there is now a black market in foreign currency as the economic situation continues to cause confusion.
Japan stock index hits 33-year high as investors warm to Tokyo story

Financial Times

23-05-16 08:18

Japan's equities have surged to their highest level in 33 years thanks to renewed interest from foreign investors. Japan's Topix index rose almost 0.6% on Tuesday, nearly marking its highest level since Japan's market bubble burst in 1989, with the Nikkei 225 index rising more than 16% since the start of the year and growing hope of higher governance standards. Investors have put a fresh spotlight on Japan after years of anaemic returns that had seen many fund managers steer clear of their capital markets. Some said Tokyo was now an attractive option for investors who wanted to benefit from Chinese economic recovery without the geopolitical risks. However, Bank of America's latest survey indicates a net 11% of fund managers were underweight on Japan.
Greek election: five questions for markets


23-05-16 05:14

Greece's general election looks set to be inconclusive, creating short-term uncertainty for the market. However, an economy in a stronger position than when Syriza won in 2015 may mean a win by the opposition party will not worry the markets. The cost of living crisis is the biggest issue for voters, with inflation eroding consumers' purchasing power. Greece's long-term borrowing costs are around 4%, lower than Italy, while investors see Mitsotakis, the incumbent prime minister, as steady, given his strong relationships with the US and Brussels.
How Beyoncé makes her fortune – and how she spends it


23-05-16 12:00

Superstar Beyoncé could earn as much as $2.1bn through her Renaissance world tour, adding to the estimated $450m she currently possesses. The vast bulk of Knowles' fortune comes from her expanding beyond recorded music, including international tours, films, fashion and product endorsements. Knowles launched her company, Parkwood Entertainment, in the late 2000s as a creative agency, record label, production company and management company. She sought to control any Beyoncé-related project under the Parkwood umbrella, which has included films, sportswear partnerships with Adidas and endorsement deals with Samsung and L'Oreal.

The global entertainer, who found success at a young age, cofounded Destiny’s Child, managed by her father, Mathew Knowles. Through the popularity of the R&B group, Knowles received a solid financial foundation, enabling her to expand into various other areas such as the creation of her own entertainment enterprise. Now a self-made success, Knowles is almost legendary in status and minimal in her outward-facing social media presence, says Tatiana Cirisano, a music analyst at Midia Research.

Goldman’s SVB client-or-counterparty conundrum

Financial Times

23-05-16 11:19

Former CEO of collapsed Silicon Valley Bank, Greg Becker, recently spoke to the Senate Banking Committee, saying they received external advice from Goldman Sachs to sell their available-for-sale portfolio before raising additional capital. Based on that advice, SVB sold their AFS first before attempting to sell stock on the equity offering. Goldman has been embroiled in the affair and court cases are pending to determine whether the bank acted with advisory responsibilities or simply undertook its role as a market counterparty. Goldman Sachs bought the bonds from SVB and reportedly later, while acting as a client for the stock offering, panicked depositors, precipitating the bank's collapse.
Yellen to meet with Jamie Dimon and other bank CEOs on Thursday as debt ceiling crisis looms


23-05-16 16:20

US Treasury Secretary Janet Yellen is due to meet with top bank CEOs to discuss issues including the debt ceiling, a possible default and the current banking crisis in an annual meeting held by the Bank Policy Institute, according to sources. Citigroup CEO Jane Fraser, JPMorgan Chase CEO Jamie Dimon and Bank of America CEO, Brian Moynihan, are expected to attend. Yellen has also been calling CEOs and business leaders to discuss the potential consequences of such a crisis. The US government is already grappling with a self-imposed 18 October deadline to raise the debt ceiling and ensure that the country continues to pay its bills. On Tuesday, Yellen said in a speech before the banking industry that “the US economy hangs in the balance,” with "no time to waste".
5 takeaways from China’s April economic data as youth unemployment worsened

South China Morning Post

23-05-16 15:30

China's jobless rate among the 16-24 age group rose to 20.4% in April, up from 19.6% in March, according to data from the country's National Bureau of Statistics. The overall urban surveyed jobless rate stood at 5.2% in April, down from 5.3% in March. Meanwhile, retail sales rose by 18.4% in April year-on-year, lower than the expected rise of 20.2%, but up from a 10.6% increase in March. Fixed-asset investment rose 4.7% in the first four months of 2023, down from a 5.1% rise in Q1, according to the same data set.
First on CNN: CEOs warn of ‘devastating scenario’ if America defaults


23-05-16 14:59

Nearly 150 business leaders have signed an open letter to the US president and top congressional leaders warning of potentially devastating consequences if an agreement cannot be reached to raise the debt ceiling and avoid a default. Among the signatories are CEOs of major corporations and financial institutions such as Goldman Sachs, Morgan Stanley and the Nasdaq. "Failure to resolve the current impasse could easily have more negative consequences", the letter warns. Treasury Secretary Janet Yellen has said the US could default on its debt as soon as June 1 if lawmakers fail to take action.
US House Democrat to force vote to expel embattled Republican George Santos


23-05-16 20:31

US Representative Robert Garcia is attempting to have Republican congressman George Santos expelled following federal charges against him for fraud, money laundering and theft of public funds. Santos has pleaded not guilty, calling the allegations a "witch hunt". He has made false claims about his past, including earning degrees from New York University and Baruch College, having worked at Goldman Sachs and Citigroup, and that he was Jewish and his grandparents escaped the Nazis during World War Two. Two-thirds of the House of Representatives would have to vote in favour for Santos to be expelled, in a chamber that Republicans control by a narrow 222-213 margin.
Businesses are in for a mighty debt hangover


23-05-16 18:35

The Economist argues that while Western companies’ balance sheets look benign, a corporate-debt-fuelled cataclysm could be around the corner. Hard profits and fixed-rate debts mean it is unlikely that a disaster is imminent; the default rate for non-financial corporate debt in America and Europe remains at 3%; and many have locked in cheap debt. However, GDP growth in America and Europe continues to decline: first quarter GDP contracted 1.3% quarter-on-quarter in America, and analysts suggest that aggregate quarterly earnings for listed non-financial firms in both America and Europe declined in the first quarter of this year. Rising interest rates are also causing the most substantial strain for those at the flakiest end of the debt spectrum. Floating-rate debt predominately affects the most indebted companies, which are also backed by debt-hungry private equity firms. In addition, the economy may suffer most from the effect of higher interest rates on investment-grade debt, which non-financial firms often heavily rely on.
US executives call on Washington to avert ‘devastating’ debt default

Financial Times

23-05-16 18:19

Over 140 US business leaders have urged President Biden and other congressional leaders to raise the debt ceiling and avoid what they say would be a “potentially disastrous scenario” for the economy. In an open letter from executives including those from Pfizer, Goldman Sachs and KKR on Tuesday, the signatories warned that failure to raise the debt ceiling could have “disastrous consequences”. They added: “Absent a resolution, the government is likely to run out of money as soon as June 1. Action to end the pending debt crisis is necessary now.”
Wall Street's Biggest Banks Face a Harsh Reality Check in China


23-05-16 23:00

According to reports, multinational banks, including Goldman Sachs and Morgan Stanley, are reportedly scaling back their goals and expansion plans in China due to the "deteriorating geopolitical climate" and the increasingly authoritarian direction of President Xi Jinping's government. In particular, the banks are struggling to compete against China's state-owned enterprises, which are "well-entrenched" in the market, making it difficult for global banks to compete. In the face of slowing growth for its economy, China has introduced the most sweeping changes to its financial services, including full ownership of insurers, banks, brokers, and asset managers by foreign firms. However, the country's ongoing geopolitical nuances have caused Wall Street firms to become more cautious about the China market; publicly, everyone is saying the same thing - China is still a massive opportunity, and they have no plans of withdrawing, particularly since such considerable money has already been spent. Privately, Wall Street executives told Bloomberg that it's challenging to maintain the confidence of both sides as tensions escalate, which is expected to intensify as the US election cycle approaches. Many Wall Street giants are considering more drastic job cuts as there is a realization that a fundamental rethink on the world’s No. 2 economy is necessary due to the weakened business climate, fewer opportunities for outsized profits and China's approach to the financial market. While planning to build onshore brokerage, Morgan Stanley is focusing its efforts on its derivatives and futures businesses.