Through cutthroat competition and self-interest one firm has managed to survive for more than a century. And in the process become the symbol of Wall Street. Goldman Sachs: The Company that Rules the World, Youtube 35.17, 2023
In 1886 after making a small fortune from his clothing business, the Jewish immigrant Marcus Goldman decided to get into finance. ibid.
The Goldman Sachs partnership is determined to break into the IPO underwriting business. ibid.
By 1914 Goldman Sachs become a prominent investment bank on Wall Street. ibid.
Goldman Sachs starts more investment trusts … Within a year hundreds of investment trusts go bust, taking down investors and investment banks with them. ibid.
Ford was the biggest IPO in history. ibid.
Legendary trader Gus Levy … his speciality is block trading, a form of arbitrage … For the first time a trader becomes a boss at Goldman Sachs. ibid.
Penn Central’s commercial papers … After the bankruptcy of Penn Central, the investors of its commercial papers are nearly wiped out and they immediately start suing Goldman Sachs for misrepresentation. ibid.
As the economic conditions continue to worsen in the 1970s, more securities Goldman Sachs issued go bad. ibid.
Harvard-educated John Whitehead … the firm needs to operate like the military … Whitehead also started to standardize the investment business of Goldman. ibid.
1983 Goldman Sachs makes a $400 profit … Whitehead retired from Goldman. ibid.
In 1987 Goldman Sachs senior partner Robert Freeman is under arrest for insider trading. ibid.
Goldman Sachs’ reputation has been dragged through the mud. ibid.
At the peak of the dom.com bubble Goldman Sachs goes public … selling 11% of shares. ibid.
By 2006 mortgage-backed securities become one of the most profitable businesses for Wall Street banks. ibid.
2007: The biggest financial storm in recent history: the mortgage meltdown … a financial weapon of mass destruction. ibid.
Goldman Sachs turns to an unlikely saviour: Warren Buffett. ibid.
‘They made a big proprietary bet against the mortgage market.’ ibid. another man in the know
Goldman Sachs has been caught in multiple illegal activities. ibid.
In 1928 Jack Morgan is the most powerful man on Wall Street. Thanks to an era of easy money he and his fellow bankers set loose the Roaring 20s. The Stock Market has climbed nearly 40% in one year. The Twisted History of Morgan Stanley, Youtube 44.04, 2023
It is the worst crash the nation has ever witnessed. For Morgan, whose fortune is cut in half, he is convinced that the only way to save his company and the country is by ousting President Hoover. ibid.
Morgan may have helped put FDR in office but the newly elected leader swiftly turns against him and vows to pursue the bankers responsible for the crash. ibid.
Jack Morgan makes his son Henry Morgan and their business associate Harold Stanley partners of this newly formed company, Morgan Stanley. ibid.
The house of Morgan has always thrived leveraging other people’s money, and the birth of Morgan Stanley is no different. ibid.
As fresh industries burst on to the scene they turn to Wall Street. ibid.
Rival investment banks start to redefine the rules of the game. ibid.
These companies were very smart to raise money at the peak of the bubble. ibid.
In 1993 they find just the target company: by the early 1990s S G Warburg is one of the most prominent British investment banks. The marriage between the two companies will create the world’s largest investment bank … The potential merger goes south. ibid.
A new contender enters their radar: Dean Witter. ibid.
Dean Witter, Discover & Co, and Morgan Stanley completed their merger on May 31st 1997. ibid.
Despite his power at the firm, Purcell has no idea how to run Morgan Stanley. ibid.
A steep decline in performance and a mass exodus of talented employees. ibid.
The old guard prevailed … The exiled king comes back to power. John Mack is about to become the CEO of Morgan Stanley. ibid.
He begins to encourage traders to take audacious risks aiming for hefty profits. ibid.
Opportunity presented itself – mortgage-backed securities. ibid.
Morgan Stanley is about to fall to rock bottom. ibid.
Salvation for Morgan Stanley comes from an unlikely source – the government. ibid.
10 years after the global crisis of 2008, the world is still reeling. But no-one has yet been held responsible. The Men Who Stole the World (and got away with it), Youtube 54.53, 2024
If we do nothing, everything could happen again. ibid.
Wall Street executives and politicians were complicit in creating the crisis. ibid.
‘Our government is supporting home ownership because it is good for America, it is good for families, it is good for our economy.’ ibid. Bush
The public and banks were complicit in committing bank fraud. ibid.
Banks began to borrow a massive amount of money to buy more and more mortgage loans, and package them into derivatives. ibid.
The Lehman bankruptcy: you are talking about the largest single bankruptcy in the history of financial institutions … $693 billion. ibid.
One more time Wall Street misrepresented its financial condition. At the same time millions were spent in bonuses for traders. This was the jackpot. ibid.
The inevitable happens: the house of cards came falling down.
From 2008 to 2011, 30 million people around the world lost their job. Bailouts of banks cost billions to government. Austerity plans spread everywhere. ibid.