Entries Tagged 'Goldman Sachs' ↓
September 22nd, 2008 — Bailout, Commercial Banks, Congress, Conversion, Credit Crisis, Credit Crunch, Economy, Goldman Sachs, Government, Investment Banking, Investment Banks, Morgan Stanley, Paulson, Regulation
The separation of investment banking and commercial banking has ended.
Wall Street’s last two stand-alone investment banks - Goldman Sachs [[GS]] and Morgan Stanley [[MS]] - converted into bank holding companies on Sunday night - allowing them to purchase retail banks and streamline the way they borrow from the Federal Reserve.
While it gives the former investment banks more stability and easier access to capital, it also puts Goldman and Morgan under the watchful eye of the Fed, as it increased government’s regulatory oversight. As banks, Morgan and Goldman will be forced by this oversight to take less risk, which will ultimately mean fewer profits.
The conversion is the latest in a series of events on Wall Street as it stumbles through a global credit crisis. In the past week, the government has announced a $700 billion plan to bail out the financial sector by buying up troubled mortgage assets and an $85 billion loan to insurance giant AIG. Also during the roller-coaster week, Lehman Brothers filed for bankruptcy and Bank of America took control of Merrill Lynch.
September 17th, 2008 — 1987, AIG, Bailout, Economy, Fed, Goldman Sachs, Investment Banks, Market Crash, Morgan Stanley
Stocks crashed Wednesday, with the Dow in a freefall of 449 points in the second worst session of the year, as the rescue of AIG only increased fears about the stability of financial markets.
The Dow today fell to the lowest level since November 2005, and the S&P 500 lost nearly 5%, to its lowest point since April 2005.
Financial stocks tanked across the board, with Goldman Sachs [[GS]] down 21% and Morgan Stanley [[MS]] down 29% on fears about their profits and ability to raise capital under current economic conditions.
Meanwhile, a measure of corporate borrowing costs rose to levels not seen since the crash of 1987.
In global markets, European indexes ended lower and Asian stocks were down with the exception of Japan’s Nikkei.
September 17th, 2008 — AIG, Banking, Credit Crisis, Economy, Goldman Sachs, Investment Banks, Lehman Brothers, Morgan Stanley
Shares of Wall Street firms Morgan Stanley and Goldman Sachs took a severe beating on Wednesday despite both companies releasing better-than-expected quarterly results just a day earlier.
The last-minute $85 billion rescue of AIG by the Federal Reserve did little to calm investors’ fears, and U.S. stocks have dropped as much as 3.5%.
Goldman Sachs [[GS]] shares plunged 22% Tuesday afternoon, and Morgan Stanley [[MS]] shares dropped to their lowest level in ten years, crashing 37%.
The selloff in the two investment banks continued Wednesday as fears about the U.S. financial services sector engulfed financial markets worldwide.
In a bid to offer clarity about the firm’s health, Morgan Stanley delivered its quarterly results late Wednesday - a day earlier than expected - that move did little to put investors at ease.