Goldman Sachs Chairman & CEO Says Company Is Part of a “Virtuous Cycle” With a “Social Purpose” Even as It Apparently Moves Markets in “Miraculous” Ways (SEC, Where Are You?)

~~By InsightAnalytical-GRL

A couple of weeks ago we brought you this little ditty about how some executive at Goldman Sachs explained how moral the marketplace is (See: This Would Be the Laugh of the Day if It Weren’t So Aggravating: Pious Rationalizations About “Morality in the Marketplace” from Our Buddies at Goldman Sachs (Posted 10/21/2009). 

Goldman Sachs’s Griffiths Says Inequality Helps All

A Goldman Sachs International adviser defended compensation in the finance industry as his company plans a near-record year for pay, saying the spending will help boost the economy.

“We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all,” Brian Griffiths, who was a special adviser to former British Prime Minister Margaret Thatcher, said yesterday at a panel discussion at St. Paul’s Cathedral in London. The panel’s discussion topic was, “What is the place of morality in the marketplace?”

Goldman Sachs Group Inc., based in New York, set aside $16.7 billion for compensation and benefits in the first nine months of 2009, up 46 percent from a year earlier and enough to pay each worker $527,192 for the period. The amount set aside this year is just shy of the all-time high $16.9 billion allocated in the first three quarters of 2007. Goldman Sachs spokesman Michael DuVally in New York declined to comment.  (MORE)

Now, we’re in for ANOTHER treat from the grand poobahs at Goldman…From The Sunday Times (U.K.) profile on Goldman’s chairman and CEO, Lloyd Blankfein:

November 8, 2009

I’m doing ‘God’s work’. Meet Mr Goldman Sachs

John Arlidge

Luckily for him and his firm, he’s a damn good salesman. He starts with a little humility. He understands that “people are pissed off, mad, and bent out of shape” at bankers’ actions. Goldman played its part in the meltdown that almost destroyed the global financial system. It, like most other banks, lent too much money, made its first quarterly loss for more than a decade last year and ended up taking bail-out cash from Washington. “I know I could slit my wrists and people would cheer,” he says. But then, he slowly begins to argue the case for modern banking. “We’re very important,” he says, abandoning self-flagellation. “We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle.” To drive home his point, he makes a remarkably bold claim. “We have a social purpose.”

Social purpose? Those who have lost their jobs or seen their pay slashed thanks to bankers who flogged dodgy mortgages and dreamt up investments so complex not even they understood them, would gladly tell him where to stick his social purpose…

This piece goes on for 7 web pages and gets deep into the secretive Goldman Sach spider web and its political force, so it’s worth taking your time to rummage through it all.

Meanwhile, over at one of my favorite sites, Chris Martenson has been doing some analysis in a piece out on 11/6/200 titled “Market Recap – Ridiculous Productivity“. The start of the piece takes a look at Goldman Sach’s pattern of amazing level of investment success in the current financial markets (italics mine). (And, just for the record, Goldman Sachs profit last quarter was $3.2 billion and the average pay of the 30,000 on staff is going to be around $700,000 this year with top earners making LOTS more…)

After digging around and sifting through the things both said and not said, I have come to the conclusion that what we are seeing are the likely effects of a rescue operation.

By this I mean a large injection of stabilizing cash to one or more parties, possibly related to the recent large bankruptcies.  Two of my friends, who have been actively trading for more than 20 years between them, threw in the towel this week, as their patterns and methods are no longer working.

Their conclusion is the same as mine; this market is not trading like it used to.  It is trading chaotically, counterintuitively, and as if there’s some sort of distorting influence involved.

First, we might just wonder if this isn’t the impact of a rogue firm with entirely too much power moving the market for its own benefit.

When we examine the results of Goldman’s latest quarterly trading results, obviously we have a strong suspect.

He quotes from a piece discussing how Goldman Benefits from Trading Bonanza and concludes:

Only one day with trading losses out of the entire quarter?  A 98.5% win-rate?  Sorry folks, this is so far beyond the realm of statistically possible that we must search for other reasons.  There can be no doubt that Goldman is enjoying an advantage not shared by the rest of the market.

He has a chart up which shows some of the shenaigans in the market following certain data reports.  But there’s one market move in particular that seems to have resulted from perhaps a bit of advance knowledge?

We see the volatility as the market first surged on the GDP report and then slumped the day after.  Then there was a spike on the ISM (mfg) data that also gave up the gains shortly thereafter.  Then we had the FOMC follies where the market looked like an EKG of a heart attack victim for a while before finally slumping away all the day’s gains.Today’s [Friday, November 6] 200 point Dow spree was said to be due to favorable unemployment data and excellent productivity gains, but if you were watching the overnight futures, you noticed that the lift-off actually began at 3:00 a.m.  As a trader, I am quite familiar with this pattern.  When large futures gains are recorded beginning at 3:00, you can nearly always count on those gains holding through the day.

Inquiring minds would like to know how the future traders seemingly know about the excellent economic news that has not yet been released.  Hello, SEC?  I have a job for you.

Well, apparently, part of doing God’s work involves getting a nice leg-up so that markets can move in miraculous ways.

It’s clear that while Goldman Sachs is apparently the OTHER “chosen one” (with Barack Obama the one placed in the White House), the rest of us who are trying to restore our personal wealth so that we’ll be able to eat during our golden years are plainly stuck somewhere near hell…