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Goldman Sachs and Morgan Stanley Make Unthinkable Admissons

-From: AF

To: bellringer@fourwinds10.com

Sent: Monday, September 22, 2008 12:04 PM

Subject: Goldman Sachs and Morgan Stanley make unthinkable admissons

Goldman Sach's and Morgan Stanley's latest message to America? Get a load of this one - "There is no future remaining in investment banking" - ???? - Are you kidding me? Can I have a translation please? They are saying that since the substantial wealth of America has been stolen out of our nation, and Americans have started to wake up to the theft and since "the jig is up," and there is no substantial investment money left to steal, they are moving on to greener pastures.

Of course, Goldman Sachs and Morgan Stanley failed to mention that they are some of the main culprits who stole it, along with their banking/Wall Street cohorts and other enemies of freedom (like our bought and paid for media who took their payoffs and said nothing while thousands of people screamed for their help - now they pretend to be the white knights), with the assistance of our scum-sucking federal government politicians, who protected the theft all along the way with decades of "non-enforcement" of our existing laws, in spite of millions of taxpayers crying out for help.

But do you care America? Naaaahh... not too much, right? Certainly not to get really ticked off and want to do something. After all, you still have food on your table, you have gas for your car and you have Jerry Springer and the rest of the "broadcast medication" to drug your spirit to kill any sense of freedom you might have. Yes..it is true you have all these things.... but for how long?

So, go ahead, vote for the status quo - AGAIN - go and vote the usual party lines for Obama or McCain and continue to be an insane person - you know, a person who does an act, knowing what the results have been in the past, but expecting something different. Do you really think that just because they have a woman and a man of color on the ticket that this will change anything? Do you honestly believe that these people have not been bought and paid for by the same enemies of America that have owned the others? What will it take for you, America, to start understanding that beating your head with a hammer is really causing harm?

I hope if there is one thing you see out of this disaster is that the banking elites (not just the Wall Street degenerates, but the higher ups), our federal government and our major media are the greatest enemies of our freedom imaginable, far more than any standing army in history.

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http://www.bloomberg.com/apps/news?pid=20601087&sid=aoDmO_d0IJSU&refer=home

Goldman, Morgan Stanley Bring Down Curtain on an Era (Update2)

By Christine Harper and Craig Torres

Sept. 22 (Bloomberg) -- The Wall Street that shaped the financial world for two decades ended last night, when Goldman Sachs Group Inc. and Morgan Stanley concluded there is no future in remaining investment banks now that investors have determined the model is broken.

The Federal Reserve's approval of their bid to become banks ends the ascendancy of the securities firms, 75 years after Congress separated them from deposit-taking lenders, and caps weeks of chaos that sent Lehman Brothers Holdings Inc. into bankruptcy and led to the rushed sale of Merrill Lynch & Co. to Bank of America Corp.

``The decision marks the end of Wall Street as we have known it,'' said William Isaac, a former chairman of the Federal Deposit Insurance Corp. ``It's too bad.''

Goldman, whose alumni include Henry Paulson, the Treasury Secretary presiding over a $700 billion bank bailout, and Morgan Stanley, a product of the 1933 Glass-Steagall Act that cleaved investment and commercial banks, insisted they didn't need to change course, even as their shares plunged and their borrowing costs soared last week.

By then, it was too late. As financial markets gyrated -- the Dow Jones Industrial Average whipsawed 1,000 points in the week's last two days -- and clients defected, executives at the two firms concluded they had no choice. The Federal Reserve Board met at 9 p.m. yesterday and considered applications delivered that day, said Michelle Smith, a spokeswoman for the central bank. The decision was unanimous, she said.

`Blood in Water'

``There's blood in the water in the industry and the sharks are circling,'' Peter Kovalski, who helps oversee about $10 billion at Alpine Woods Capital Investors LLC, said at the end of last week. ``It all comes down to perception and the current trust within the community.''

Morgan Stanley rose 16 percent to $31.60 as of 9:31 a.m. in New York Stock Exchange composite trading. Goldman advanced 3 percent to $133.37.

Wall Street hasn't had such a shakeup since the 1980s, when firms including Morgan Stanley and Bear Stearns Cos. went public and London's financial markets were altered forever with the so- called Big Bang reforms implemented in 1986. Bear Stearns disappeared in March, when it was bought by JPMorgan Chase & Co.

The announcement paves the way for the two New York-based firms, both of which will now be regulated by the Fed, to build their deposit base, potentially through acquisitions. That will allow them to rely more heavily on deposits from retail customers instead of using money borrowed in the bond market -- the leverage that led to the undoing of Bear Stearns and Lehman.

Depositors Rule

Morgan Stanley has taken $15.7 billion of writedowns and losses on mortgage-related securities and other types of loans since the credit crunch started last year. Goldman's tally stands at about $4.9 billion. While both companies have remained profitable and avoided money-losing quarters suffered by Lehman and Merrill Lynch, their revenue from sales and trading and investment banking has been declining this year.

``Deposit-banking is king right now,'' said David Hendler, an analyst at CreditSights Inc. in New York. ``It's the only meaningful critical-mass way to make money.''

Mitsubishi UFJ Financial Group Inc., Japan's largest bank, said today it will pay up to 900 billion yen ($8.4 billion) for as much as a fifth of Morgan Stanley. The deal would mark the biggest overseas acquisition by a Japanese financial company, according to data compiled by Bloomberg.

Building Deposit Base

The Japanese bank will become ``a valuable partner as we transition to a bank holding company and build our bank services and deposit base,'' Morgan Stanley Chief Executive Officer John Mack said in a statement today.

The deal announced today came after Morgan Stanley held talks last week to pursue a merger with Wachovia Corp. That deal became less likely now that Morgan Stanley is becoming a bank holding company, said Tony Plath, a finance professor at the University of North Carolina at Charlotte.

Morgan Stanley, the second-biggest securities firm until this week, had $36 billion of deposits and 3 million retail accounts at the end of August. The company plans to convert its Utah-based industrial bank into a national bank.

``This new bank holding structure will ensure that Morgan Stanley is in the strongest possible position,'' Chairman and CEO Mack, 63, said in a statement last night. ``It also offers the marketplace certainty about the strength of our financial position and our access to funding.''

Citigroup, JPMorgan

Goldman, the largest and most profitable of the U.S. securities firms, will become the fourth-largest bank holding company. The firm already has more than $20 billion in customer deposits in two subsidiaries and is creating a new one, GS Bank USA, that will have more than $150 billion of assets, making it one of the 10 largest banks in the U.S., the firm said in a statement last night. The firm will increase its deposit base ``through acquisitions and organically,'' Goldman said.

``Goldman Sachs, under Federal Reserve supervision, will be regarded as an even more secure institution with an exceptionally clean balance sheet and a greater diversity of funding sources,'' Lloyd Blankfein, 54, Goldman's chairman and CEO, said in the statement.

The Washington-based Fed is the primary regulator of bank- holding companies, which are firms that own or control banks. Citigroup Inc., Bank of America Corp. and JPMorgan are bank- holding companies regulated by the Fed.

Less Risky Securities firms, by contrast, had been regulated by the Securities and Exchange Commission. The SEC's future becomes dimmer with the change in Goldman and Morgan Stanley's structures.

``You can't kiss goodbye to the last two important investment banks without noting that the house is empty,'' said David Becker, a former SEC general counsel who is now a partner at Cleary Gottlieb Steen & Hamilton in Washington. ``It's a downward spiral where the less significant the population you regulate, the less your available resources.''

The change is also likely to lead to less risk-taking by the companies and possibly lower pay for their employees. Both Goldman and Morgan Stanley held more than $20 of assets for every $1 of shareholder equity, making them dependent on market funding to operate.

Goldman, in particular, has been remarkable for the high bonuses it pays to its employees. Goldman's CEO and two co- presidents were each paid more than $67 million last year.

``They're going to have to protect their deposit bases by law, and the days of high leverage are gone,'' said Charles Geisst, a finance professor at Manhattan College in Riverdale, New York, who wrote ``Wall Street: A History.'' ``The days of the big bonuses are gone.''

To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net.

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