How Goldman Sachs Turned A $1.3 Billion Investment From Libya Into $25 Million In Less Than A Year (A 98% LOSS)
Col. Gadhafi's son, Saif al-Islam Gadhafi, on left, with Mustafa Zarti, a former executive at Libya's sovereign-wealth fund.
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In early 2008, Libya's sovereign-wealth fund controlled by Col. Moammar Gadhafi gave $1.3 billion to Goldman Sachs Group to sink into a currency bet and other complicated trades. The investments lost 98% of their value, internal Goldman documents show.
What happened next may be one of the most peculiar footnotes to the global financial crisis. In an effort to make up for the losses, Goldman offered Libya the chance to become one of its biggest shareholders, according to documents and people familiar with the matter.
Libya was furious at Goldman over the nearly total loss of the $1.3 billion it invested in nine equity trades and one currency transaction, people involved in the matter say. A confrontation in Tripoli between a top fund executive and two Goldman officials left the bankers so rattled that they made a panicked phone call to their bosses, these people say. Goldman arranged for a security guard to protect them before they left Libya the next day, they say.
Discussions inside Goldman about how to salvage the fractured relationship included Lloyd C. Blankfein, the company's chairman and chief executive, David A. Viniar, its finance chief, and Michael Sherwood, Goldman's top executive in Europe, according to documents reviewed by The Wall Street Journal and people involved in the negotiations. All three executives declined to comment.
Youssef Kabbaj, the Goldman executive in charge of North Africa, became a frequent presence at the Libyan Investment Authority as the investment bank worked to expand the relationship. He worked with the fund's management on investment ideas and encouraged younger employees to deepen their financial knowledge by attending Goldman training sessions, these people said.
Goldman soon carved out a new business with the Libyans, in options—investments that give buyers the right to purchase stocks, currencies or other assets on a future date at stipulated prices. Between January and June 2008, the Libyan fund paid $1.3 billion for options on a basket of currencies and on six stocks: Citigroup Inc., Italian bank UniCredit SpA, Spanish bank Banco Santander, German insurance giant Allianz, French energy company Électricité de France and Italian energy company Eni SpA. The fund stood to reap gains if prices of the underlying stocks or currencies rose above the stipulated levels.
But that fall, the credit crisis hit with a vengeance as Lehman Brothers failed and banks all over the world faced financial crises. The $1.3 billion of option investments were hit especially hard. The underlying securities plunged in value and all of the trades lost money, according to an internal Goldman memo reviewed by the Journal. The memo said the investments were worth just $25.1 million as of February 2010—a decline of 98%.
Read the whole thing at the WSJ (link is thru Google)...
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Max Keiser explores the details...
DailyBail
Updated with new details from Max Keiser.
Reader Comments (13)
Before its announcement Tuesday, WHO had assured consumers that no adverse health effects had been established.
A team of 31 scientists from 14 countries, including the United States, made the decision after reviewing peer-reviewed studies on cell phone safety. The team found enough evidence to categorize personal exposure as "possibly carcinogenic to humans."
http://www.cnn.com/2011/HEALTH/05/31/who.cell.phones/index.html
Breaking story...
BTW Goldman Sucks has been paying off obama since he was a nothing junior senator.
As analysts debate possible motives behind President Obama’s United Nations-backed military intervention in Libya, one angle that has received attention in recent days is the rebels’ seemingly odd decision to establish a new central bank to replace dictator Muammar Gadhafi's state-owned monetary authority — possibly the first time in history that revolutionaries have taken time out from an ongoing life-and-death battle to create such an institution, according to observers.
In a statement released last week, the rebels reported on the results of a meeting held on March 19. Among other things, the supposed rag-tag revolutionaries announced the “[d]esignation of the Central Bank of Benghazi as a monetary authority competent in monetary policies in Libya and appointment of a Governor to the Central Bank of Libya, with a temporary headquarters in Benghazi.”
more http://www.thenewamerican.com/world-mainmenu-26/africa-mainmenu-27/6915-libyan-rebels-create-central-bank-oil-company
Barack Obama has a major Wall Street and Washington problem that the media so far is refusing to acknowledge or explore. He is in the pocket of the Wall Street firms and mortgage security companies that are at the center of the collapse of the real estate bubble. He is closely tied to at least two of the Fannie Mae principals. As Ricky Ricardo would say, “Barack, you got some splaining to do.”
Let’s start with the numbers. Why is a first term Senator pulling down almost $300,000 a year from Goldman Sachs, Lehman Brothers, Bear Stearns, Fannie Mae, Freddie Mac, AIG, Countrywide Financial, and Washington Mutual? He has not even completed his fourth year in the Senate and received a total of $1,093,329.00 from these eight companies and their employees. (all data from OpenSecrets.org). John McCain’s numbers, according to OpenSecrets.org for the period 1990-2008 (i.e., 18 years worth of data) only collected $549,584.00. In other words, Barack is receiving $273,582.25 (and 2008 is not over) per year while McCain raised a paltry $30,532.44.
Want another shocker? Barack Obama has received more from one source–Goldman Sachs $542,252.00–than McCain has from all of the companies combined. Who the hell is more beholden to lobbyists? And why does a junior Senator from Illinois rate this kind of dough?
more
http://www.noquarterusa.net/blog/2008/09/21/baracks-wall-street-problem-is-now-americas/
Dude beats the S&P 500 for 16 straight years, which makes him an instant and permanent Wall Street legend. Year 17 ended BM's streak, and spectacularly so: he lost so much money that year that his clients' 17-year batting average was below the league median and indeed approaching the Mendozo line.
Beware blind faith in numbers, or in anything else for that matter.
Pres.Dover, first name Ben, is a Free Mason, and like Prescott Bush and the other Free Masons back in the 1930s, the power behind the scenes is destroying the Constitutional government as we sit here. Col. Smedley Butler, a loyal Marine, infiltrated the group and advised FDRoosevelt of the coup attempt and it was foiled.
14 generals, following a meeting where arresting Pres. Clinton for selling military secrets to the Chinese was planned, were knocked out of the sky in their helicoptor transport. So the military is much more secretive now about their efforts to maintain the U.S.. If people keep acting like stupid animals by licking the hand that feeds them, instead of waking up to the group that is dumbing them down and putting a shut-off valve on their food, this could really get rough. Congress' bowing down to Israel kick-backs from foreign aid reached an all-time low recently when AIPAC meeting sponsors told the congressional audience members that the congressperson clapping and hooraying the most and the loudest would get the largest campaign contribution. That is why those mewling sons of bitches were clapping for B. Netanyahu. Sons of bitches usually whimper and cry, but these ones mewled. After they collected their ill gotten 'contribution', they resumed their identities as decadent pultroons, still subject to black-mail in cases. And things got back to normal.
Mothers always tell their children 2 lies when they are very young. Catholic, protestant, monkey, bird, gerbil, hindu, Bantu, all the same. My mama lied to me as well, and I found out the first time I played football with my older cousins. Those 2 lies are that you are perfect and that you are safe. Liberated Citizen has gone past that limited false sense of awareness. You may have got past that message as well. The manager of the place where I do my blog-hopping has a mama that still stays close to her. Almost daily. This manager person insists on remaining unaware of any corruption in government and ignores the peril in allowing it to continue. She says Obama would never sell out America, and she is serious and naive by intent, ignoring that the piece of trash in the White House has already been doing it for 3 years. At the age of 29 years old and with two children, this fool believes that she can get away with funding the evil in the Obama administration and wallowing in the suffering as a result. It is all very TALMUD, so she is guilty of crimes against humanity. Though she does listen thoughtfully when she is not too busy at work, too bad that it is not enough.
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Miller used to call my desk at alex brown every week looking for energy ideas...he felt entitled to them you could say...i was only 24 at the time, and knew little about him, but enough to know that i didn't like the conversations...constantly pushing me to give him inside info on companies we had brought public...
and for the record i gave him nothing and once i steered him into a recent ipo we had done that 12 months later went kaput...i felt bad about that one...
http://www.npr.org/blogs/itsallpolitics/2011/05/31/136816737/goldman-sachs-gets-another-washington-insider-judd-gregg
[snip]
If you missed the announcement late last week that Goldman Sachs hired former Republican Sen. Judd Gregg to be an international advisor, don't blame yourself.
It came out Friday when most people were thinking more about the long holiday weekend ahead than the latest effort by the investment bank to add to its stable of worthies an influential former Capitol Hill lawmaker.
Anyway, the former senator from New Hampshire who, as you'll recall, TURNED DOWN president Obama's offer of the COMMERCE SECRETARY'S job, will join Goldman's board of international advisors, nearly 20 former corporate chief executives and government officials. [Emphasis Mine].
Obama taps energy executive Bryson as Commerce chief
http://www.reuters.com/article/2011/05/31/us-obama-commerce-idUSTRE74U42B20110531
[snip]
Bryson would replace Gary Locke, who Obama has chosen to become U.S. ambassador to China. His nomination could be thwarted by Senate Republicans, who have threatened to withhold support until Obama advances long-stalled trade agreements with South Korea, Panama and Colombia.
http://www.reuters.com/article/2011/05/31/us-obama-commerce-idUSTRE74U42B20110531
[snip]
Bryson was chairman and chief executive of energy group Edison International from 1990 to 2008. At the beginning of his career he founded the Natural Resources Defense Council, an environmental group.
Ok now this....
The First Wind Team
http://www.firstwind.com/about-first-wind/team_alvarez
[snip]
Mr. Alvarez joined First Wind from Edison International, where he was the Vice President of Strategic Planning.
Prior to Edison, he served as Executive Vice President, Chief Financial Officer, and General Counsel at Nexant Inc., a privately held San Francisco-headquartered company that provides software and advisory services to the global energy industry.
now this will be reposted here: http://dailybail.com/home/alan-grayson-has-the-federal-reserve-ever-tried-to-manipulat.html
Note: Alvarez was an Enron executive.........................
When the once highly secretive London Bullion Market Association (LBMA) -- its venerable membership comprising the world's largest gold dealers -- published its daily clearing volume for the first time in January 1997, it rocked the tight-knit world of international gold traders and analysts.
According to this first of many subsequent LBMA press releases, thirteen hundred tonnes of gold (representing more than 50% of the world's annual mine production) changed hands daily in this fog-shrouded center of the global gold market. This figure represented over $10 billion per day and $4 trillion per year in bullion banking activity!
The gold market had always stood in austere, quiet contrast to the highly charged, mega-volume world of stocks and bonds. Now this first LBMA report forced analysts, investors, and brokers to reassess their understandings of the gold market. While some revelled in the glow of the large LBMA numbers, others began to raise some very important and rather unsettling questions. First, Why was this much gold on the move? Second, Where was all this gold going? And third, Where was all this gold coming from?
It was once said that "gold and oil can never flow in the same direction". If the current price of oil doesn't change soon we will no doubt run out of gold.
This line of thinking is very real in the world today but it is never discussed openly. You see oil flow is the key to gold flow. It is the movement of gold in the hidden background that has kept oil at these low prices. Not military might, not a strong US dollar, not political pressure, no it was real gold. In very large amounts. Oil is the only commodity in the world that was large enough forgold to hide in. Noone could make the South African / Asian connection when the question was asked, "how could LBMA do so many gold deals and not impact the price". That's because oil is being partially used to pay for gold! We are going to find out that the price of gold, in terms of real money ( oil ) has gone thru the roof over these last few years. People wondered how the physical gold market could be "cornered" when it's currency price wasn't rising and no shortages were showing up? The CBs were becoming the primary suppliers by replacing openly held gold with CB certificates. This action has helped keep gold flowing during a time that trading would have locked up.
http://www.usagold.com/goldtrail/archives/another1.html
Goldman does not lose money.
Even if it has to play both sides of the deal, they do not lose money.
Which makes me think that a prosecutor could take them to the cleaners