Goldman Sachs: everything about the bank
Goldman Sachs is one of four banks in America today that are among the largest. Initially, since its formation (1869), this organization has been engaged only in exchange trading. However, in the 20th century, in connection with the change of leadership, Goldman Sachs became an investment bank.
All the years of its existence, this financial institution has worked as steadily as possible. This is evidenced by the fact that for the period from 1869 to today, only ten executive directors have changed here.
The background to the emergence of one of the largest banks in America today began in 1848. During this period, clashes began to occur in Germany, which led to casualties. This situation was the beginning of a revolution. Many people in Germany were faced with a choice. Take them these events or leave? 27-year-old Marcus Goldman decided that he should look for happiness overseas.
In America, he began working as a salesman.And thanks to his grip Marcus was able to settle down in Philadelphia, opening a clothing store there. After that, he arranged his personal life. His chosen one was the girl Bertha, who came to America from Bavaria. Interestingly, her last name was also Goldman.
The family lived happily. In 1860, the couple grew up already five children. Goldman got a real estate, but always dreamed of realizing himself as a businessman.
That is why in 1869 he moved to New York and began to engage in securities. In his opinion, this business was the most promising. Marcus opened a brokerage. She was not yet a Goldman Sachs company. The broker, who came to America from Germany before 1882, conducted his business without partners.
Marcus's first customers were jewelers. They left him securities, which were the promissory notes of their clients. Affairs of the office were quite successful. Goldman was even able to get a quarter-million dollar annual income.
Creation of the company
Marcus was proud of his work, but always dreamed of supporting a reliable and good companion. Business continued to expand, and in 60 years a partner for Goldman was simply necessary.
Finally, in 1882a successful broker made his final choice. And this decision has determined the main features of the investment business not only in the United States, but in the whole world.
Goldman’s partner was the husband of his youngest daughter Louise. And this choice was not accidental. Marcus saw in the son-in-law Samuel Saxe not only a faithful business associate, but also an excellent heir. It was to him that Goldman decided to abandon his business, which later sounded from the business world simply as The Firm, that is, the “Firm”. Then she was called "Goldman Sachs." The turnover of the established company grew at a fast pace. And three years later, Goldman’s son Henry and his son-in-law Ludwig Dreyfus joined Marcus and Samuel.
In 1904 there was a change in the management of the company. After the death of Marcus Goldman, Samuel Sachs was at the helm of the establishment. He led the bank until 1929, that is, until the period when the collapse of the economy began in the country, followed by the Great Depression.
But at the turn of the century, Goldman Sachs Bank was considered a very strong player on the stock exchange. He offered his clients consulting in the field of acquisitions and mergers, as well as cash management.
The activities of the bank in 1906-1969.
At the beginning of the twentieth century, Goldman Sachs began playing a leading role in the newly emerged IPO market. It was the initial public offering. Over time, such activity (underwriting) has become the calling card of the institution.
In 1906, the bank conducted the largest IPO at that time. He made an initial subscription to the Sears, Roebuck & Co. general store offerings.
Interestingly, Goldman Sachs is a bank that actively attracted the best graduates who have graduated from elite business universities as their employees. It was a new trend in personnel approach. In the future, it many times rescued the institution.
In 1909, the company management drew attention to a young man - Cindy Weinberg. One of the partners of the bank persuaded him to continue his studies in the field of finance, paying for the education of a guy at Columbia and New York universities.
After graduation, Cindy showed extraordinary ability in the investment business. In 1927 he became a partner of the company, and three years later - its head.
Weinberg headed the bank entrusted to him for 39 years. He curtailed active exchange activities and moved to investment banking.During Weinberg’s leadership, the firm organized several new divisions that worked on arbitration operations, municipal bonds, and doing financial analysis.
In 1950 a new star rose in the bank. She was Gus Levy. He pushed aside Weinberg and formed the company's current and aggressive philosophy.
Since then, it took about seventy years. The world has radically changed. Liners began to fly across the ocean, flights into space were a real victory for mankind, and a small box with a monitor and keyboard appeared on the tables of users. In many ways, the pulse and rhythm of life of earthlings has changed the Internet.
The achievements of mankind were reflected in the stock market in 1996-2002. Here internetization and computerization have found an unusual reflection in the form of a dot-com bubble. Goldman Sachs did not remain aloof from this process. The bank became the first underwriter involved in the withdrawal of high-tech companies on the stock exchange. Obvious success in this matter can be considered working with Microsoft, as well as with Yahoo.
However, there were other examples. Thus, a third of such companies during the IPO had obvious losses. Nevertheless, the bank brought almost fifty dotcom subscriptions.Among them were those who in the near future certainly expected failure. Specialists of the company constantly reduced their requirements for the profitability of dot-coms. Soon this question stopped rising altogether.
During this period, the bank worked like a packaging factory. He took a beautiful wrapper and wrapped it in a new .com. Such products went off with a bang, because the general public did not suspect that the bank had changed the rules of the game. He began to show the agreement in the light that was beneficial only to him, and did not convey all the information to the investor. The average price of such shares, which were placed through Goldman Sachs, was almost four times higher than the offer price.
Those who invested their money gained insight in mid-March 2002. It was then that the NASDAQ Composite index fell 11%. Since November of the same year, this figure has fallen almost in half. According to some experts, the loss of investors amounted to $ 5 trillion.
Bank "Goldman Sachs" came out, as they say, unscathed. After all, he "just offered" shares, earning a commission on this. However, the result was not quite beautiful.The facts of bribes have surfaced to the tops that promoted Internet companies.
A person who dreams of securely investing his money, by all means stopped his eyes on an apartment or house in the USA that would be located in Florida or California. How could diamonds, gold and even works of art compare with them? So many people believed. The Golman Sachs Bank also understood this, turning the theoretical possibility into another soap bubble. He was cheated in 2006.
The chain was very simple. The bank issues a huge amount of mortgage loans. Under them were issued synthetic bonds CDO. They were shipped to customers in "tons". The main buyers were gullible insurance companies and pension funds. At the same time, the bank recommended the purchase of “ultra-reliable” securities to its customers, betting against a mortgage.
And then came 2007. Someone first did not pay mortgage contributions. Behind him appeared the second, third, etc. It was a time when the super-reliable "American Dream" market suffered a complete collapse. Along with him, the CDO markets have collapsed.
The consequences of all these actions were terrible. Entire districts and neighborhoods appeared in the country, on the territory of which ghost houses were built. In 2007, close to a hundred mortgage agencies.Some of them were even nationalized.
The federal budget has spent 7 trillion dollars to counter the crisis.
As for the bank itself, it managed to survive, although in this situation it was also not easy for him. Shares of Goldman Sachs fell 13%. However, the firm survived. The situation had to be adjusted by the US budget. And the initiator of this was the incumbent Finance Minister Henry Paulson, who until his entry into this position was the first person of the Firma.
After the next bubble burst, the financiers began to look for a replacement for it. Whether someone likes it or not, such bubbles or drivers are a very important and even integral feature of currency, commodity and stock markets. And here the main thing is to anticipate developing events and be among the first to get the maximum amount of profit.
And next was the Goldman Sachs forecast for oil. It is very difficult to artificially shake such a global market in which black gold is sold. Players who are at the levels of the company, this is impossible. In the absence of serious problems in the world that could contribute to a sharp decline in oil production, the bubble did not inflate.And then the "attacks on black gold" began, in the list of which the main ideologues were Goldman Sachs. The company has achieved the removal of restrictions on the strict regulation of commodity futures. Later, other companies - operators of the futures market - received such permits.
And then forecasts began to sound periodically. Goldman Sachs spoke about the rise in oil prices. So, in 2006, one of the specialists of the company spread the opinion that the blame for increasing the value of "black gold" could be the love of Americans for SUVs.
Such forecasts were made by Goldman Sachs in order to ensure a real invasion of the oil field. Within five years (from 2003 to 2008), the volume of this market has grown almost 24 times. In 2006, the turnover of one barrel was 27 times. Only after that oil reached the final consumer.
Almost seventy-five percent of the total number of futures was controlled by speculators. If we translate this figure into a commercial expression, it would be almost a billion barrels. And it far exceeded all federal and commercial strategic reserves of America.
Who bought all these contracts from the bank? Yes, the same pension funds and insurers who have already burned themselves once on mortgage loans.
Initially, the exchange rate soared rapidly. July 11, 2008 a barrel began to cost 147 dollars. After the collapse followed. In December, for the same barrel they gave only $ 36. Among the victims were small investors, which became pensioners and clients of investment funds. But all these negative consequences have affected not only direct, but also mediated players of the stock market. Almost a hundred million people living in third world countries were on the verge of starvation due to rising food prices associated with the rising cost of “black gold”.
The internal structure of the bank
To date, "Goldman Sachs" - Rockefeller in the financial sector. Its market capitalization is estimated at $ 89 billion.
The Bank has three key divisions that operate in the areas of investment banking, trading on the stock exchange, and also manage securities and assets. The activities of the first of them brought the most popular company.However, the largest of the three segments is a unit for trading on the exchange.
Activity in Russia
Goldman Sachs LLC opened its branch in our country. It happened in 2006. What does the company do? Goldman Sachs LLC is a bank that:
- manages securities;
- advises on business issues;
- carries out exchange operations with stock valuables;
- manages holding companies;
- leads depository activities;
- provides industrial loans;
- carries out financial intermediation.
Why came to us "Goldman Sachs"? Russia gladly accepted this largest investment bank. The decision to open its branch in the Russian Federation was the idea of domestic regulators of the stock market. Authorities need firms like Goldman Sachs. Moscow fears that otherwise the majority of Russian issuers will move to London or even far away.
Today, the largest US financial institution is the most advanced in the world. And having a branch in your own country is quite prestigious. However, this is not the first arrival to us of the Goldman Sachs company.Russia took this bank back in the 90s of the last century. However, in 1998, his activities were curtailed due to the outbreak of the crisis.
According to experts, the work on the territory of Russia of the largest world bank speaks of the maturity and formation of the domestic financial market.
Recommendations to investors
Bank specialists constantly analyze the current financial situation in the world. Interesting forecast "Goldman Sachs" ruble. This famous American investment bank recommended that potential investors invest Russian currency in the Mexican peso. According to experts, these monetary units should certainly strengthen.
Investment bank analysts believe that investing in the currency of such a booming country like Russia is a very profitable event. This is due to their predictions in stabilizing the country's economy.
Work in a bank engaged in investment activity attracts not only men, but also women. Goldman Sachs pays great attention to its personnel. At the same time, the company tries to create equal conditions for employees of both sexes.
What are the vacancies offered by Goldman Sachs (Moscow)? In his office, opened in the Russian capital, there are all divisions of this financial institution. That is why working at Goldman Sachs is a great choice for starting a financial career. New employees are recruited into:
- analytical management;
- investment banking division;
- Department for the sale of securities and other financial instruments;
- financial and operational division;
- A special research department;
- compliance management;
- Department for work with staff.
All activities of the bank are aimed at realizing the interests of employees. For example, any of them has the right to change the professional occupation of their activity, to start working in another department within the borders of their region or even in another country. To do this, just find an open job. Their list is on the internal sites of the company Goldman Sachs. Jobs are allowed to take only those who showed excellent results in the performance of their duties.
Interestingly, the company organizes six-week trainings in New York. They are visited by analysts working in the firm for the first year. The main issues of training are the most functional things. Their list includes finance and their modeling, as well as the acquisition of analytical skills.
The company also conducts various types of internships. This spring, summer and other training, which has a different duration. Anyone who has come to work at Golden Sachs should remember that he will not have to transfer papers from one place to another. Becoming an employee of the company, a person begins to run his own business, carrying for him a certain share of responsibility.
As a rule, interns begin to carry out their first transactions within one to three months. This is the normal practice of the company. How quickly a person will be entrusted with his business will depend only on him.
However, it is worth remembering that, according to statistics, work in the Goldman Sax is provided only to three to four percent of a large number of those who came to take a vacancy. In order to become an employee of this largest bank, it is not enough to be considered the best at the university, on the course or at work at the previous bank.Every year in one of the largest investment institutions from applicants for vacant positions receives more than a dozen of thousands of resumes. That is why the company makes the strictest selection, which, above all, is carried out among graduates of financial universities. But if you managed to get an interview, then you will need to seriously prepare for it. This will allow the company to prove that it needs you.
First of all, the candidate will need to complete an online application form. Only after that he is waiting for two stages of the interview and testing. Usually, it takes about three to four days.
Preparing for an interview includes a pre-written story about yourself. It should reflect the study, projects, scientific activities and other activities. Also, a candidate for a vacant position should be aware of the latest market news. A positive assessment will also be given if there is knowledge of stock market changes, awareness of events at the micro level and global financial processes. Of course, you need to be aware of stock quotes, which takes place on the day of the interview.The main purpose of such a conversation lies in the understanding of whether you can settle down in a team, and whether you have a sufficient level of motivation to work according to the highest standards of the company.