Goldman Sachs is this week preparing to tap shareholders for as much as US$6 billion to repay the US$10 billion it was given by the US government as part of the Treasury Department’s US$700 billion bailout scheme.
A source close to Goldman Sachs said that details of the cash call would most likely come after the banking group reveals its first quarter earnings in New York today, which are expected to be strong.
The precise value of the cash call has not yet been decided, but it is understood to be considering raising about US$6 billion.
Goldman insiders insist that the bank never wanted to accept the government’s handout under the Troubled Asset Relief Program (TARP), but had no choice as the Treasury wanted to keep an even playing field among surviving banks.
The TARP payments were made to improve confidence in the banking system in the wake of the collapse of Bear Sterns and Lehman Brothers. While Goldman is in possession of the government funds, it must abide by strict regulations on executive pay and certain operations imposed by the US Treasury, the Federal Reserve and other regulators.
Elizabeth Warren, a Harvard Law professor charged with overseeing the TARP on behalf of the US Congress said in an interview with the Observer last week that she strongly believed the banking system would not recover fully until the management of all banks receiving help were replaced and shareholders were “wiped out.”
Once the TARP cash is paid back Goldman executives will be free to enjoy the big paydays of old.
But Goldman, like all its counterparts with TARP funds in their coffers, is forbidden from paying back the government until they have undergone a top secret “stress test” designed by the US Treasury. Goldman is forbidden from talking about the test, but it is expected to be completed by the end of this month or the first week of next month.
Goldman has also reportedly raised US$5.5 billion in investor commitments to buy private-equity investments at a discount on the secondary market.
The new Goldman fund, GS Vintage Fund V, is the largest secondary fund ever raised, the Wall Street Journal and the Financial Times said in their online editions on Sunday.
The fund hopes to benefit from the trouble bigger banks and other institutional investors are having in recovering some of the money they placed in private-equity businesses.
Sales of such interests are occurring at deeply discounted prices of 50 percent to 70 percent or more from face value, private-equity executives say.
JPMorgan Chase is also considering raising investor commitments for its own secondary fund, the Financial Times said.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
LANDSLIDES POSSIBLE: The agency advised the public to avoid visiting mountainous regions due to more expected aftershocks and rainfall from a series of weather fronts A series of earthquakes over the past few days were likely aftershocks of the April 3 earthquake in Hualien County, with further aftershocks to be expected for up to a year, the Central Weather Administration (CWA) said yesterday. Based on the nation’s experience after the quake on Sept. 21, 1999, more aftershocks are possible over the next six months to a year, the agency said. A total of 103 earthquakes of magnitude 4 on the local magnitude scale or higher hit Hualien County from 5:08pm on Monday to 10:27am yesterday, with 27 of them exceeding magnitude 5. They included two, of magnitude
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique