The Company
Goldman Sachs is one of the oldest and largest financial intermediaries and brokerage firms in the United States. Goldman Sachs began in 1869 as the sole enterprise of Bavarian immigrant Marcus Goldman who would buy promissory notes from New York City merchants at a discount, giving them the cash needed to operate their businesses, and then sell those notes to commercial banks for a small profit or “spread.” After thirteen years as a one-man show in the mercantile paper trade, in 1882 he took on as partner Samuel Sachs, the husband of his oldest daughter (Ellis, 2008). The firm’s partnership structure lasted 117 years until 1999 when Goldman Sachs sold equity shares in an initial public offering. Today it trades under the ticker “GS” and as of December 10, 2010 had an equity market value of $86 billion and over 35,000 employees worldwide.
As written in its 2009 annual form 10-K, Goldman Sachs is a:
“global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high-net-worth individuals”.
(Goldman Sachs Form 10-K, 2009)
Goldman’s three primary business segments are investment banking, asset management, and trading and principal investments. Investment banking involves capital raising, merger and acquisition advisory, and valuation assignments from which Goldman receives fee and underwriting income.
Asset management (often used interchangeably with the term wealth management) involves the managing and investing of financial assets of large institutions like pension funds and corporations as well as high net-worth individuals. Goldman’s la...
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...uses on the level of tolerance for uncertainty and ambiguity within the society. A High Uncertainty Avoidance ranking indicates the country has a low tolerance for uncertainty and ambiguity. This creates a rule-oriented society that institutes laws, rules, regulations, and controls in order to reduce the amount of uncertainty. A Low Uncertainty Avoidance ranking indicates the country has less concern about ambiguity and uncertainty and has more tolerance for a diversity of opinions. This is reflected in a society that is less rule-oriented, more readily accepts change, and takes more and greater risks.
Long-Term Orientation (LTO) (formerly called "Confucian dynamism") focuses on the degree the society embraces, or does not embrace, long-term devotion to traditional values.
http://www.goldmansachs.com/investor-relations/financials/archived/10k/docs/2009-10-k-doc.pdf
JPMorgan Chase & Co. is one of the world’s largest and well-known financial institutions. The firm was founded in New York in 1799. JPMorgan Chase & Co. was built on the foundation of past institutions that have come together throughout the years to form the firm that JPMorgan Chase & Co. is today. JPMorgan Chase & Co. is a global financial service firm with operations in more than 50 countries. The firm is a leader in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management, and private equity. JPMorgan Chase & Co. serves millions of consumers in the United States and many corporate institutions.
Weiner, Eric J. “What Goes Up: The Uncensored History of Modern Wall Street as Told by the Bankers, Brokers, CEOs, and Scoundrels who Made it Happen”. Little, Brown and Company. pp. 188–192. Print.
Uncertainty avoidance describes cultural behavior which depends on a set of rules to determine or guide cultural behavior. Within this group, individuals within this culture feel ”threatened by uncertainty and ambiguity and try to avoid these situations (Hofstede, 1991: 113).”
Figure 1 demonstrates the position of the countries in the Conservatism Index versus Intellectual Autonomy Index scale. In the light of this dimension results demonstrated that Spain and Germany have the weakest Conservatism Index (3.42) where Bulgaria has the strongest (4.43). However, Bulgaria has the weakest Intellectual Autonomy Index (3.78) where Spain has the strongest (4.90).
Investopedia.com - Investopedia.com - Investopedia N.p., n.d. Web. The Web. The Web. 28 Mar.
The Goldman Sachs Inc is a Wall Street’s titan that was able to survive during a financial crisis as a result of deceiving its clients. During the financial crisis it was charged for deceiving its clients for having sold to them mortgage securities that had been designed secretly by John Paulson’s hedge-fund firm. After designing the securities John made a killing betting for the collapse of the housing market. But Goldman denied the securities and Drexel Burnham who was carrying out investigations succumbed as a result of criminal insider trading. Due to that the charges the firm was to undergo were unfounded and Goldman fought to defend its reputation. Civil charges against Goldman and Fabrice Tourre which was one of Goldman’s star traders marked one of the major attacks that the government made on Wall Street. According to Roben & Paula (2010) the deals that the company had made are believed to have caused the financial crisis that was experienced by the nation as well as the whole world.
Citigroup ' was founded as City Bank of New York in 1812 and remained a large regional bank until October 1998. Sandy Weill, then CEO of The Travelers Group an insurance company announced a $76 billion agreement to merge with Citigroup to form a new financial services conglomerate. It took only two years for the merger to pass federal law since the 1933 Glass-Steagall Act prevented banking and insurance companies from ever becoming one entity. As the new CEO of Citigroup, Sandy Weill was now at the helm of one of largest banking institutions in the world with over 300,000 employees and operations in over 120 countries. Popular brand names included CitiCards, CitiFinancial, CitiMortgage, Primerica, Salomon Brothers, Smith Barney, Diners Club and CitiCapital. Citigroup became the world’s first global financial supermarket where banking, brokerage and insurance were all held under the control of one organization. Citigroup is organized into four major segments; Consumer Banking, Global Cards, Institutional Client Group, and Global Wealth Management. Citigroup offers a wide range of products from retail banking, credit card services, and mortgage loans to global transaction services, M&A financing, and corporate lending. Citigroup is currently the largest bank in the United States with over US$600 billion in deposits and assets under management of over US$1.2 trillion.
The history of Lehman Brothers (LBs) is dated back to 1844 when Henry Lehman and his two brothers established a small shop in Alabama (United States) to sell groceries and other commodities (Geisst, 2001). In the early 1900’s, they formed to a greater business company trading on the New York exchange market and the Cotton Exchange, which successfully promoted the family business to the retail giants with a partnership with Goldman and Sachs (Geisst, 2001; Wechsberg, 1966). Subsequently, the further opportunity raised in collaboration with some firms in the railway industry such as the Baltimore and Ohio railways, Chicago railways and others (Harward Business School, 2012). In 1975, the company achieved its success when it became the 4th largest investment bank in the US by merging with Kuhn, Loeb and Company, which boosted their financial activities in the financial market (Sloane, 1977). In the new line of business by diversifying their operations from a small shop via investments in the industry sectors, eventually they transformed to the company operating in the banking and brokerage (Geisst, 2001). Although LBs experienced remarkable successes and achievements, the housing market bubble in USA led to their collapse causing that in September 2008 the company filed for chapter 11 bankruptcy petitions that triggered a negative flow of consequences (Caplan et al., 2010).
“Corporate executives and business owners need to realize that there can be no compromise when it comes to ethics, and there are no easy shortcuts to success. Ethics need to be carefully sown into the fabric of their companies” (Vivek Wadhwa). Therefore, if Merrill Lynch had not forgotten their ethics the lawsuits would not have been so detrimental to their brand. Charles Merrill, who was a native of Florida, embarked on a journey that would lead him on his way to New York; he had the precognition to separate much of his holdings before the 1929 crash. Similar consideration would have served the firm well during the era of collateral securities in the early 2000s. So on January 6, 1914, Charles Merrill launched his brokerage firm as a one-man
The following essay will expand on the usefulness and flaws of CAPM and other asset evaluation frameworks and in the end showing that despite all the evidence against CAPM it is still a useful model for determining asset investments.
In 1882, Samuel Sachs, Goldman’s son-in-law, joined the company. Henry Goldman and Ludwig Derfuss later joined the business, which later made the company adapt the well-known name, Goldman Sachs & Co. According to William Cohan 2012, Money and power: How Goldman Sachs Came to rule the world, The Niche the company found in selling commercial paper for entrepreneurs, contributed to the firm being invited to join the NYSE and its revenue of $1.6 million in 1896.Even though it was still considered a small firm, Goldman Sachs branched out into handling debts and currencies overseas. William Cohan goes on to state that because Henry Goldman’s had a relationship with the owner of Sears, Julius Rosenwald, it made the deal possible, and the interests of other companies such as, Roebuck and company, F.W. Woolworth and Continental Can, contributed to Goldman Sachs entrance into the (IPO) initial public offering market in 1906. With the company now being led by the Sachs family. Goldman Sachs changed its focus and began to expend and recruit in other areas. The company started a Trading Corp operation, which failed one year later due to the 1929 stock market crash. This hurt the firm’s reputation for years to come because of accusations of shares manipulation and insider trading according to William Cohan
Barclays group PLC is one of the largest financial providers in America, Europe, Asia, Australia, Africa and Middle East. , It which is mainly engaged deals with credit cards, retail banking, investment banking, corporate banking, and wealth management. The bank is made up of investment and corporate banking, global retail banking and wealth management, each of which has several business units (Burn, Cartwright &Maudsley, 2009).
The NYSE traces its origins to an agreement signed between twenty-four prominent New York bankers on Wall Street in 1792. This agreement was called the Buttonwood Agreement and to this day “Buttonwood” is a buzzword for American finance. In 1817, the New York Stock and Exchange Board (NYS&EB) was created, changing its name in 1863 to the NYSE. During the 1800s, securities traded by the NYS&EB / NYSE financed prominent investment projects such as the Erie C...
Wealth management staff includes financial advisors that will help the client to improve their financial position by giving advice/suggestions. Furthermore, financial advisors also help the client in investing assets that will be able to generate high returns. While private banking can guide the client to some possible investment options. However, not all banks involved in helping the client to invest their assets. Those high net worth individuals that use private banking normally open a deposit account or
I am currently majoring in Finance Management. Most of the time people think of finance as just managing money. However, finance is needed for so much more! The finance industry deals with starting businesses, developing new products, expanding markets, as well as everyday things like saving for retirement, purchasing a home, and even insurance. The stock market, asset allocation, portfolio analysis, and electronic commerce are all key aspects in finance. In this paper, I will explain how these features play a vital role in the industry, along with the issues that come with these factors.