Mortgages Uncovered

Goldman Sachs the major U.S. Wall Street bank has completely slumped into the red and for the first time since the bank floated and went public nine years previously, its efforts in attempting to dodge the credit crunch have failed.

The bank has revealed a loss of $2.12 billion (£1.38 billion) in mid December.

CEO Lloyd Blankfein said

“Our results for the fourth quarter reflect extraordinarily difficult operating conditions, including a sharp decline in values across virtually every asset class,”

Lloyd Blankfein has also agreed to give up his bonus alongside six other senior executives.

Along with its rival Morgan Stanley, Goldman Sachs just recently converted itself from a stand- alone investment bank into a financial holding company which still allowed it to take deposits from the general public.

Market Strategist, Steve Goldman claimed:

“Investors have been anticipating the worst. It was weaker than expected, but maybe that has to do with how they’re marking it.”

In its recent research note Peter Nerby the Moody’s market analyst said:

“This crisis has demonstrated that the business model of wholesale investment banks is not as resilient as it appeared.”

The staff at Goldman Sachs are also feeling the squeeze as the amount that the bank has spent on compensation claims and benefits has dropped 46% to $10.9 billion over 12 months.

Some people who were looking for insurance from them to secure mortgage repayments should they be ill or redundant may have to think again.

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