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Goldman Sachs Launches GS Bank, An Internet Bank With A $1 Minimum Deposit (techcrunch.com)
An anonymous reader recaps a report from TechCrunch: Traditionally, Goldman Sachs has functioned like a run-of-the-mill investment bank with minimums to open an account in the range of $10 million, and returns not guaranteed. Goldman is opening its doors to the masses today with the launch of GS Bank, an FDIC-insured, internet-based savings bank. Anyone with an internet connection and a dollar can join, as that is what each account's minimum balance must be. GS Bank's interest rates give customers an annual yield of 1.05 percent, a rate that trumps the average U.S. saving's bank yield of .06 percent APY. GS Bank was a result of Goldman's acquisition of GE Capital Bank, the online retail bank previously run by General Electric's capital arm. The move is to diversify revenue streams and strengthen liquidity. GS Bank currently has total deposits of around $114 billion. In other news from the multinational banking firm, Goldman Sachs believes virtual-reality and augmented-reality "will be the next generation computing platform" worth $80 billion by 2025.
I moved my money out before the account got transferred from GE Capital to Goldman Sachs. I'm not sure if I will return the money to this account. I don't like my savings being used by the same corporation that was responsible for the Great Recession.
You think GS is bad. Here is my experience with a Delaware-based escrow company.
Before I start, the main function of an Escrow company is to hold the money and pay it out to the correct people and only at the appropriate time.
1. Money is in escrow. Intended to be held for some time with some conditions on release.
2. One of the conditions on release of money puts payment in jeopardy.
3. Escrow company sends one of the parties their share BEFORE the money should be sent to anyone and before the issue from step 2 is resolved.
4. Escrow company sues the recipient (who is in India with no US connections) in US courts. Obtains a meaningless default judgement.
5. Escrow company deducts the cost of obtaining the meaningless judgement from the amount to be shared amongst the rest of the escrow participants.
6. One of the participants successfully sues the escrow company to force it to eat the legal bill (and any excess money sent in error in step 3.) itself.
7. Escrow company adds its legal costs defending 6. to the amount deducted from the other participants (except for the one who sued).
8. Other participants sue the escrow company to get it to eat all its legal costs and any excess sent in error to the one participant in step 3. Suit is successful and eventually, the Escrow company has to agree to not deduct any legal costs and make up any excess money sent in step 3.
In summary, escrow company screwed up, tried to pass the costs onto the very people it should have protected and had to be sued twice to get it to eat the costs of its own mistakes.
The real "Libtards" are the Libertarians!
Goldman didn't look good in the movie the Big Short.
MIchael Burry, the fund manager who "discovered" how bad mortgage backed bonds were due to poor lending practices, bought hedges against these bonds from Goldman to the tune of at least a hundred million dollars. They thought he was an idiot and sold them willingly.
Yet when the default rate skyrocketed and should have made the hedges he bought greatly increase in value they kept acting like the hedges hadn't increased in value, basically ignoring the defaults in the bonds. I don't know what their actual role was but the movie portrayed them as acting extremely dishonestly. Maybe they were just going along with the systemic dishonesty of the larger bond market. Maybe they were desperately working to unload their own holdings in order to not get taken to the cleaners by Burry.
And I think they were accused of basically double-dipping -- selling mortgage backed securities in the front of the house while shorting them in their own profile. That's like an oncologist selling chemotherapy to the public while investing in hospice care personally.