mounting a $10 million profit turning goldman sachs and seers into a household name. during the next 11 years old men and lehman -- goldman and even brothers were companies but what would excite them most was the studebaker which rican the first automobile manufacturer owned by the public with the overline bankers became the hot issues everybody wanted between the two brothers in lot to deteriorate and to spread amongst their families they came to a head in 1914 when war broke out in europe said the these horror sabbatical a pro ally although henry who had admired the culture thought otherwise and spoke vehemently against the british and french who he felt which he felt to maintain net commercial supremacy in hearing the bylaws goldman sachs refrained from purchase abating is in the anglo-french bond drive one of only two wall street houses to do so. the other was -- castigating the firm it became up pariah in england when a london press quoted henry's remarks and warned goldman sachs was in danger of being blacklisted, henry realized he was not just voicing his person

and then they began to applaud every trace of him from goldman sachs' records. almost 100 years had passed when i try to interview members of the sex family for this book. some profess they didn't know they were related to the goldman's. others retreated to a newly adopted mantle of protestantism, rejecting their roots in judaism along with their family tree. one great grand niece living -- such ill will against henry said she kept a scrapbook full of newspaper clippings chronicling tape it's at this daily life from the over-the-top wages he paid his domestics to the amount he paid for the god he gave albert einstein on his 50th birthday. she also referred to a sighting of henry marching in a pro-german parade at the beginning of world war i which he was unable to substantiate. in actuality henry was surprisingly believed to be released from the pandora's box that the office and spend his time on other interests dear to his heart. he began to indulge a long-held passion for assembling what was arguably one of the finest small collections of renaissance and early

. -- goldman sachs. ten years had passed since his father, marcus, had shunted him aside after he dropped out of harvard due to failing eyesight and hired his sister's husband as his father. marcus' father was the second marriage which had taken place between sons and daughters of the two families. henry had undoubtedly anticipated that if anyone were to be offered the job, it would be he. hurt and disappointed, he decided to accept an offer to join a soft good firm as a salesman. as it turned out, the experience provided him with an education far beyond what he might have attained at harvard. for the first time, since he was a traveling salesman, he was able to see the mom and pop tores, the small town banks and perhaps even then to visualize a financial structure that would transform them into the building blocks of the economy. a year and a half later marcus goldman had personally accrued over $100,000 in the capital and was turning over 30 million a year. he was so overloaded with work and so leaded

it had originally been funded at goldman sachs commercial paper and now they came back to goldman for a 5 million-dollar loan. but henry had different ideas. he recommended selling sears on the open market, making it the first publicly owned retail operation in existence. again doubling the firm's investment netting a 10 million-dollar profit and turning goldman sachs in sears into household names. during the next 11 years goldman and lehman underwrote a number of great companies but the one which excited henry the most witchy they would be a landmark in the firm's drive to the top with studebaker which became the first automobile manufacture owned by the public. even his contentious partner was impressed by that one. as the firm's fortune ascended and all the things the old-line bankers had pooh-poohed became the hot issues everyone wanted to get in on, the personal animosities between the two brothers in law continued to deteriorate and to spread amongst their families. they came to a head in 1914 when war broke out in europe. sam's was brought -- grow l.a. but henry who admired the

is been pretty much goldman sachs but i must say. any investors who are upset because they couldn't get into the i.p.o. should count their blessings you know they were done a favor do is just run a numbers an i.p.o. and it was outrageously priced let's talk about those numbers are talking about a fifty billion dollars valuation how do they get to that number and why is it overvalued it's hard to tell how they got to that number because there's no disclosure at least to the level of a public company because facebook is a private company but the numbers that was floating around for revenue is about two billion dollars if you use our operating margin. comparables who facebook's potential peer group that means they're putting in roughly half in profits they give them an outrageous price earnings in a few surprise or earnings growth ratio. facebook would have to register effectively the entire world the entire population of computer using individuals to justify their favorite today for discounted back to the present. that is. effectively

why is goldman sachs, a wall street investment firm, doing this? and it is as much a financial investment for them as it is an opportunity to get on the ground floor of a possible facebook ipo in the future. this is a private sale early. it's an opportunity for them to give their high net worth clients access to these coveted shares. so there's all sorts of fee streams throughout that will make this deal perhaps profitable for goldman sachs even if facebook ultimately sn as profitable as people think. >> suarez: when i saw th story this morning, your story, i logged on facebook. and the first three items in my cue were my kid brother's new short haircut, a picture of my son at a college convention, and a journalist friend shooting me a copy of your story. i thought, well, how do you monetize that kind of person-to- person contact? i can see some value in it. but i don't know if i was making anybody any money. >> i'll tell you what's happening, ray, which is on the side, on the corner of your web screen on facebook just like on google, there are ads

the number is pious guy again it's probable but if i was a high net worth client of goldman sachs would i put my two to five million dollars in it absolutely not tell us about the state of foreclosure crisis you're right that the banks are now walking away from the foreclosures what's going on there reggie. starting on the fringes with low of a properties but there are cases in chicago where banks are actually. banding properties properties i warned of this last year and when i did one of it a lot of. so-called experts were putting the idea of basically saying that there is no. is a very slim chance of economic situation where a bank would turn down any recovery that's assuming that there is a recovery to turn down there are several situations where the bait simply comes out in the negative if they took to go after the property. i don't know if it's that simple because the bay could potentially still be on the hook with the municipality for back taxes fines etc but as it is starting on the fringes and i believe it's going to work its way up towards the core and the mainstream of loans i

and i want to know why it is you're starting with goldman sachs and why just twelve point nine billion dollars why not go for all of that because we've got to start somewhere and i want to see. very specific right because we know this twelve point nine billion dollars was a side bet and we know they should they got paid on it and they said they didn't need it ok and they had rigged to explode so it's the perfect place to start now what i love the whole whole hundred eighty two billion dollars back absolutely what i love to do some protests are goldman yes but this is a good place to start because tim geithner and hank paulson and ben bernanke they were the ones who made the decision to give the money away in the first place you think they're going to listen. not not today but one day yes one day i believe i believe ok now i got to ask you this because you know the idea that signing that could bring down the economy seems always so simple but is it really that simple anything that's a really hot fire. in combination with the root cause absolutely the root cause was the the trigg

this psychological profile of jamie dimon lloyd blankfein goldman sachs j.p. morgan this guy daily is that of the arsonist the arsonist likes to burn things down their pyromaniacs here on wall street you've got debt maniacs they like to destroy things with debt and they like the price of debt to be as cheap as a pack of matches. if the price of dead is as cheap as a pack of matches as it is now they can continue to burn things down to destroy the economy like they are doing at this very moment and what is the obama administration doing they are giving the pyromaniacs and the arsonists more starting fluid more lighter fluid more matches whatever they need to destroy the economy so you have to ask a question is obama in the pocket of the financial terrorist yes he says no no i mean get it through your thick skull it's a clip talk or see he's just part of the kleptocracy who you talk about arsonists here's a headline from the u.k. the other half of or the other pretty ten percent of the global financial terrorist class bankers will take bonuses because they weren

but goldman sachs said one of the law doesn't apply to us you know the laws for the small people we don't we don't we don't you know if the law is something that gets in the way of us raping people we just change the law i mean they don't they're above the law member blankfein said he's doing god's work so god doesn't obey the law another point is made by simon johnson who in a piece called why are taxpayers subsidizing facebook and the next bubble he says that goldman sachs remember it was made by hank paulson into a bank holding company so they're able to borrow at the fed from the fed at zero percent and yet they're engaged obviously in very risky investments as if they are hedge fund own oil exactly under the volcker rule remember the whole point was to shut down the proprietary trading desk because they're taking huge short term risks that were under written by the u.s. public who had to bail them out so the bypass that volcker rule restriction they've gotten into the pre i.p.o. market which doesn't even exist they invented it on the spot there's no even regulations that cover it and

bankers like goldman sachs and j.p. morgan will always pay zero percent these people on the bottom who are suffering the inflation will continue to pay sixteen percent twenty percent eighty percent more every single month every single quarter for their rent and mortgage slowly and we also see you know inflation and this sovereign debt issue in the final headline here max jeff rubin peak oil means massive sovereign defaults so this is jeff rubin and he's a legendary oil analyst apparently and he says that it takes huge amounts of energy particularly oil to achieve the growth rates at all the near bankrupt governments around the world need to even service their debt let her own repay it so the minute global industrial production recovered from the recession or oil prices were suddenly on the verge of triple digits that's not an accident since the two go hand in hand global oil demand is up two point five million barrels per day from last year and a further increases in oil demand and oil prices will be trading comfortably

and dead dogs that they stuff into a concoction of some sort of securitized product yet won't goldman sachs collateralized debt obligation most of it is cat extreme it and dogs this is what they're finding the federal reserve bank's balance sheet in washington the reason why they're afraid of doing all of it at the request of ron paul is because they know that they've got basically dead beatles eye of newt some old chicken bones some dead cat excrement that's about all they got of the federal reserve because the us is technically. grow up and solve so these witches are fighting fire with fire yeah they're fighting with dog poop. so you mention the collateralized debt obligations backed by the subprime mortgages in the us. here's a headline for you foreclosures may be undone by state ruling on mortgage transfer this sounds like good news doesn't it this is the massachusetts highest court is poised to rule on whether foreclosures in the state should be undone because of the securitization industry practices at issue is whether a mortgage can be transferred without naming the reception and whi

facebook tale goldman sachs violated securities laws by over. over over shares relative to the state laws and financial times simply said well there's nothing magical about that number well that's all i guess there's nothing magical about the whole concept of rule of law either now you say that the response to the financial crisis is a crisis of democracy what it was i mean exactly what it means to me is i don't know how it was in the states but here when the crisis got going properly say two thousand and eight there was never a moment when there was an open debate when people said well what are the possible responses to this should we be bailing out insolvent banks is it really a liquidity crisis or is it in fact a crisis of solve it see there was no debate we simply had a long chorus of one expert politician aided and abetted by a supine press all saying exactly the same thing there's no way it will turn it if it's a crisis of liquidity we must bail out the banks and there was no discussion no point . was a discussion opened the people could h

now we have to ask if goldman sachs and facebook are making a mockery of the securities and exchange commission that's a many are arguing after news broke that goldman sachs has set up a special purpose vehicle to allow their wealthy clients to invest in facebook now as part of the deal goldman sachs a reportedly invest four hundred fifty million dollars in facebook digital sky will invest fifty million and goldman is expecting to raise as much as one point five billion with a b. from investors this is despite the fact that facebook is not a publicly traded company and that's why the trick comes that you see the f.c.c. requires companies with more than four hundred ninety nine investors to disclose their financial results to the public but because goldman is managing those investments they would be considered just one single investor even though they could be pulling the investments from thousands of clients clients to our goldman facebook having their cake and eating it too well joining me from our studio in new york to discuss it is joe wise involved deputy editor of business insid

goldman sachs reports a big drop in profit. that will not stop it from paying out billions in bonuses. in the midst of a carefully choreographed visit, the unpredictability of a press conference has turned up a surprising admission from the chinese president. standing alongside president obama, he then acknowledged that a lot still needs to be done for human rights in his country. mr. obama said china had come a long way on the issue but he would continue to be candid. they spoke about trade and currency. adam brooks reports. >> to presidents. together they preside over a quarter of the world's population, one-third of its economy. they differ profoundly in their philosophies but they covet each other's wealth and markets. >> we have an enormous stake in each other's success. in an interconnected world, in a global economy, nations, including our own will be more prosperous and more secure when we work together. >> they need each other, but do they trust each other? they spent the morning in talks. mr. obama told mr. hu that th

but on the trading floor at goldman sachs, i was -- i slammed phones and was egocentric. still wasn't a role model. so, we evolve. >> reporter: gordon has long wanted to atone for the sins of wall street. to share the secrets that no one seems to want to tell the little guy. the guy who is just trying to build that nest egg, to have enough money to pay the kid's college education and maybe retirement. so, where did wall street go wrong? >> wall street went wrong -- i think there's a confluence of things. but in the late '70s, illegal an unethical were the same. your word was your bond. the client comes first. those expressions started to be replaced, as you know, by liars and loans. we can hide debt. >> reporter: greed is good. >> greed is good. >> reporter: when we met him last night, gordon was living on borrowed time. this might be your last interview on camera. raises the takes. >> so you better be kind to me. >> reporter: i will do my best. >> reporter: six months ago, his doctors diagnosed him with a malignant brain tumor. gordon's second. he decided to forego any t

goldman sachs led the way. fourth quarter profits were a little more than half what they were a year ago. investment banking and trading revenue fell. looking closer, goldman saw fixed-income, currency and commodity trading revenues plunge 48%. marketing making revenues were down 43%. market making is when goldman trades on behalf of its clients. principal transactions, or when goldman was trading its own money, those revenues were up 50% in the fourth quarter last year. goldman sachs stock shed almost 5%. volume was three times its normal pace. after the drop from its april high, down to the july low, shares have been trending higher since july. tonight it is at a one-month low. wells fargo stock also was hit by selling, losing 2%. it also saw a pop in volume. last week, it was making a run after its springtime highs. wasn't able to make it. earnings came in as expected. its mortgage business was up, but new banking rules limiting fees cut into revenues. still, profits and revenue hit new records thanks to the

the report blames goldman sachs for fueling the mortgage bubble. mayoral lynch for not telling investigators about the state of its financial condition. the report says the fed committed a pivotal failure to stem the flow of toxic mortgages and it could have rained in am of the money centered banks. they have not commented. and the reaction from the white house? >> the president put so much effort in to wall street reform to insure again that what happened leading up to and during that crisis never repeats itself. >> reporter: this commission was modeled on the board set up to look into the 9/11 attacks but this report was not endorsed by all of its members. republicans issued an opinion saying the attacks were not warranted. >>> egypt is cracking down an protests. internet service disrupted. protesters want the president ousted. former white house chief of staff rahm emanuel is back on the balfor the candidate for mayor of chicago. he does meet the residency requirements. he lived in washington for two years as white house chief of staff before mo

a year ago two years ago when goldman sachs was advising clients to get out of greece knowing that they had sold them the credit default swaps to hide all their bad debts now j.p. morgan is the number one player in the whole municipal bond market so they would know how much dodgy collateralized debt swaps and all sorts of crazy stuff isn't there and the defense both goldman sachs and j.p. morgan is is they say we're making a market. which is a whack a mole defense because you can say anything is making a market it's completely vague to say we're making a market or supplying liquidity this is another thing you'll hear lloyd blankfein or jamie diamond say both of those reasons are made up concoctions that they pull out of their nether regions that mean nothing and anyone prosecuting these guys should hold them accountable for basically making a goal to go and looking and committing acts of financial terrorism. and we've also mentioned the shooting rampage in arizona and week or two ago. here's a headline in response to that this is a very american story firearm finance american gun indust

this psychological profile of jamie diamond lloyd blankfein goldman sachs j.p. morgan this guy bailey is that of the arsonist the arsonist likes to burn things down there pyromaniacs here on wall street you have got debt maniacs they like to destroy things with debt and they like the price of debt to be as cheap as a pack of matches. if the price of dead is a cheap as a pack of matches as it is now they can continue to burn things down to destroy the economy like they're doing at this very moment and what is the obama administration doing they are giving the pyromaniacs and the arsonist more starting fluid more lighter fluid more matches whatever they need to destroy the economy so you have to ask the question is obama in the pocket of the financial terrorist yes he says. it's been described as israel's big is a huge facility where it's claimed phone calls and e-mails from who cross the middle east and beyond to me monitored for intelligence where hidden from the prying eyes for decades in the desert it's become a focus for investigative journalists. has more on