Goldman To Lose Their Sachs?

Another Goldman Perk: Sex Changes
Fortune Magazine, February 8, 2008

Fortune Magazine: Unusual Perks

Goldman Sachs bankers and traders enjoy famously big bonuses and, this year, a little extra job security thanks to their firm's ability to steer clear of the worst effects of the subprime mortgage debacle.

Now, they can add something else to the list of reasons why life is great at Goldman: free sex-change surgery.

Fortune.com reported Friday that Goldman added coverage of sex-reassignment surgery to its medical plan last year. The article was part of a sidebar on “unusual perks” that came with Fortune's latest ranking of the 100 best companies to work for in the United States. (Goldman was No. 9, up significantly from No. 36 last year.)

Goldman employees can undergo the procedure, which normally costs anywhere from $5,000 to $150,000, and have it paid for entirely by their medical insurance.

Goldman isn't the first financial firm to cover sex-change surgery for its workers. A recent survey of more than 1,000 employers conducted by the Human Rights Campaign found that many banks, law firms and other large companies have added at least partial coverage of transgender treatments to their medical plans.

Bank of America, Wachovia and Deutsche Bank are among the firms who now cover such treatments to some extent, Fortune.com said. Goldman and Bank of America will cover the cost of the actual operation. At Wachovia, sex reassignment surgery is considered elective, and so the operation is not covered but related prescriptions and post-operative counseling are.

Goldman's enhanced medical coverage is part of the firm's efforts to “recruit and retain a more diverse workforce,” a Goldman spokesperson told Fortune.

The expanded coverage may cost employers a bit more in the short term, but it's a small price to pay to attract and keep top talent, Pauline Park, chair of the New York Association for Gender Rights Advocacy, told Fortune. “[A]ny employer that does not clearly include gender identity in their employment policies may send a signal that they're not supportive,” she said.

SP500 Bear Market Update

Continuing the comparison of the 2000-2003 bear market with
the recent decline from the October 2007 market top.

We are at key support.


















The next step could be a big one.


















We just noticed this evening that the current measuring objective of the active chart formation,
the big Head and Shoulders top, is 1182 which is roughly a 25% decline from the October 2007 top.
So we have an intermediate target if this chart comparison is to continue successfully.

The bear market decline of 2000-2003 ended up down roughly 47% from the top.
















That would be about 836 on today's charts, for those
at home who are keeping score.

What Happened in the Last Recession and Bear Market?

Yippee ki-yay....

A Capital Idea, Without Free Reserves, but Still Plenty of Room for Concern

To put this patient to bed so to speak, for banks the issue is not one of reserves, but one of capital. Reserves are what the regulator says you must hold based on formulas involving the size and nature of deposits you are holding. Capital is what you have to work with, the base from which you make loans and do business.

Liquidity relief from the Fed can help avoid a credit crunch, which is a short term liquidity problem that can come from a variety of sources, including operational problems like major snowstorms impeding check clearing, major events such as 911, and bank panics. The key phrase is short term imbalance between supply and demand.

``There is no relationship between non-borrowed reserves and anything the Fed cares about, be it inflation, employment or real GDP,'' said Paul Kasriel, chief economist at the Northern Trust Corp. in Chicago.

Insolvency is the real financial problem here. Insolvency stems from insufficient working capital to meet the continuing business needs of the bank, not incidentally, but because of some major business loss depleting capital or a failure to make the appropriate growth provisions. Its working capital that banks are seeking to increase when they sell preferred shares to the SWFs, for example.

Capital is something the Fed cannot directly provide. It does not buy bank shares. It can help to arrange mergers and rescues. It can make capital sufficiently inexpensive to make deals between parties feasible. But it cannot (at this time) directly intervene in the corporate bond and equity markets. The Fed and Treasury did surprise us after the tech bubble bust, so let's continue working on our differential diagnosis , because the financial system still seems to be suffering from a sickness unto death.

Here are a few charts worth watching and perhaps becoming concerned about at some point although by the time it shows up here...