Tag Archives: Goldman Sachs

Goldman Sachs: No ‘sustainable’ profit in curing diseases

When I began blogging some 10 years ago, I was a conspiracy theory innocent and, like many Americans, looked askance at conspiracy theories.

By the way, did you know that the CIA concocted the “conspiracy theorist” label for the express purpose of attacking and discrediting people who questioned the official narrative about the Kennedy assassination? (Source)

After ten years of daily blogging, which requires me to be attuned to both mainstream and alternative media, I have discovered that, alarmingly, most conspiracy theories turn out to be true.

One conspiracy theory has to do with Big Pharma. From the mouth of Goldman Sachs, the multinational investment bank and financial services company, now comes confirmation of the suspicion that the pharmaceutical industry has a vested interest not in curing diseases, but in keeping people sick.

Tae Kim reports for CNBC that an April 10, 2018 Goldman Sachs report for biotech companies, The Genome Revolution, asks if curing diseases is “a sustainable business model” for pharmaceutical companies because, unlike long-term management of diseases (“chronic therapies”), “one shot cures” don’t deliver “recurring revenue” or “sustained cash flow”.

In a note to clients, Salveen Jaswal Richte, 40, vice president of Goldman Sachs’ research division, wrote:

“The potential to deliver ‘one shot cures’ is one of the most attractive aspects of gene therapy, genetically-engineered cell therapy and gene editing. However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies. While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow.

For a “biotech expert,” it is interesting that Ms. Richte has only a B.S. in Biomedical Engineering (and a minor in Entrepreneurship and Management) from Johns Hopkins University. She and her husband, Mark Jason Richter, owns an apartment in New York City which they’d purchased last year for $4.58 million.

I can’t help but wonder what Salveen Richte would do if her daughter comes down with a disease for which Big Pharma refuses to develop a “one shot cure” because it’s more profitable to keep her on a lifetime regimen of drugs?

As an example of unprofitable “one shot cures,” Richter cited Gilead Sciences’ treatments for hepatitis C, which achieved cure rates of more than 90%. The company’s U.S. sales for these hepatitis C treatments peaked at $12.5 billion in 2015, but have been falling ever since. Goldman estimates the U.S. sales for these treatments will be less than $4 billion this year, according to a table in the report.

Richte also points out the unprofitability of curing infectious diseases such as hepatitis C because it decreases the number of “carriers” — those infected with Hep C — who can transmit the virus to infect others:

“GILD is a case in point, where the success of its hepatitis C franchise has gradually exhausted the available pool of treatable patients. In the case of infectious diseases such as hepatitis C, curing existing patients also decreases the number of carriers able to transmit the virus to new patients, thus the incident pool also declines … Where an incident pool remains stable (eg, in cancer) the potential for a cure poses less risk to the sustainability of a franchise.”

The report suggests three potential solutions to deliver the big bucks for biotech firms:

“Solution 1: Address large markets: Hemophilia is a $9-10bn WW market (hemophilia A, B), growing at ~6-7% annually.”

“Solution 2: Address disorders with high incidence: Spinal muscular atrophy (SMA) affects the cells (neurons) in the spinal cord, impacting the ability to walk, eat, or breathe.”

“Solution 3: Constant innovation and portfolio expansion: There are hundreds of inherited retinal diseases (genetics forms of blindness) … Pace of innovation will also play a role as future programs can offset the declining revenue trajectory of prior assets.”

@PaxNostrum tweets:

I was involved in pharmaceutical litigation against big drug companies. This, or something similar, has been said thousands of times under oath by Pharma reps and their counsel. Money is made on treatment, not cures. They would bury cures & promote treatment in a NY second.

@Fruityboots tweets:

everybody with an infectious disease let’s cough on some napkins and mail em to Goldman Sachs

H/t FOTM‘s josephbc69

See also:


Ted Cruz’s undisclosed $1M loan from Goldman Sachs

Heidi and Ted Cruz, March 23, 2015, Lynchburg, VA. (Photo Paul J. Richards/AFP/Getty Images)

Heidi and Ted Cruz, March 23, 2015, Lynchburg, VA. (Photo Paul J. Richards/AFP/Getty Images)

Senator Ted Cruz’s wife, Heidi, is head of the Southwest Region in the Investment Management Division of the Wall Street investment bank Goldman Sachs, on a temporary “leave” because of Ted’s presidential campaign.

Heidi Cruz is also a former investment banker for J.P. Morgan and a “historical member” of the Council on Foreign Relations (CFR), for which she served as a member of the CFR-sponsored Independent Task Force on the Future of North America, which a North American Union. (See “Is Ted Cruz an advocate of a North American Union?“)

Although Heidi Cruz presently is on leave, she was fully working for Goldman Sachs in 2012 when Ted obtained a low-interest $1 million loan from her employer for his senatorial campaign. To top it off, Ted Cruz did not disclose the loan as he is required by law.

The New York Times reports on Jan. 13, 2016, that campaign finance reports show that in the critical weeks before the May 2012 GOP primary, Ted Cruz put “personal funds” totaling $960,000 into his Senate campaign. Two months later, shortly before a scheduled runoff election, he added more, bringing the total to $1.2 million — “which is all we had saved,” as Cruz described it in an interview.

But a review of personal financial disclosures that Cruz filed later with the Senate does not show a liquidation of assets that would have accounted for all the money he spent on his campaign. What it does show, however, is that in the first half of 2012, Ted and Heidi Cruz obtained a low-interest loan from Goldman Sachs, as well as another one from Citibank. The loans totaled $750,000 and eventually increased to $1 million before being paid down later that year. Both loans had floating interest rates around 3%, generally in line with rates available to wealthy borrowers at that time.

Neither loan appears in reports filed by Cruz’s senate campaign committee with the Federal Election Commission (FEC).

Candidates are required to disclose the source of money they borrow to finance their campaigns. Other campaigns have been investigated and fined for failing to make such disclosures, which are intended to inform voters and prevent candidates from receiving special treatment from lenders.

A spokeswoman for Cruz’s presidential campaign, Catherine Frazier, acknowledged that the loan from Goldman Sachs, drawn against the value of the Cruzes’ brokerage account, was a source of money for the Senate race, but insisted that the failure to report the loan was “inadvertent” and that there had been no attempt to hide anything. Frazier did not address whether the Citibank loan was used also for Cruz’s Senate race.

Former election commission lawyer who specializes in campaign finance law Kenneth Gross, however, disagrees.

Gross said that listing a bank loan in an annual Senate ethics report — which deals only with personal finances — would not satisfy the requirement that it be promptly disclosed to election officials during a campaign: “They’re two different reporting regimes. The law says if you get a loan for the purpose of funding a campaign, you have to show the original source of the loan, the terms of the loan and you even have to provide a copy of the loan document to the Federal Election Commission.”

Specifically, in failing to report the two bank loans to the FEC, Cruz violated:

  • 52 USC 30104 (b)(2) (6), which requires the committee of a federal candidate to disclose on a report filed “loans made by or guaranteed by the candidate”; and
  • 52 USC 30104(b)(4)(d), which requires the reporting of “repayment of loans made by or guaranteed by the candidate”.

ZeroHedge points out that someone will have to file an official complaint against Cruz, and the FEC could impose fines. But if evidence emerges that his failure to disclose the loans was ‘knowing and willful,’ he could be criminally prosecuted by the U.S. Department of Justice, according to campaign finance experts.

Aside from Ted Cruz’s dishonesty in not reporting the loans to the FEC, there is also the matter of his hypocrisy.

In 2012 when he ran for the Senate as a darling of the Tea Party, and in his current presidential campaign, Ted Cruz presents himself as a populist for the “little man,” against Wall Street bailouts and the influence of big banks in Washington. Recently, when asked about the political clout of Goldman Sachs in particular, he replied:

“Like many other players on Wall Street and big business, they seek out and get special favors from government.”

As financial analyst Martin Armstrong puts it:

The dishonesty here is that Cruz has pretended to stand against the bankers…. I am sorry. But Cruz is bought and paid for and would be in the pocket of the New York Banks no different than Hillary, Bush, or the rest of them who take money from this crowd. You do not forget to report a loan from Goldman Sachs when your wife is a managing director. Come on. How stupid do we have to be to entertain this excuse?

See also:


Wall Street owns Clintons; Goldman Sachs biggest donor

Faces of Hillary

So much for the fiction that Democrats are for the poor, the oppressed, the little guy. In truth, Democrats only use them for their votes to stay in power — in other words, as Useful Idiots.

Here’s the evidence.

The Wall Street Journal reports (via Zero Hedge) that, even before Hillary “What difference does it make?” Clinton formally declares she’s running for POTUS in 2016, the Clintons already have accumulated the most formidable war chest in the history of the United States.

To date, during two decades on the national stage through campaigns, paid speeches, and a rat’s nest of organizations advancing their political goals, Clinton Inc. has raised about $3 billion from all sources, including individual donors, corporate contributors and foreign governments.

More than $1 billion of Clinton Inc.’s war chest come from U.S. companies and industry donors, of which Wall Street financial services firms have been one of the single largest sources of money. And of those Wall Street donors, the No. 1 supporter of the Clintons — accounting for nearly $5 million in donation — is Goldman Sachs.

Clinton Inc1The WSJ concludes:

Those deep ties potentially give Mrs. Clinton a financial advantage in the 2016 presidential election, if she runs, and could bring industry donors back to the Democratic Party for the first time since Mr. Clinton left the White House. […]

Not counting about $250 million the Clinton foundation has received from foreign donors, at least 75% of the money arrived in large donations from industry sources, a category defined by federal regulators and the Center for Responsive Politics. […]

“She has the credibility among Wall Street donors that could make it likely that Wall Street moves back into the Democratic fold,” said Sam Geduldig, a Republican lobbyist and fundraiser who represents Wall Street firms.


Will there be a JCPenney a year from now?

Ron Johnson

Ron Johnson, the man who single-handedly destroyed JC Penney

For more than a year, FOTM has been chronicling the precipitous decline of J. C. Penney (JCP) which began when CEO Ron Johnson decided to “improve” the family store by pandering to homosexuals — hiring lesbian Ellen Degeneris as the company’s spokeswoman, and featuring lesbians and gay men as, respectively, moms and dads in its Mother’s Day and Father’s Day ads.


Earth to Ron Johnson: Gay men don’t buy their clothes from JC Penney!


Johnson’s move wasn’t smart on the grounds of simple market calculation. The plain truth is that homosexuals comprise no more than 2% of the U.S. population, according to a study by the Williams Institute, a gay and lesbian think tank at UCLA School of Law, and corroborated by none other than the U.S. Centers for Disease Control and Prevention (CDC).

Alas, more than 5 months after JCP finally gave Johnson the boot, JCP’s fortunes continue to sink. The question must now be asked:

Will there be a JCPenney a year from now?

Here are the bad signs:

1. JCP is losing even more money than a year ago

On Aug. 20, 2013, USA Today reports that JCP reported a net loss of $586 million for its second quarter — its 9th consecutive drop in quarterly revenue. The $586 million loss compares with a $147 million net loss a year ago. Same-store sales were down about 12% from the second quarter of 2012.

2. Investors are jumping out of the sinking ship

CNN reports that in late August, investor and hedge fund manager Bill Ackman who began buying JCP in October 2010 when shares were around $25 a piece, cut his losses and sold his entire stake — all 39 million shares in JCP to Citigroup. The latter then offered the shares at $12.90 each, which means Ackman took a loss of $500 million.

3. Goldman Sachs begins to talk about JCP going bankrupt

ZeroHedge reports on Sept. 24, 2013 that Goldman Sachs just wrote a report in which it laid out, in a lucid and compelling manner, why JCP is doomed although the report tried to soften the blow by saying “we believe handicapping a bankruptcy filing for JCP is premature.”

4. JCP stocks plunged to single-digits

The day after the Goldman Sachs report, on Sept. 25, 2013, as reported by ZeroHedge, JCP stocks fell 16% to single-digits.

JCP now trades sub-$10

5. Even before the cratering of JCP stocks, in early August, analyst Jon Najarian already had said J.C. Penney can’t be saved.

As reported by Jeff Macke for Yahoo, Aug. 1, 2013, OptionMonster.com’s Jon Najarian thinks a year from now J.C. Penney will be little more than a distant memory or half the size it is today.

Macke paints a stark picture:

Retail is difficult to execute but not complicated to analyze. If you turn down all the noise and walk through most of the 1,000+ J.C. Penney stores around the country, you’ll find a lot of chaos and not many customers. The most loyal Penney’s shoppers have been alienated, and the younger customers the chain so desperately courted have yet to appear.

Current CEO Mike Ullman only took back the corner office in April but there’s little evidence that he’s been able to right the ship. […] 

No retailers can survive a 30% drop in sales over the course of 2 years. Analysts are hopeful the rate of the decline in sales will stabilize by the end of the year but there’s little to suggest that new customers are coming in or the old shoppers have learned to trust JC Penney again. Liquidity and downgrades aside, J.C. Penney’s biggest problem is that customers simply don’t like what it’s become.

See FOTM’s past posts on JCPenney:


Eurozone crisis worsens as Money Market offers 0% interest

Two huge US-based financial institutions, JPMorgan and Goldman Sachs, have stopped investing in European money market funds following the European Central Bank’s decision to cut the deposit rate to 0%.

Bloomberg reports:

JPMorgan, the world’s biggest provider of money-market funds, won’t accept new cash in five euro-denominated money-market and liquidity funds because the rate cut may result in losses for investors, the company said in a notice to shareholders. Goldman Sachs won’t accept new money in its GS Euro Government Liquid Reserves Fund, and BlackRock, the world’s largest asset manager, is restricting deposits in two European funds.

JPMorgan’s five closed funds had 23.7 billion euros ($29.2 billion) in assets as of July 5, the bank said in an e-mail, about 22% of all euro-denominated money funds. […]

The deposit rate cut “will almost certainly move cash bids in short-dated instruments into negative territory, and so we have taken the step to restrict subscriptions and switches into the funds in order to protect existing shareholders from yield dilution,” JPMorgan said on its website.

The company had $417 billion in money fund assets as of May 31, making it the world leader, according to Crane Data LLC, a research firm based in Westborough, Massachusetts. The entire euro-denominated money fund industry has about 108 billion euros [$132.71 billion], Crane Data’s statistics show.

Tyler Durden of ZeroHedge reports that the Goldman Fund Memo says the European market is now in “unchartered [sic] territory” (the word should be “uncharted”).

Effectively, the European money market industry is now closed and only redemptions will be allowed as nobody can make “money” in money markets in a zero deposit rate environment.

The European Central Bank’s decision is sure to affect its liquid reserves fund, as depositors will want to withdraw from and liquidate their money market accounts since their money is making ZERO in interest.

That, in turn, will only worsen the bank runs that we’ve already seen in Greece and Spain, which now will spread to other European countries.

H/t FOTM’s beloved Joseph.


17 big banks on Moody’s chopping block

Founded in 1909, Moody’s (or Moody’s Investors Service) is one of the Big Three credit rating agencies. The other two are Standard & Poor’s and Fitch Group.

On February 15, Moody’s announced a blanket review of 17 banks that operate in global capital markets.

Max Nisen and Simone Foxman report for Business Insider, June 15, 2012, that Moody’s rationale for its review is that the banks “face challenges that are not fully captured in their current ratings” — those of “more fragile funding conditions, wider credit spreads, increased regulatory burdens and more difficult operating conditions.” As a result, the banks’ longer term profitability and growth prospects are greatly “diminished.”

Downgrades on these major banks would have a serious financial impact on not just those banks, but on “counterparties” who have derivatives contracts with the banks.

So far, two of the 17 banks listed have been downgraded. The remaining 15 may be rated down by Moody sometime this month.

Here are the 17 banks, beginning with the two that Moody’s already  downgraded:

1. Nomura: Downgraded one notch to Baa3 on March 15.

2. Macquarie: Downgrade two to A3 on March 16.

3. Bank of America: Potential downgrading by one notch from the current Baa1 rating to Baa2. Potential damage of $3.5 billion.

4. Societe Generale: Possible downgrading by one notch from A1 to A2. Estimated collateral costs are unavailable.

5. Barclays: Possible downgrading by 2 notches from Aa3 to A1. Estimated collateral costs unavailable.

6. BNP Paribas: Possible downgrading by 2 notches from Aa3 to A1. Estimated collateral costs unavailable.

7. Citigroup: Possible downgrading by 2 notches from A3 to Baa2. Potential damage of $1.1 billion.

8. Credit Agricole: Aa3 to A2. Estimated collateral costs available.

9. Deutsch Bank: Aa3 to A2. Potential damage € 168 billion to € 246 billion.

10. Goldman Sachs: A1 to A3. Potential damage $6.8 billion.

11. HSBC: Aa2 to A1. Estimated collateral costs unavailable.

12. JP Morgan: Aa3 to A2. Potential damage $4.7 billion.

13. Royal Bank of Canada: Aa1 to Aa3. Potential damage $6.7 billion.

14. Credit Suisse: Aa2 to A2. Potential damage CHF 4.5 billion (about $4.73 billion).

15. Morgan Stanley: A2 to Baa2 (3 notches!). Potential damage $9.519 billion.

16. UBS: Aa3 to A3 (3 notches). Potential damage CHF 7 billion (around $7.3 billion).

17. Strangely, Business Insider doesn’t give a 17th bank.


Who Gets Your State Income Tax?

If you live in one of 16 states and your employer has a “special deal” with the state government, this applies to you!

More info here

H/T  Kelleigh