Goldman Sachs: Can You Spare A Squid?

They’ve started with the radio adverts. You can open an online savings account with as little as £1.

“Marcus” (GS was founded by Marcus Goldman in 1869) was launched in September 2018 and will take deposits up to a maximum £250,000, paying 1.5% p.a.

With British bank accounts, deposits are protected up to no more than £85,000 per person (per financial institution). This matters, as a legal case in 1848 established that money left with a bank is not held in trust for the customer, who is merely a creditor (and not the most senior) with a claim on the bank’s assets should it fail.

In fact even that £85,000 (€100,000) is an arbitrary figure not an absolute guarantee; it was reduced to £75,000 in January 2015 and re-raised in January 2017 to the fanfare of “people have more financial protection for their deposits from today.” Potentially, you could end up with merely a slice of the equity of a shrunk and wobbly bank.

Goldman Sachs’ new-found enthusiasm for curating the cash of the “little people who pay taxes” may or may not be connected to the 1MDB scandal that has led to multibillion-dollar claims on behalf of Abu Dhabi and Malaysia. So the pennies of the poor man’s savings may help clear the blockage in the vampire squid’s blood funnel.

The fraud allegations involve the former Prime Minister of Malaysia (Najib Razak) and a Malay businessman called Jho Low. Singapore is extending its criminal investigation to GS, but please don’t worry about the bank execs; for people at their level, the very worst outcome is a spell improving their golf handicaps in a five-star open prison. No bunking with Bubba in a 10 x 8 for them.

No, worry about yourselves, and how you can store value in a world of made-up money, fairy guarantees and swindling.

You may remember the MP who, some years ago, proposed the introduction of completely safe deposit accounts – ones where the bank is only the custodian of your cash and must keep it safe for you: Douglas Carswell, 2010. (He tried again in 2016, as a tabled amendment to the Bank Of Engand Bill.) Failed, of course: the system isn’t broken, it works very well for the people who run it.

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https://www.marcus.co.uk/uk/en/savings
https://en.wikipedia.org/wiki/Goldman_Sachs#Founding_and_establishment
https://www.moneysavingexpert.com/news/2018/09/new-online-bank-makes-its-marcus-with-top-savings-rate/
https://www.bankofengland.co.uk/prudential-regulation/authorisations/financial-services-compensation-scheme
https://en.wikipedia.org/wiki/Foley_v_Hill
https://www.globalresearch.ca/financial-meltdown-and-the-confiscation-of-bank-savings-the-uk-eu-bank-depositor-bail-in-scheme/5475934
https://www.fscs.org.uk/news/2017/january/new-85000-deposit-limit-from-today/
https://en.wikiquote.org/wiki/Leona_Helmsley
https://www.barrons.com/articles/abu-dhabi-fund-sues-goldman-sachs-over-1mdb-1542821292
https://finance.yahoo.com/news/malaysia-seeks-7-5-billion-reparations-goldman-sachs-071652236–sector.html
https://www.straitstimes.com/asia/se-asia/singapore-to-expand-1mdb-criminal-probe-to-include-goldman-sachs
https://www.theguardian.com/world/2018/oct/25/1mdb-scandal-explained-a-tale-of-malaysias-missing-billions
https://www.malaysiakini.com/news/457478
https://positivemoney.org/2010/09/douglas-carswell-mp-introduces-bill-to-stop-fractional-reserve-banking/
https://positivemoney.org/2016/04/23871/

Bonus track – Matt Taibbi’s famous 2010 article on GS in “Rolling Stone” magazine:
https://www.rollingstone.com/politics/politics-news/the-great-american-bubble-machine-195229/