Goldman Sachs Loses $3 Billion In Humiliating Apple Card Disaster

[@Super-lq2he]

If only Goldman actually read the apple terms of service, instead of blindly clicking “I agree”

[@tiamat_023]

ba-zing!

[@OnTheThirdDay]

This

[@sarge89]

at least they are not selected to be human centipede prototype

[@well-blazeredman6187]

Very clever. 😅

[@williamhaynes7089]

@@sarge89 great episode of SP

[@1986verity]

Many people use it to buy an iPhone on credit. You ask any asian mom to buy a cellphone on credit and they will disown you then and there.

[@bonwatcher]

I knew this would implode because I couldn't understand what they used as an algorithm to decide on who gets an Apple card or not when they rejected me and my 800+ credit score, yet the wife with basically the same info got one. 🤷‍♂ Besides that, we pretty much only use it when buying Apple products for the cash back or zero interest rate.

[@vanesslifeygo]

I remember news articles that said the opposite. they accused the card of being sexist because men got approved but women did not with the same details. seems it goes both ways.

[@tvguyjake]

they wanted to hook your wife into high interest revolving credit monthly

[@tannerghost16]

😂 imagine having an 800+ credit score and crying because you didn’t get approved for an Apple Card. Great story bro

[@ThatLoudCockatoo]

Same here. I applied for one when I nought a mee tablet to do payments. Lolno. Got denied. Just paid cash.

[@tumslucks9781]

@@tannerghost16 You type very poor.

[@rwnagel]

This was not the first Apple credit card. They had on back in the 90’s. If I remember right it got you a 5% rebate on what you charged. I got a scanner that went for about $700. They closed it out after a year or two.

[@igotheals]

In recent years, they also would let you finance large purchases from the Apple Store with basically a Barclaycard. Apple didn't integrate it with Wallet or their ecosystem at all, so in the end, you just wound up with a normal-ass credit card, lol.

[@Seoulsearch616]

Very informative... I haven't heard anyone else talking about this. Thank you! 👍

[@whatident]

what happens if Goldman decides to give up? the deal with Apple can't have been so stupid that Goldman cannot withdraw under any circumstances? if Goldman completely pulls out, Apple also has a problem, given that other banks didn't throw their hat in the ring in the first place

[@Jennn]

Wow! Thank you for all the research you did for this. I find it absolutely Fascinating that Goldman would take such unfavorable terms on their first venture of this sort. Wild world. Apple certainly got lucky there lol.

[@joez.2794]

Lol, what do you mean people who consoom a $1,000 phone every other year have bad credit?

[@thejustifier5566]

Top comment here

[@jessealexander9074]

Still got my iphone 6s baby

[@martinithechobit]

And made by poverty doomer Chinese.

[@mikatu]

yes, the consoom is a problen!

[@Inkling777]

You've got it right. I see people with a new iPhone and an Apple Watch working at low-paying retail jobs. They can't afford a new car or a home, so they splurge on digital stuff. They've maxed out their credit.

[@scottn7cy]

Why do I feel so good about seeing Government Sachs getting hurt?

[@benj3911]

They're not hurt lol.

[@adjutant]

apple cornered goldman sachs into picking up nickels in front of a steamroller... i laughed hahaha

[@avernvrey7422]

"Nickels in front of a steamroller" is an old expression in finance for easy, but small, profits that comes with a great background risk which could wipe you out. Such as selling uncovered calls.

[@j121212100]

Consumer banking was foisted upon them when they had to become a real bank to get Fed bailout money back in 2008-2009.

[@carlhickmanii259]

You always come through with something good and different. Excellent work

[@CJjefferson94360]

I agree 💯

[@ardurabangarang7397]

You’re overusing that one margin call scene so much I love how you just pull up footage from a random KZbin video on it lol.

[@bizzfo]

Low interest rates? You should check your info.

[@ktktktktktktkt]

If all the other banks pulled out, Goldman should have been in a very strong negotiating position right? Apple would not be able to launch the card without partnering with a bank. Or is there something I'm missing?

[@bayareaartist999]

Apple could have just bought a small bank and did the card that way. Apple saw greed on the face of Goldman's bankers and they got out maneuvered in the negotiations. It's all about the upfront deal where people get their bonuses. NOT the long term viability of what is being set up, applecard, coinbase ect.

[@bruxi78230]

Apple has been very adept at offering financial services. Apple Pay and related projects are a huge success. Earlier this year Apple acquired a software company that allows them to bring additional services in-house. Apple has a massive cash hoard, some of which is deposited in banks earns next to nothing. It makes total sense for them to covert that cash from low yielding deposits to sales that on an operating margin basis earns them 8 or 9 times more.

[@xeridea]

Apple is very seasoned at strong arming other companies into their horrible terms, and screwing over everyone else for their own profit. Their loyal brainwashed customers feel Apple can do no wrong, and just go along with anything.

[@MarcosElMalo2]

@@bruxi78230 not that much in banks, but in money market funds that earn a better return than zero for the part they want to keep liquid-ish, and bonds with a big spread in maturities. Or so I remember hearing during an earnings call a few years back. When they’re anticipating a purchase, the sell the money market funds and dump some of the money from maturing bonds into the acquisition/capital fund.

[@MarcosElMalo2]

@@bayareaartist999 But what was the actual deal? The video says it was bad, but I’m missing the details. No fee checks out. Low interest rates does not. It depends on credit history and score. I don’t think it’s fair to blame losses on one product unless you can break down the losses. All we know for sure from this video is that Apple Card is probably partly at fault, but other products in their consumer banking division could have been responsible, too. I like WSM’s videos, but this video is much too light on details.

[@huddunlap3999]

I use the Apple Card to buy Apple products interest free. I disagree with the comment that interest rates are low. My credit rating is over 800 and the interest rate is absurd. I don't use it for anything else.

[@PresidentEvil]

same

[@rexmann1984]

Probably part of the reason it failed. Not sure he showed a laughing Tim Cook in the thumbnail he won't be laughing for long. China is losing its ability to function

[@FogelsChannel]

I agree. The video doesn't explain what caused Goldman to lose $8B. Did the Apple Card users not pay their monthly credit card statements? The only reason given is 'the apple card terms'. What were the terms that were so glaringly poor ?

[@rolewis13]

Same here otherwise to me it’s a useless card but there’s no fee for having it, so I’ll keep it lol

[@smthng]

@@FogelsChannel Honestly, this chanel's videos are getting worse and worse, it's become a glorified regurgitation of 5-6 major news outlets with a snarky comment every 30 seconds, as well as the mandatory shilling of Masterworks/MooMoo/any other random predatory financial product

[@AyyGin]

I remember when the Apple Card first came out, every personal finance guru was recommending it for first time credit card holders lol

[@estiennetaylor1260]

Lol their flop

[@ibrahimadiallo3144]

Did you listen to the video? It’s flop for Goldman, not for users!

[@zimbu_]

It might be a strange choice of target crowd, but I don't see anything particularly bad about the recommendation itself. It was a credit card with low fees and interest rates from a large US bank.

[@PaulGhiran]

It was and still is the best card, preicsely because it's bad for the bank. Pay more attention

[@nicholasroberts1374]

I have worked in the credit card industry for 30 years. Co-Brands are notoriously difficult for a bank to make any money as most of the revenue goes to the partner. Big brands with a loyal customer base (like Apple) will take their pound of flesh. That is why the other major players in the industry did not want to play Apple's game.

[@baoboumusic]

6:40 "no fees and low interest rates" and that without a stringent approval process... Wow. Financial wizards at Goldman.

[@nati032158]

I appreciate you dividing the video with each segment!

[@RastaJew]

huh. who would have thought that people who buy stupidly overpriced and bad value phones tend to get behind in their credit card payments?

[@jwoodrff]

I have their card. Goldman does not know how to do credit cards. Apple promoted the use of this card by asserting that using would improve my credit standing. I could have paid cash. I paid by Apple card. My credit rating dropped 70 points overnight. THat is what happens when you finance through loan sharks and low-quality finance companies.

[@franciscody9622]

Rishi Sunak, the UK PM, worked at Goldman. Goldman Sach had to pay the Malaysian Government billions for raising billions for the former Malaysian PM who is now in jail for corruption. Let that sink in.

[@jimg2850]

They should have made the card incredibly expensive but with really cool features which are re-invented every couple of years and a long waiting list.

[@Iron-Bridge]

☝️💯 🤣 . Saw the metaphor.

[@Leisurelee53]

A clan of vampires is clumsy and disgusted when dealing with peasants. How shocking.

[@bigboss337]

Goldman Sachs lost money? Cry me a river 😂

[@janakakumara3836]

I would like to know what the terms of the re-negotiation with Apple was. What was changed? Did they increase the credit score cut off? Incrase fees? Increase interest rates? What did Apple agree to, to help GS?

[@Mehwhatevr]

I don’t know if it already happened, but interest rates did go up a few months back. Could be related?

[@tamwilfred]

@@Mehwhatevr Interest rates in general have gone up. All credit cards are charging higher interest.

[@Mehwhatevr]

@@tamwilfred yeah... I know.

[@oneshot2g]

GS absence in retail banking is due to regulations. JPMorgan, Citi are a result mergers and acquisitions. Both which brought them massive interests from the DOJ. That would have been perilous if GS did so.

[@beretaniastreet6384]

What regulation keeps GS from retail banking?

[@MBarberfan4life]

​@@beretaniastreet6384he thinks this is 1934, lol

[@oneshot2g]

@@beretaniastreet6384 GS didnt become a bank holding company until 2008. That brought about more oversight from the fed, along with additional capital requirements. No one batted an eye. Because previously Citi (during Clinton) had broken the wall between commercial and wall street, then Chase entered the world of investment banking.

[@alexanderSydneyOz]

@@oneshot2g Such an unusual pleasure to see a poster on YT videos who actually has a clue about financial markets.

[@drwisdom1]

The important lesson of this video is when you turn your life over to Apple they know they own you, they will take as much from you as they can get, and you better say thank you.

[@teapurveyor]

Of course it did. They were giving cards to people with low credit scores who don't understand how finance works. People who get a tax refund and think they're rich. Naturally this would backfire.

[@matthewmelange]

Video starts at 6:25 Video could be 10 seconds long with “Apple Card has double the charge off rate to competitors. Bye.”

[@POVwithRC]

Bless 🙏

[@LD-Orbs]

No yummy details on how GS got suckered into the deal. That's where the story is!

[@drakewauters2109]

Scenes from Margin Call.

[@KhemistryIBMOR]

That was a fool's errand for Goldman. Poor judgment and leadership concerning that Apple venture.

[@mototacularlife5267]

Still not remotely understanding how they’ve lost anything at all. The take a percentage of every single purchase, they spend zero time advertising and or working out deals with 3rd parties that other cards seem to spend countless hours working on while making the process of baking it all into points that are a pain to redeem. Still don’t get how they’ve lost

[@ollieandotis]

I think the video said the rate of late or missed payments is 3%, so if the fee they get for processing transactions is low enough that difference could lead to a loss. I’m seeing anywhere from 1.58% + 10 cents to 2.7% + 10 cents as the fee, so if Goldman processed $100 Billion receiving maybe around $2 billion in fees, but were on the hook for 3% missed payments (ie $3 billion) then they are down $1 billion.

[@kirankumarsukumar]

Consumer banking is peanuts for Goldman Sachs

[@kevinbarry71]

Take a look at their wider results, they have been under performing for more than a decade.

[@mikatu]

@@kevinbarry71 Yes, underperforming is having 20B+ in profit!

[@kevinbarry71]

@@mikatu go ask the investors how they feel about it? They're not happy. Of course they should know better; they're going to keep most of the money for the criminals running the place

[@felawes]

Everyone knew it was going to be a disaster.

[@alexanderSydneyOz]

"Humiliating". I often see people claiming some country, government or company has been "humiliated" The claim is just such utter nonsense. A concept like "humiliation" has no relevance to entities like this, and are used solely by people who like criticising them. Especially for companies like GS, the bottom line is the only measure of anything, and GS is, along with Morgan Stanley, is the planet's premier investment bank, and very successful. I would not personally expect David Solomon to be blushing with shame over the matter.

[@vit3869]

High risk, Low reward... Never in one sentence.

[@pgk60]

Greed. Just greed.

[@yukuhana]

I got one when it was first offered, just for the supposed prestige... I have not used it for a single charge.

[@denishannan1408]

result of greed.

[@markasmith99]

Goldman could have crafted their own titanium card with better rewards targeted to attract customers on their own. The didn’t need apple or high risk to do it.

[@challow90221]

I think they would have failed at marketing to us middle class folks though. They live on their name and thus have expertly marketed to an exclusive market but their name alone would likely not interest the average banker. I think Charles Schwab does a better job at this. If I’m just hearing about Marcus now thanks to this video then that proves my point as the Marcus name is deeply associated with Goldman.

[@adampagano5361]

Consumer banking is about getting liquidity into the balance sheet. Heads should have rolled at GS for how badly they bungled the Apple deal.

[@Spectator007]

It feels good knowing I was part of something that cost these guys $3B

[@TheGuillotineKing]

Fun Fact This loss will effect you more than it effects GS

[@AllHailNannerpuss]

Goldman wasn't taken advantage of. It's not like the deal with Apple was for free at no cost to Apple. Goldman got something out of it.

[@davis907]

There were no costs for apple only Profits Form interchange fees

[@vin.k.k]

They knew what was in store for them.

[@CJjefferson94360]

Fire 🔥 content

[@lambertois11]

The old proverb: The smart pigs get fat, but the greedy hogs get slaughtered.

[@estmed]

So foolish Mcdonald fries contain no potatoes

[@drwisdom1]

Unrelated, but those Marcus commercials with the greedy arrogant redhead were screaming don't bank with us.

[@RM-xf9gi]

Goldman could have been successful as a consumer banker but executives turned their noses at it and wouldn't let it succeed. Too bad.

[@hillbilly4895]

So, being named Solomon doesn't automatically include wisdom? (thank you...I'll be here all week)

[@saiyaddanapudi9216]

Even Solomon started worshipping “false” gods, so this seems to actually be about right

[@OnTheThirdDay]

@@saiyaddanapudi9216 It all started with marrying hundreds of women. (And they weren't good women either.) Someone so wise being so foolish.

[@timothywilliams8530]

Wow, how did the card lose that much? Lots of debt from apple users?

[@christinesommerfeld9815]

Loose?

[@mikatu]

it is quite loose indeed

[@FairBeautyEssentials]

Interest rates low? LIAR! Not mine

[@EnlightenedSavage]

Starts @6:30

[@wanmanda]

Life saver

[@rvbzero7]

Heroes are still out there

[@vernearase3044]

Actually, I _love_ my Apple Card and it's my primary financial instrument. I pay it off every month, and channel most of my non-Amazon purchases through it including payments for utilities and practically any payment with a recurrent nature. Of course, this means I don't pay interest, and get rewards for practically everything.

[@MarcosElMalo2]

My rate is pretty high, and when rates started going up it was pretty brutal. This past fall and winter I really made the effort to return the balance to zero. I think the wallet app interface really helped me stay on top of my spending and my payments, enabling me to clear the debt more quickly. It made credit card monthly payments into a game. So, yeah. I also like my Apple Card. If you use it like an American Express and pay the entire balance every month, you’re in the catbird seat.

[@vdubbin]

Same, I’ve had Apple Card since the minute I could apply. I use it for absolutely everything. Started with a $4K credit limit. Now it’s $18k. Received thousands in cash back. Bought a car for half the purchase price with it. Never paid a penny of interest (never will). If they raised the interest rate to 50% I wouldn’t care.

[@kilohotel6750]

Those three percent charge off people are probably the same ones that buy big huge SUV’s and always drive around with the fuel light on.

[@svalere4407]

Please stop using the same scene from Margin Call. It's on every KZbin video about finances.

[@mikestanmore2614]

I think our (Australian) ex treasurer went to Goldman Sachs. I wouldn't be surprised if this was all his work.

[@jemiez9383]

Well,shit happened if you a massive conglomerates but have a part time DJ as your CEO😂

[@tigerscott2966]

Great video....thanks

[@morgenholz]

This explains why they won’t raise my limit, even with a good spending history and 800 FICO score.

[@trader5515]

Thank you

[@LIONTAMER3D]

How tf do these 2 companies collaborate to lose money, lol?!

[@chrislj2890]

"Taken advantage of"? That CEO is a big boy, and if he made a stupid deal then tough crunchies. Everybody wants that easy money.

[@peterd788]

As soon as I saw the Apple Card details I just couldn't see why Goldmans were involved.

[@phpmaven]

Low interest rates? Right now the APR is 26.74%

[@xyzmediaandentertainment8313]

At least Goldman CEO David Solomon is a sick DJ.

[@johnwhitworth679]

The Marcus 😂😂😂😂

[@davidjma7226]

Companies always get into trouble when they stray from their core business. It is scientifically proven. In this case consumer banking!

[@Ilikeavocados123]

Should of partner with Amex

[@Pistolpete218]

They were gonna pass but then they heard, “fortune favors the brave”

[@muhammad-bin-american]

Excellent news! Now I drink my coffee.

[@Jeez001]

Goldman is getting ready to sell of its consumer division that’s why they put it in separate division .

[@drajitshekher]

Apple is a for profit company. And it's said a fool and his money are soon parted. If not by Apple then someone else

[@JoshSny]

When Chase start the Sapphire reserve card, they repor, lost of 2 billion, but they know that they will get the fees charge for every transaction for the life of every customer and that makes 2 billions nothing comparing to what they make in the next 10 years

[@battery_wattage]

Maybe I’m a reason why it’s failing. All they’ve earned was interest that they payed me. 😂

[@SamJohnsonAZ]

9:57 the ceo just lost them billions and is DJing lmfaooo

[@mimusic1853]

No risk no reward, and no Apple didn’t take advantage of them

[@luisrinc]

You didn't explain why it was a failure, all the information was in the title

[@brandonb819]

Nextcard anyone remember that thing in the late 90s. Similar issues

[@lr937]

Those guy keep loosing billions … and people still trust them… something is really wrong

[@geoffreyzziwambazza7862]

I immediately knew the Apple Card was a bad idea when it told me my suggested APR was 23.99%. That was a hard no for me. I’m not some first time credit card holder in his early 20s to be falling for that bs. Honestly, I just saw it as another overpriced Apple product.

[@thawhiteazn]

Why worry about the APR? Pay your statement balance each month and it’s a non-factor

[@geoffreyzziwambazza7862]

@@thawhiteazn sometimes the unexpected happens to people who thought they had things under control. I thought something similar and then covid hit. 3 months without a paycheck really has away with screwing over your finances. So your comment misses the mark on wise real-world advice.

[@thawhiteazn]

@@geoffreyzziwambazza7862 Fair enough if you were applying for it as your only or primary credit card, but I wouldn’t have expected that to be the case for most people using this card.

[@benj3911]

@@geoffreyzziwambazza7862 That's why when I buy something with a CC, I initiate a bank transfer early so as not to wait 30 days.

[@FULANODETAL]

all its like a casino

[@parrotraiser6541]

The most dangerous words in investment; "How hard can it be?". Answer: "Very".

[@maratmipt]

Probably weaker risk management than Mexican Pay day loan companies have. Would make them profitable for the half of their CRO salary.

[@ballerr45]

They got played

[@SFCaliofUSA]

Apple Card closed my account without hesitation nor I received a warning in advance. They said I make too much cash back😂 what a nonsense. I ask where in their disclosure says this, their specialist don’t know anything 😂 sad 😢

[@Inkling777]

You were too clever for their taste. Those who sell credit want to sign up people who run up major debts, generating a lot of interest payments, but somehow manage to keep up their payments.

[@mayur_je]

3:09 that's distracring and sometimes confusing my dear friend..

[@georgesenda1952]

Goldman Sachs closed my Marcus account because I hadn't had the time to put money in it. As for the Apple Card, despite Apple & Goldman saying they would give a card to people with less than perfect credit, I kept getting turned down for a card even with a perfect payment record on all credit for 3 years straight and when I had a 650 credit score. To me that means both Apple and Goldman were lying and didn't want people who had low limit credit cards or who were rebuilding their credit. I've been using Macs for years and still use my Apple ][ computers, once had 22 Macs and have Mac Minis, Ipads, and Iphones, Imacs and Ipods and Apple tv. They would have gotten business from me for life and I was 66 back then. Screw Goldman and Apple. I will just save my money and pay cash and Apple won't get my money except for Applecare.

[@RN1441]

I expected better from DJ Sol. Wait, no I didn't.

[@mikapeltokorpi7671]

Apple card is outrageously expensive and it still makes bank to bleed money???? Reorg in Goldman Sachs sounds like they are ready to ditch Apple Card deal.

[@joeyg7458]

The Apple Card customer service sucks

[@ethanchabert]

They should have just bought a smaller bank and acquired it's management if they wanted to get into that market. Then throw money at it to expand through marketing or more acquisitions.

[@michaelclennan8425]

Apparently Apple wanted the best deal for Apple users. Goldman wanted money for themselves.

[@alexanderSydneyOz]

Unlike Apple, right? Oh, and everyone else.

[@Zetornator]

3:04 editor forgot to remove something lol

[@yukie_tn]

Consumer/retail banking is actually not very profitable unless you have massive scale, and even then i question that it's more profitable than their IB business. You have a lot of small transactions and need the infrastructure (such as branches) / overhead for very little gain. For a long time GS thought it wasn't worth their time, until internet banking became a thing.

[@BA-gn3qb]

A friend has an Apple Card. And it's Metal. Not plastic. Pretty neat. But that CEO of Goldman Sachs HAS to go.

[@jried48]

No mention of Green Sky?

[@harry8912]

I got the Apple Card and have no complaints on it. I pay and have had no issues, despite my income being 40k in NYC. I’m not surprised that they took all those losses since many apple fanboys can barely afford the iPhone.