Banks, News

Goldman Still Long-Term Greedy, Which Is Still Okay

You could probably think a few things about GS’s earnings released this morning. If you’re an employee, you might gulp nervously at that $292k comp accrual so far and the 1,300 folks whose mastery of the universe became less masterful this quarter. If you’re a shareholder, you have to be modestly pleased with mostly adequate revenues in most businesses though kind of pissed about ICBC. If you’re an accounting purist, you thrill to the idea of a bank that managed not to book billions in DVA gains.

Here, though, is a thing not to think: “Goldman Sachs lost money by doing all of the things the Volcker Rule says it shouldn’t be doing.”

There is some appeal to this: Goldman had okay-not-great results in advisory (up y/o/y, #1 in M&A, faint yay!), equities (up y/o/y), and FICC client business (down 36% y/o/y, but that’s in line with JPM and better than BAC); its net income was negative because of a $2.5bn loss in “Investing & Lending”:

These results reflected a significant decline in global equity markets and unfavorable credit markets. Results for the third quarter of 2011 included a loss of $1.05 billion from the firm’s investment in the ordinary shares of Industrial and Commercial Bank of China Limited (ICBC), net losses of $1.00 billion from other investments in equities, primarily in public equities, as well as net losses of $907 million from debt securities and loans.

Now, losing money on investments is obviously prop! Prop trading is bad! FDIC insured banks losing money on prop trading is the worst!

Well, maybe. But Goldman has closed its “prop trading” business. The Investing & Lending business houses longer term investments. Like the ICBC stake, which is responsible for over 40% of the loss. Or like Facebook. Or like lending to and investing in companies.

These are sort of classic “banking” activities, although to be fair equity investing as a form of banking is less common in America. And they won’t be blocked by Volcker: right in this crystal-clear flowchart you can tell that positions held for more than 60 days are more or less not covered “proprietary trading” and so are not forbidden by the Volcker Rule. Investing in a private equity fund is a problem, but just making private equity investments – never mind loans – is fine.

The Volcker issues are going to come up mostly in Goldman’s FICC business, where profits come from market making activities that can skirt the line of prop versus client facilitation. And there, Goldman did … sort of okay-ish. Maybe. Kind of.

Goldman results: A gift to Volcker Rule proponents [Fortune]

(hidden for your protection)
Show all comments

59 Responses to “Goldman Still Long-Term Greedy, Which Is Still Okay”

  1. Guest says:

    $292k per person?? That's 2007-style cheddar.

    – UBS MD

  2. ChartLover says:

    No chart?

  3. lunatico says:

    No bonus?

  4. #1 Matt Fan says:

    When see the photo of Lloyd, I think he is saying: "WTF Matt? No charts?"

  5. DingALing says:

    One would assume that prop trading will return assuming they revert back to an independent investment banking instead of a holding bank.

    Didn't they spinoff hedge funds for prop trading a couple years ago though?

  6. oh hyperlinks says:

    nice work

  7. Paul Allen says:

    Ladies and Gentlemen,

    I present to you-

    Goldman & Wollensky

    -Lloyd Blankfein

  8. 25th Hour Trader says:

    We eliminate the usual anxiety surrounding earnings season by not having any earnings.

    -UBS Director of Investor Relations

  9. Finndeavor says:

    "Look, this is my left hand-I'm holding it up and out like, "Hey, whoa". Can you see what my right hand is doing? Course not. My left hand is saying, "Oh snap, we are losing money, laying off. Wow, we suck. We are humbled."

    "Right hand is saying, "You can't see me, but it's an excellent time to get rid of dead weight, bad assets, and any other losses while all the riff raff are out there making waves and protesting. Don't want to book nice earnings right now. Come next year, right hand back on God's arm, profits flowing.

  10. Roger says:

    Nice to see GS drop a bundle of sticks on a Chinese bank…. not as if issues weren’t flagged well elsewhere in the firm. Looks like PIA is well on its way to being spun off with bonehead moves like that.

  11. #occupythat says:

    the future leaders of your government

  12. This information is extremely useful for me .thanks!

  13. what Bharara really said "where he is going they will turn his ass into an exercise bike"

  14. Sheryl Balowski says:

    Great post. I’ll think of a way to strategically apply this considered approach to my own site about credit cards for poor credit purposes.

  15. Good website! I truly love how it is easy on my eyes and the data are well written. I’m wondering how I might be notified when a new post has been made. I’ve subscribed to your RSS which must do the trick! Have a nice day! “A rut is a grave with the ends knocked out.” by Laurence J. Peter.

  16. Nntp has existed for the long time. It truly is even over the age of the entire world wide web- exactly what nearly everyone knows because the

  17. Great write-up, I?¦m regular visitor of one?¦s web site, maintain up the nice operate, and It’s going to be a regular visitor for a lengthy time.

  18. Bliprople says:

    [url=]World Clock[/url] is a sort of wall clock of which features the actual time in distinct locations we know.

    Usually such a wall clock age number of regular or even electronic wrist watches and possesses many present, each of them shows any time in a very area or time sector that is known. Intended for [url=]world clock map[/url] every one of the demonstrates tend to be referred to as with all the label on the metropolis or maybe area to help which in turn this pertains. You can find planet designer watches like a entire world chart that has a light-weight projector showing the particular parts of our planet lit by the Solar.

    World wrist watches commonly employed in locations wherever a rigorous alternate connected with details as well as funds in different spots on earth. Throughout everyday life, these kinds of designer watches are most usual within finance institutions as well as communication stores.

  19. sex shop says:

    Very well written article. It will be valuable to everyone who utilizes it, including me. Keep up the good work – looking forward to more posts.

  20. Web Site says:

    I just could not leave your web site before suggesting that I actually enjoyed the usual information a person provide for your visitors? Is going to be back ceaselessly in order to check out new posts

  21. I would like to show appreciation to you just for bailing me out of this type of issue. As a result of searching through the the net and seeing opinions that were not beneficial, I assumed my life was gone. Being alive without the presence of strategies to the problems you’ve solved by means of your good blog post is a crucial case, and ones that could have in a wrong way damaged my career if I had not discovered your site. Your expertise and kindness in touching the whole thing was priceless. I am not sure what I would have done if I hadn’t discovered such a solution like this. It’s possible to at this time look ahead to my future. Thanks for your time so much for your skilled and result oriented guide. I will not be reluctant to recommend the website to any person who should get support about this topic.

  22. Great post, I think website owners should learn a lot from this website its rattling user genial. So much good info on here :D.

  23. Generally I don’t read post on blogs, but I wish to say that this write-up very compelled me to take a look at and do so! Your writing style has been amazed me. Thank you, very great post.

  24. We are awaiting the specific beginning associated with my own university research and the standard groundwork could not are actually total with no dropping by your internet website. I’ve got a issue for you personally. Can you thoughts modifying blog site move links? That you will find genuinely nice!

  25. timezone says:

    That Goldman Still Long-Term Greedy, Which Is Still Okay Dealbreaker: Wall Street Insider – Financial News, Headlines, Commentary and Analysis – Hedge Funds, Private Equity, Banks must to be great!!

  26. Thanks for sharing superb informations. Your site is so cool. I’m impressed by the details that you have on this site. It reveals how nicely you understand this subject. Bookmarked this website page, will come back for extra articles. You, my pal, ROCK! I found just the information I already searched all over the place and simply could not come across. What an ideal site.

  27. Graig Peeks says:

    I’ve read several excellent stuff here. Definitely worth bookmarking for revisiting. I wonder how so much attempt you put to create this sort of magnificent informative website.

  28. Cute Belly says:

    Thank you, I have just been searching for information about this subject for a while and yours is the best I’ve found out so far. However, what about the conclusion? Are you positive concerning the source?

  29. Click here says:

    Thanks for some other informative site. Where else could I am getting that type of info written in such a perfect method? I have a venture that I am just now working on, and I’ve been on the glance out for such info.

  30. Cool Sayings says:

    A smile is a curve that can set a lot of things straight. Don’t forget that! Spread the love! More at:

  31. Hey There. I found your blog using msn. This is a really well written article. I will be sure to bookmark it and come back to read more of your useful information. Thanks for the post. I’ll certainly return.

  32. Internal direct, training, contentment, honour, forbearance plus sentence. Usually a percentage of troubles that Tang Soo Write, the actual Mandarin chinese martial art related to self-defense, can educate we furthermore instilling in you the strength not just in defend your business girls and men capability related with spotting hazard joins to refrain from giving confrontation completely.

  33. Vielen auf Stützpunkt von bei die Infos höhepunkte homepage unsereins anschließen abermals

  34. How do you keep blogger from counting your page views on your blog?

  35. Ula Shintani says:

    Nice blog here! Additionally your web site quite a bit up fast! What host are you using? Can I am getting your affiliate hyperlink for your host? I want my website loaded up as fast as yours lol

  36. F*ckin’ amazing things here. I’m very satisfied to see your post. Thank you a lot and i am having a look forward to contact you. Will you please drop me a mail?

  37. pua pickup says:

    Normally I do not learn post on blogs, however I wish to say that this write-up very forced me to take a look at and do so! Your writing style has been surprised me. Thanks, very great post.

  38. Hey there, You’ve done an excellent job. I’ll definitely digg it and personally suggest to my friends. I’m sure they will be benefited from this web site.

  39. Great beat ! I wish to apprentice while you amend your web site, how can i subscribe for a blog site? The account helped me a acceptable deal. I had been a little bit acquainted of this your broadcast offered bright clear concept

  40. We even now do the classic Northeastern style candied yams along with chocolate buttons. But just an extremely small dish. It’s convention for all of us. These types of look nice, and yes it appears like your leftovers would be beneficial to breakfast with some yogurt or even oatmeal.

  41. Hiya. Self-same cool site!! Guy .. Magnificent .. Superb .. I will bookmark your web place and obtain the feeds also…I’m happy to attain accordingly much beneficial information acceptably here in the post. Show appreciation you for sharing…

  42. You’ve made a number of respectable details there. My spouse and i appeared on the web to the issue determined most people go as well as using your internet site.

  43. Appreciate your assisting, reliable information.

  44. Duane Ghera says:

    wonderful put up, very informative. I wonder why the opposite experts of this sector do not understand this. You must proceed your writing. I’m sure, you have a great readers’ base already!

  45. Magnificent website. Plenty of useful information here. I am sending it to some friends ans also sharing in delicious. And naturally, thank you on your effort!

  46. I am a lengthy time back I read your blog and possesses lengthy been stating that you’re an incredible author wegiel orzech w Wielkopolsce

  47. Hi there would you mind letting me know which hosting company you’re working with? I’ve loaded your blog in 3 completely different internet browsers and I must say this blog loads a lot faster then most. Can you recommend a good web hosting provider at a honest price? Thanks a lot, I appreciate it!

  48. Nowa Gala MM says:

    Wow, amazing blog structure! How long have you been running a blog for? you made blogging glance easy. The overall glance of your website is fantastic, let alone the content material!

  49. Eugene Krenz says:

    Your articles are more than wow!

  50. Szwecja film says:

    What a enormous threaded discussion! I frequently consider very unaccompanied in my choice not to inoculate. I not here my “I am warm with non-immunized patients” pediatrician after living being told that people in the vein of me are the reason that whooping cough at rest exists.

  51. It really is proper time to make some plans for the future and it is time to become content. I’ve read this post and if I could I wish to suggest you couple of intriguing factors or guidance. Possibly you’ll be able to create next articles referring to this short article. I want to read far more items about it!

  52. The subsequent time I read a blog, I hope that it doesnt disappoint me as much as this one. I imply, I do know it was my option to read, however I really thought youd have something interesting to say. All I hear is a bunch of whining about one thing that you possibly can fix in case you werent too busy searching for attention.

  53. Kasi Oh says:

    I’m surely coming again to read these articles and blogs

  54. I would like to point out my respect for your kind-heartedness supporting those people who really need help on that question. Your very own dedication to passing the message across turned out to be really invaluable and has all the time enabled individuals like me to realize their ambitions. Your personal interesting guidelines indicates a great deal a person like me and even more to my mates. Thanks a lot; from each one of us.

  55. utopia says:

    Thanks for the post. My spouse and i have often noticed that a lot of people are desperate to lose weight simply because they wish to look slim plus attractive. Even so, they do not generally realize that there are many benefits so that you can losing weight in addition. Doctors assert that over weight people come across a variety of conditions that can be directly attributed to their particular excess weight. Fortunately that people who definitely are overweight as well as suffering from different diseases are able to reduce the severity of their illnesses simply by losing weight. It is possible to see a slow but noticeable improvement in health whenever even a moderate amount of weight-loss is achieved.

  56. click here says:

    Someone essentially help to make seriously articles I would state. This is the first time I frequented your website page and thus far? I amazed with the research you made to create this particular publish extraordinary. Great job!

  57. I conceive you have mentioned some very interesting points , thanks for the post.