Monday, February 25, 2008

One of the biggest worries is Goldman’s large exposure to leveraged loans, which totaled $42 billion at the end of the firm’s last quarter, according to analyst calculations

Goldman's profit magic may be fading

Goldman also faces hefty losses on some of its large equity stakes. The most brutal could come from Industrial & Commercial Bank of China Ltd., whose shares have fallen 16% on the Hong Kong Stock Exchange since the end of November. That slide could translate into a financial hit for Goldman of roughly $400 million, based on figures provided in the firm's regulatory filings. Overall valuation losses on such large corporate investments could reach $1.4 billion, according to Mr. Trone.

Posted by chris @ 11:01 AM (671 views)
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3 thoughts on “One of the biggest worries is Goldman’s large exposure to leveraged loans, which totaled $42 billion at the end of the firm’s last quarter, according to analyst calculations

  • GS have been pretty smug through all this crunch. But there had to be a soft underbelly somewhere. Somewhere where the gushing credit markets of the past few years fuelled risky investments. Same old story, everyone is a genius when prices are going up.

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  • At Goldman Sachs smug is part of every job description.

    The tide has turned – listen over the coming years to the moaning and lobbying from this bunch of charlatans.

    Business Practice: Clever accounting, moving the year-end, reporting selected quarters, different funds to strengthen different balance sheets then operating in the grey areas between legal and illegal.

    Eluding the authorities without breaking laws? Genius. Golf claps all around – well done you. Cue social reverence and another dollop of misplaced self-importance.

    Be very suspicious of companies and people who continually purvey good news it’s the first sign of a sociopath.

    As for this lot when the world wakes up GS alumnus on a CV will allow very little decent social mobility. There is only so much cheese, wine and pleasantries a man can endure.

    The stigma is emerging.

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  • Good call Neo-serf. An ex-GS employee, perhaps?

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