Tuesday, July 14, 2009

Question: Is Goldman Sachs an investment bank?

Goldman Sachs: A Special Case

Hold off celebrating the end of the financial crisis. Goldman's results may be more indicative of its unique spot in the industry than what's to come across the rest of the banking sector. The investment bank, which shrewdly navigated through the mess and even profited from it, has emerged as one of the strongest financial institutions around.

Posted by devo @ 10:42 PM (1302 views)
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16 thoughts on “Question: Is Goldman Sachs an investment bank?

  • A rhetorical question?

    Let’s see.

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  • Remember this? I do.

    From the New York Times, September 21, 2008.

    Shift for Goldman and Morgan Marks the End of an Era

    Goldman Sachs and Morgan Stanley, the last big independent investment banks on Wall Street, will transform themselves into bank holding companies subject to far greater regulation, the Federal Reserve said Sunday night, a move that fundamentally reshapes an era of high finance that defined the modern Gilded Age.

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  • “The firms requested the change themselves, even as Congress and the Bush administration rushed to pass a $700 billion rescue of financial firms. It was a blunt acknowledgment that their model of finance and investing had become too risky and that they needed the cushion of bank deposits that had kept big commercial banks like Bank of America and JPMorgan Chase relatively safe amid the recent turmoil.”

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  • It also is a turning point for the high-rolling culture of Wall Street, with its seven-figure bonuses and lavish perks for even midlevel executives. It effectively returns Wall Street to the way it was structured before Congress passed a law during the Great Depression separating investment banking from commercial banking, known as the Glass-Steagall Act.

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  • By becoming bank holding companies, the firms are agreeing to significantly tighter regulations and much closer supervision by bank examiners from several government agencies rather than only the Securities and Exchange Commission. Now, the firms will look more like commercial banks, with more disclosure, higher capital reserves and less risk-taking.

    http://www.nytimes.com/2008/09/22/business/22bank.html

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  • Are you seeing tighter regulation and increased disclosure?

    Or are you seeing Goldman Sachs (and Lloyds and Barclays and…) laugh in our faces as we burn?

    Does anyone else see that this is VERY WRONG… Anyone?

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  • phdinbubbles says:

    Has malct regenerated again?

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  • 7. phdinbubbles said… Has malct regenerated again?

    Put your blinkers back on, there’s nothing for you in this thread.

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  • devo – are you making sure this post gets the yellow icon for >6 comments? (What is that anyway? A flame? A golden crown?)

    Look at the comments under the article to see how popular GS is in the US.

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  • @9. icarus

    It’s the blogging equivalent of breathing out slowly when angry.

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  • landofconfusion says:

    “(What is that anyway? A flame? A golden crown?)”

    A ‘Hot’ topic icon.

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  • “Does anyone else see that this is VERY WRONG… Anyone?”

    Suck it up devo. There’s nothing you can do about it. Maybe Bellwether’s approach is right (http://www.housepricecrash.co.uk/newsblog/2009/07/blog-meredith-whitneys-sees-gs-up-short-term-24339.php)

    If you have the time (about 25 mins), Max Keiser’s last ‘On the Edge’ show had some interesting things to say about GS:
    http://www.youtube.com/watch?v=rtIEGvtwHFI

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  • Devo, the Glass-Steagall separation of bank types was surely purely academic or high street banks would’ve been more stable over the last few years? Or not? Or, was the separation more useful once upon a time, and then sidelined?

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  • Devo, the Glass-Steagall separation of bank types was surely purely academic…………

    I neither know, nor care.

    However, I do know that my children’s money has, is and will be used to keep the banks afloat ( and pay the immoral bonuses).

    Shut ’em all down.

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  • End of the Financial Crisis, the Great Lie of 2009.
    Goldman Sachs has total credit risk to the tune 1048 per cent of its capital, or over TEN times its capital. They are in the brown & slushy to their necks.
    http://www.marketoracle.co.uk/Article11825.html

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  • With you on this one Devo, when do we get change. Bankers bonuses, politicians/civil servants expenses and pensions – ie taxpayer debt. We need someone to lead us out of this.

    Devo . . . it could be you!

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