Lloyd 'God's work' Blankfein is still at it. Must be that alleged sense of humor of his. Or something.
At least GM's Charlie Wilson had the good sense to add a "and vice versa" to his original quote about "what's good for America". Not this guy. http://blogs.reuters.com/felix-salmon/2009/12/01/goldmans-hubris-2/ --------------------------------------------------snip In my own conversations with Goldman Sachs flacks, they tend to be adamant that Goldman in fact does no proprietary trading at all: everything they do is part of serving clients, there’s no separate prop desk, and yes although the trading desk makes money, it does so by enhancing the prices and liquidity that Goldman can offer to clients. So it’s interesting that Blankfein admits to McLean that Goldman does have purely proprietary profits, even if they’re only 10% of the total. The fact is that what constitutes a proprietary trade is very ill-defined, and the argument rapidly devolves into semantics. But again, insofar as Goldman does have a prop-trading business, it’s definitely the kind of thing which Adair Turner would consider “socially useless”. That said, Goldman’s clients really do value what it offers: While some say they do business with Goldman because the firm’s omnipresence means they have to, there is another reason, which even its most bitter critics concede: Goldman is better. Why is that?, I ask a hedge-fund manager who has just finished his own heated explanation about how he doesn’t trust Goldman. “I can’t really tell you why it’s better. It’s just better,” he says. “It’s six p.m. in New York City, and Goldman will figure out how to get the right person in Hong Kong—a guy we’ve never spoken to—on the phone to walk us through exactly what we want to know. He’ll be fully knowledgeable.” He laughs. “Try the same thing with Citi. They can’t even figure out what they know, let alone how to take advantage of it.” It’s just that Goldman’s clients tend to be people like this — hedge-fund managers who themselves are pretty socially useless. When it comes to ordinary taxpayers, the benefits we get from Goldman seem much smaller. Goldman’s press releases about its spectacular earnings never mention government assistance of any kind. In June, the firm paid back the $10 billion in tarp funds it had taken. Taxpayers got a 23 percent return. As for the $21.6 billion in funds guaranteed by the F.D.I.C. that Goldman still has outstanding, a recent Congressional report estimates that it will save Goldman $2.4 billion over the life of the debt. But Cohn argues that that is actually costing the firm, in fees to the F.D.I.C. and interest, because it is excess liquidity. (When I repeat that to another Wall Streeter, he closes his eyes and says, “Please tell me Gary didn’t say that.”) -raghu. -- "I used to do drugs. I still do drugs. But I used to, too." - Mitch Hedberg _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
