Use access key #2 to skip to page content.

TMFAleph1 (95.10)

Inside Goldman's Money Machine

Recs

8

November 06, 2009 – Comments (7) | RELATED TICKERS: BRK-B , GS , JPM

Goldman Sachs (NYSE: GS) filed its quarterly report with the SEC on Wednesday, giving investors a peek at just how consistently profitable its trading activity was in the third quarter... [more]

7 Comments – Post Your Own

#1) On November 06, 2009 at 3:51 PM, russiangambit (29.35) wrote:

Right, just 1 day of a loss in a quarter. And people say you cannot predict the future. Obviously, if you are GS  - you can. With such powers, I wonder why they limit themselves to financial markets.

Report this comment
#2) On November 06, 2009 at 3:56 PM, russiangambit (29.35) wrote:

And don't forget 0.92% long term interest rate, with inflation at about 2% people are paying Goldman to take their money. What is up with that?

Report this comment
#3) On November 06, 2009 at 4:02 PM, TMFAleph1 (95.10) wrote:

It's not really about predicting the future. Goldman derives much of these profits from market-making activities -- they're earning a spread by providing liquidity to their clients. That is not riskless, of course, but we can assume they are pretty well hedged. If they were engaging purely in proprietary, directional trades, that would be another matter altogether and we would expect to see much greater volatility in results.

Report this comment
#4) On November 06, 2009 at 4:05 PM, TMFAleph1 (95.10) wrote:

@russiangambit,

The Wall Street Journal's Heard on the Street column surmises that Goldman's super-low rate could be the result of fixed-to-floating interest rate swaps.

Cheers,

AD

Report this comment
#5) On November 06, 2009 at 4:07 PM, russiangambit (29.35) wrote:

Sure, there is an explanation for everything. But when somebody , just one company, beats the odds all the time and nobody else is able to replicate that, you know what it means? Either they are doing something illegal and hiding it or they are a monopoly and that is illegal too.

Report this comment
#6) On November 06, 2009 at 4:25 PM, TMFAleph1 (95.10) wrote:

@russiangambit,

Well, investment banking has been an oligopoly for many years now and the credit crisis has only reinforced that (disappearance of Lehman, absorption of Bear and Merrill).

A good illustration of the oligopolistic nature of the industry is the fees companies pay to go public, which have remained stubbornly high for decades (approximately 6-7% currently!).

Report this comment
#7) On November 06, 2009 at 4:40 PM, russiangambit (29.35) wrote:

> Well, investment banking has been an oligopoly for many years now and the credit crisis has only reinforced that (disappearance of Lehman, absorption of Bear and Merrill).

Right, that is where I was going with it. They are pretty much a monopoly now. And whatever agency is supposed to regulate that is looking the other way.

> A good illustration of the oligopolistic nature of the industry is the fees companies pay to go public, which have remained stubbornly high for decades (approximately 6-7% currently!).

It sounds very much like the realtor's business model -)), which I equate to price collusion, but somehow it is legal too.

Report this comment

Featured Broker Partners


Advertisement