11–20 of 33 posts
this is fantastic news, though i guess it makes sense. goldman attracts the most talented folks just by winking at them.
Goldman's secret to "success" in this instance is the freshly changed accounting rules (see my comment elsewhere) and in the recent past has been the patronage of ex-Goldman Sachs CEO and now treasury secretary Paulson.
this is fantastic news, though i guess it makes sense. goldman attracts the most talented folks just by winking at them.
There's an old joke that a new MD at Goldman is looking to hire 5 new analysts for his department. The new MD goes to his old boss and asks, "What should I do? I have 10 resumes from 10 great candidates, who all went to Ivy League school, graduated with perfect GPAs and all interviewed very well. How do I decide who to hire?" The old boss asks to see the pile of resumes, and gives them a quick glance. He then shuffle…
Accounting regulations were changed last week [1] so that banks do not have to "mark to market" in "inactive markets" anymore. Since Goldman Sachs is now a bank holding company, they don't have to do this either. What is now a ~2B profit would probably have been a far greater loss by the old rules. [1] http://www.reuters.com/article/governmentFilingsNews/idUSN09...
Earlier quoted context omitted.
Interestingly, they're sitting on over $100B cash and cash equiv. http://finance.yahoo.com/q/bs?s=GS&annual
With accounts payable of $257B, so the cash doesn't really mean that much and a net ~64B assets-liabilities and all those numbers are from Nov '08
As you watch democracy die to thunderous applause, remember to subtract the $10 billion of government funding and the $13 billion looted from the taxpayers through AIG face-value swap repayments.
this is fantastic news, though i guess it makes sense. goldman attracts the most talented folks just by winking at them.
Goldman's secret to "success" in this instance is the freshly changed accounting rules (see my comment elsewhere) and in the recent past has been the patronage of ex-Goldman Sachs CEO and now treasury secretary Paulson.
Presumably if Goldman Sachs' success is solely due to changes in accounting rules, we will see most other financial firms follow in their footsteps.
As you watch democracy die to thunderous applause, remember to subtract the $10 billion of government funding and the $13 billion looted from the taxpayers through AIG face-value swap repayments.
At least the first sum you mentioned does not add to profit.
Earlier quoted context omitted.
At least the first sum you mentioned does not add to profit.
You are correct, sorry. That's tier capital, right?
However, the addition of a new liquidity source on the balance sheet in general has no direct effect on the income statement. Borrowing money is not income. Indirectly, it will have an effect through the interest expense owed to the owner of the liability and the interest income earned from the additional cash. However, the net interest income or expense is likely to be much less than the $10 billion face value of the liability.
A caveat: I didn't read through their financial statements, and I refuse to do so unless someone will pay me.
Earlier quoted context omitted.
You are correct, sorry. That's tier capital, right?
I never had bank risk-adjusted capital regulations memorized, and it is much too complicated for me to care to relearn now. However, the addition of a new liquidity source on the balance sheet in general has no direct effect on the income statement. Borrowing money is not income. Indirectly, it will have an effect through the interest expense owed to the owner of the liability and the interest income earned from the…
Upvoted for badass mercenary attitude. You should try consulting! :D
Accounting regulations were changed last week [1] so that banks do not have to "mark to market" in "inactive markets" anymore. Since Goldman Sachs is now a bank holding company, they don't have to do this either. What is now a ~2B profit would probably have been a far greater loss by the old rules. [1] http://www.reuters.com/article/governmentFilingsNews/idUSN09...
It would not have been a far greater loss under the old rules, that much is clear from reading the balance sheet and disclosure of the relatively small size of legacy assets (the assets that would be impacted by different marking methods). Income was driven in pure trade faciliation, good old fashioned buy low and sell high in the capacity of a financial intermediary.