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Tue Jan 8, 2013, 10:56 AM

Secret Goldman Team Sidesteps Volcker After Blankfein Vow

Source: Bloomberg News

Sitting onstage in Washington’s Ronald Reagan Building in July, Lloyd C. Blankfein said Goldman Sachs Group Inc. (GS) had stopped using its own money to make bets on the bank’s behalf.

“We shut off that activity,” the chief executive officer told more than 400 people at a lunch organized by the Economic Club of Washington, D.C., slicing the air with his hand. The bank no longer had proprietary traders who “just put on risks that they wanted” and didn’t interact with clients, he said.

That may come as a surprise to people working in a secretive Goldman Sachs group called Multi-Strategy Investing, or MSI. It wagers about $1 billion of the New York-based firm’s own funds on the stocks and bonds of companies, including a mortgage servicer and a cement producer, according to interviews with more than 20 people who worked for and with the group, some as recently as last year. The unit, headed by two 1999 Princeton University classmates, has no clients, the people said.

The team’s survival shows how Goldman Sachs has worked around regulations curbing proprietary bets at banks. Former Federal Reserve Chairman Paul A. Volcker singled out the company in 2009, saying it shouldn’t get taxpayer support if it focuses on trading. A section of the 2010 Dodd-Frank Act known as the Volcker rule, drafted to prevent banks from taking on excessive risk, limits short-term investments made with firms’ capital.



Read more: http://www.bloomberg.com/news/2013-01-08/secret-goldman-team-sidesteps-volcker-after-blankfein-vow.html

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Reply Secret Goldman Team Sidesteps Volcker After Blankfein Vow (Original post)
dipsydoodle Jan 2013 OP
Demeter Jan 2013 #1
Turbineguy Jan 2013 #2
leftyohiolib Jan 2013 #3

Response to dipsydoodle (Original post)

Tue Jan 8, 2013, 10:59 AM

1. How can you tell when a bankster is lying?

He's still breathing. (Goes for either meaning of "lying").

Because otherwise, he's dead.

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Response to dipsydoodle (Original post)

Tue Jan 8, 2013, 11:32 AM

2. Maybe those drone strikes against all those Al Qeada guys

are just practice.

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Response to dipsydoodle (Original post)

Tue Jan 8, 2013, 11:45 AM

3. meaning they spun it off and is now being done by a subsidiarie

 

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