Word: goldman
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Dates: during 2000-2009
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Read "Can Morgan Stanley and Goldman Sachs Go It Alone...
...Goldman said that much of its increased trading was to execute client orders, and not trades the bank was making solely on its own. During a conference call with analysts and investors, Goldman CFO David Viniar said that most of Goldman's trading profits came from such liquid investments as Treasury bonds and not in the trickier markets for subprime mortgage bonds or credit default swaps, which can be harder to buy and sell. Goldman said it made very little money from CDS contracts it settled with AIG, but declined to comment exactly how its trading profits were generated...
...economy worsened, those demands have faded. AIG, Merrill Lynch and other Wall Street firms have come under fire for paying out rich bonuses to executives despite receiving billions in government assistance. In response, lawmakers have tightened executive compensation rules for banks that have received TARP funds. While Goldman's profits are sure to raise eyebrows, it is not clear that it did anything wrong...
...what is clear is that Goldman is taking significant trading risks, opening the firm up to the possibility of big losses at a time when regulators and lawmakers are trying to reduce the dangers of the nation's financial system, not increase them. At the end of the first quarter, Goldman's measure of value-at-risk, which tracks how much the financial firm could lose in one day, rose to $240 million. That was up over $80 from just over a year ago, and it is 10 times the risk the firm used to take on a daily basis...
...Indeed, trading has always been a big portion of Goldman's business. But it has become even more so. The firm generated nearly half of its revenue, or $5.7 million, from trading in the first three months of this year. That's up from about 35% on average over the past four years. It has yet to be seen whether other firms have upped their trading bets as well. Goldman was the first of the major financial firms to report earnings in the first quarter. Citigroup and J.P. Morgan have said that they, like Goldman, made money in the first...