Goldman’s Gets 25% to 35% of Revenue From Derivatives

No wonder Goldman has resisted derivatives regulation so fiercely. A huge percentage of the firm’s revenue comes from these activities (hat tip R.W.). The Wall Street Journal is reporting that as much as a third of the firm’s revenue came from derivatives last year.

Goldman Sachs Group Inc. told the Financial Crisis Inquiry Commission that 25% to 35% of its revenue comes from derivatives-based businesses, according to a person familiar with the situation…

A memo sent to the panel Thursday night by the New York company included an analysis of derivatives-based revenue at Goldman from 2006 through 2009, said the person familiar with the matter. Based on the percentages provided by Goldman, such businesses generated $11.3 billion to $15.9 billion of the company’s $45.17 billion in net revenue for 2009.

Question: why is a report this important buried in late Friday news? Wouldn’t people like to know what was at stake for these firms regarding financial reform? Another question: why the range of figures? Surely Goldman knows how much revenue it generates from specific activities.

The analysis was based on a "best guess" of the main type of trading on each Goldman trading desk at the firm, said the person familiar with the matter.

So there you have it – a "best guess." If it’s good enough for the commission, then it must be good enough for us. Goldman has received a major slap on the wrists in the form of a $550 million settlement with the SEC. But now, its back to making money – 25-35% in derivates.

Clearly, this inquiry commission is just a charade.

Also see how Goldman Sachs May Spin Off Proprietary Trading This Month to get around the Volcker rule legally and continue business as usual.

Comments are closed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More