Thursday, April 13, 2006

Company tidbits....

Goldman "Gets It" (Goldman Sachs)

Fascinating tidbit about Goldman Sachs (and its high end business areas). Good insights provided in the article in terms fo Goldman's approach to things.

The new world of trading is not about flipping stocks for nickels and dimes ahead of client orders, or holding corporate bonds in inventory and selling them at a markup. It is about credit-default swaps and total-return swaps and volatility arbitrage, and all sorts of other investment exotica designed to give huge players even the slightest edge. Yet, only a sliver of this activity involves Goldman traders wielding the firm's capital to initiate bets across markets. Most involves client-initiated transactions that the firm facilitates and, increasingly, accomplishes by taking the other side with its own money.

Here is what Goldman is not, despite what alarmists say: It is not a huge hedge fund, or an impenetrable "black box," though the firm offers fewer details about its trading operations than some shareholders would like. Nor is it a leveraged proxy for stock prices, or a surfer of the yield curve, or a mere play on oil prices through its commodities business. Goldman is not a place where folks with MBAs and nice golf strokes simply roll the dice hoping for a seven. No gambler, it is much more like "the house."


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