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Goldman Sachs Responds To Zero Hedge

Tyler Durden's picture


A week ago we posed several questions to Goldman managing directors Lucas van Praag and David Viniar. Earlier today we received a broad response. We present it in its entirety for our readers. We will provide our counter-response shortly.



Dear Mr. Durden:

We read your comments about prop trading with interest.  I’ve addressed some of the points you raised, as well as the questions you directed to David Viniar and me.  The fact that I haven’t necessarily addressed all your points shouldn’t be construed as tacit acceptance of any of them.

1)      “Considering that Goldman must disclose a trading VaR, or value at risk on a quarterly basis, which over the past year has averaged over $200 million, one can back into actual prop capital and revenue”

Our VaR is primarily driven by client-related activity rather than proprietary activity.  Using VaR to “back into actual prop capital and revenue” would produce a meaningless result.

2)      “A month ago Zero Hedge presented a unique glance into Goldman’s prop trading activities courtesy of the 2008 tax filing of the Goldman Sachs Foundation”

Your premise wrong. There are tax and legal restrictions which prohibit the firm from trading on the Foundation’s behalf.

3)      “Goldman disclosed that it had $352.2 billion in fair value of principal trading instruments at September 30, 2009. How much of this is considered allocated to prop if this is in fact a distinct strategy from principal?”

The $352.2bn is the fair value of our trading assets, the vast majority of which consist of trading inventory we use to make markets for our clients.

4)      “Does the firm's FICC revenue line have absolutely no prop trading embedded within it? Goldman made $20 billion in FICC year to date: is none of this $20 billion due to capital at risk, or is it all due to wide bid//ask spreads? ”

We’ve said publicly that prop trading represents approximately 10% of this year’s reported net revenue.  Some of that revenue is reflected in the FICC line.

We generate the vast majority of our revenue in FICC by facilitating trading activity for our clients and nearly all our revenues in FICC are “due to capital at risk” (your phrase).  In periods  when capital withdraws from the market, bid-offer spreads tend to widen and we benefit to the extent that we are willing to commit capital and do so successfully. These activities necessarily involve risk taking.

Over the last 5 years, prop investing activities have represented about 12% of firmwide net revenues

5)      “What was the pro rata allocation to Goldman Sachs Foundation as a percentage of capital per each trading ticket in 2008? Does GSF have a dedicated trading silo within Goldman?”

As I said above, as required by law, the Goldman Sachs Foundation is managed separately. There are no “trading silos” dedicated to the Foundation’s activities

6)      “Why did the Goldman Sachs Foundation not participate in Goldman's prop CDS trades?”

See above. 

7)      “How much did Goldman's prop operations lose in 2008 trading Russell 1000 futures?”

The amount was de minimus.

8)      “How much did Goldman's prop operations lose trading all equity, credit and commodity products?”

Not disclosed

9)      “When will Goldman clearly and distinctly segregate on its income statement the prop trading profit and losses, if these are in fact unique from "principal" trading as defined, and attach an MD&A to all relevant disclosure?”

Our proprietary activity is small in the context of the firm’s overall revenues and risk exposures.

10)     “Goldman is insinuating is that the firm's prop trading really carries virtually no risk.”

We don’t think any trading activity is risk-free. Risk is risk, and our job is to make sure individual risks are appropriately sized.

11)     “How do you define market risk?”

We define it as the potential for change in the market value of our trading and investing positions.

12)      “Do you take fixed price positions?”

Please explain your question.

13)     “Are you exclusively a hedger or do you ‘optimize’ your assets?”

Please clarify what you mean.

14)     “Do you have a risk policy?”

Yes.  We think of risk management as being one of our core competencies and it remains integral to our success as a firm. 

Our management team is active in risk management discussions across the firm and open discussion on the subject are encouraged.  By the way, we think fair value accounting is a critically important aspect of risk management.  Another important tenet of our approach to risk management is the independence of control functions from the business units

We also use a variety of approaches to monitor risk.  In addition to VaR, we use multiple stressed-based methodologies, including jump-to-default analyses, to quantify tail risks. 

16) “How do you monitor trading/hedging limits?”

Virtually all of our equity and fixed Income businesses receive VaR based risk-limits, aged inventory limits and balance sheet limits. The limits are reviewed by senior management and Risk Committee on a regular basis.

17)  “Mr. David Viniar, who recently said that the firm doesn't benefit from any implicit government guarantee. Goldman, as presented here, benefits directly from $21 billion in FDIC (taxpayer)-insured bond issues. How does Mr. Viniar reconcile this particular fact with his spurious claim?”

We don’t believe that we have any form of guarantee, implicit or otherwise, from anyone and we certainly don’t manage our business as though we do.

We issued debt under the FDIC’s Temporary Loan Guarantee Program and, like every other bank that issued debt under the program, paid the FDIC a significant amount of money upfront for the guarantee. We also pay interest to the investors who bought the notes. We stopped issuing debt under the program in March. The notes are not callable.

In the context of the firm’s approximately $900 billion balance sheet and hundreds of billions of dollars of funding, we don’t think any informed investor would believe that FDIC insurance on a small portion of our funding represented a “guarantee” of the firm.

Regards / Lucas van Praag


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Fri, 12/18/2009 - 17:49 | Link to Comment casino capitalism
casino capitalism's picture

As a former trader on wall street competing with GS, I can categorically say that GS is substantially a prop trading house.  They can come up with all kinds of mis-information to argue otherwise (big surprise).  But I have always wondered who would trade with them knowing full well that GS is totally conflicted and is essentially a big hedge fund.  The answer is they have a group of counterparties they are very close to who they partner up with on trades.  That is a common strategy.

Sat, 12/19/2009 - 05:21 | Link to Comment Chopshop
Chopshop's picture

thx for sharing your thoughts with us, casino capitalism.

am simply amazed that so few, if any ?? actual traders (outside of an obvious quant whose ZH handle is "quant-this" ... with experience on an "IB" / broker-dealer prop desk (forget even actual HF experience on a "real" desk) have yet to chime in with rather obvious comments / statements about the actual 'how' n the literal 'why' of such seemingly legit questions, which are little more than cursory questions from accountants who have absolutely no experience in / with actual trading while boasting all the experience in the world of auditing such firms / desks / outfits / operations - distinctly - after the fact.

... umm, basic barbell portfolio mgmt of short NG a fraction what ur long CL ... umm, similarly : TF losses as an off-setting byproduct of effectively hedging ES longs  ... umm, AIG solo-directional puts way the fuh OTM and synthetically-related / equivalent 'short' positions across a multitudinous litany of competing n confluent instruments which are extraordinarily managed across / within both a comprehensively strategic allocation as well as a highly technically-oriented tactical weighting ... so on n so forth.

umm, anyone else care to break THE cardinal rule of 85 broad / HFT / pokers (prime-brokers) / trading desks / 'stamford' (the literal epicenter of the hedgehog landscape), the PPT & the 'paper street soap company' and explicitly how real trading desks are structurally designed in terms of seating charts  / information flow diagrams across 3 concentric layers / spirals of undoubtedly formological construct, much like Dr. Paul MacLean's seminal work within his ground-breaking details into the structural evolution / physiological development / biological imperative within the triune brain, which is, percussion please ~~ Fibonacci.

on Fri, 11/20/2009 - 17:00

bold/ italics/ underline added to underscore the three basic rules of HFT as per Fight Club

Much like all complex growth organisms (ie. "formological") and in true Fib fashion, Stamford only follows 3 of the 8 rules (#'s 1, 2 & 7) found within the basement of the Paper Street Soap Company.

Tyler Durden: "Welcome to Fight Club. The first rule of Fight Club is: you do not talk about Fight Club. The second rule of Fight Club is: you DO NOT talk about Fight Club! Third rule of Fight Club: if someone yells "stop!", goes limp, or taps out, the fight is over. Fourth rule: only two guys to a fight. Fifth rule: one fight at a time, fellas. Sixth rule: the fights are bare knuckle. No shirt, no shoes, no weapons. Seventh rule: fights will go on as long as they have to. And the eighth and final rule: if this is your first time at Fight Club, you have to fight"

without giving away much, if any, of my own thunder, so as to retain the option of penning a direct reply (or four) to both GSCO as well as KPMG ( via Tyler's very well-said recounting of their rather basic questions ) ... i'll simply defer to my previous - rather crude, cursory, off-the-cuff - remarks about what GSCO legal would allow within a formal reply.

I / we have never been interested in making friends n simply continue to try to be as rigorous and actionable as we possibly can within our work / my personal opinions, which are exhaustively prefaced as such. 

that said:  can someone help me find where GSCO said anything about crude oil or natty ??

by Chopshop
on Sun, 12/13/2009 - 01:30

An outrageously good piece. just filthy really.

thank you, tyler.

actual 'journalism' which underscores the difference between detailing how to find a g-spot versus Ron Burgundy-esque "Discovered by the Germans in 1904, they named it San Diego, which of course in German means a whale's vagina ...." type bullshit. 

between you & marla, it must feel like an inverted / distorted version of omaha beach for ol goldilocks. like retaining all the lawyers with offices on the caymans so no one can ever sue you, 'they' know that they will win, eventually. but how more moons will it take? and will it just be some shallow figurative and self-declared victory of nothing but self-exoneration ... ?  anyhoo, great fjuc**** work, yet again.

by Chopshop
on Sun, 12/13/2009 - 03:36
#161810  ...  what a gorgeous 'random' number   

Assetman:  simply bc gsco will not allow a direct public gauntlet from TD himself to remain un-vanquished beyond Thursday's european open if not Tuesday mid-morning (10:40 est ish release); TD gave em more than enough lead time for a response to be vetted by legal by globex, today.

after two reads, about the only thing that goldie's legal ought not allow them to rather flippantly address will be the fact that natty (nat gas) plays bitch-boy bottom barbell hedge to wtic.  4.62x times long CL etc. versus 1x basic hedge on various nattie derivs. very simple by me, but in the absence of any actual reason provided (gsco legal won't any) it seems to my simple mind that such would be Occam's razor.

thanks again for the time / thought put into this excellent piece, TD.

Sun, 12/20/2009 - 15:20 | Link to Comment Anonymous
Mon, 12/21/2009 - 19:47 | Link to Comment Anonymous
Wed, 03/10/2010 - 17:32 | Link to Comment Anonymous
Fri, 12/18/2009 - 17:58 | Link to Comment chumbawamba
chumbawamba's picture

Under the hope and assumption that Goldman Sachs folks will be reading these comments:


I am Chumbawamba.

Fri, 12/18/2009 - 18:06 | Link to Comment drbill
drbill's picture

Subtle. I love it!! :-)

Fri, 12/18/2009 - 18:20 | Link to Comment geopol
geopol's picture


You need come out of your shell


Fri, 12/18/2009 - 23:20 | Link to Comment shadowboxer
shadowboxer's picture

 ...i'd rather put GS in a hole, ...collectively,  ...metaphorically speaking of course.

Sat, 12/19/2009 - 13:36 | Link to Comment Anonymous
Sun, 12/20/2009 - 17:57 | Link to Comment chumbawamba
chumbawamba's picture

The GS harpies have finally arrived.

I am Chumbawamba.

Mon, 12/21/2009 - 20:00 | Link to Comment BoeingSpaceliner797
BoeingSpaceliner797's picture

Easy CW,

Remember, GS is doing "God's work" and we are all the more fortunate for that.

Tue, 12/22/2009 - 07:53 | Link to Comment Anonymous
Fri, 12/18/2009 - 18:57 | Link to Comment Anonymous
Fri, 12/18/2009 - 19:57 | Link to Comment Anonymous
Sun, 12/20/2009 - 18:27 | Link to Comment Bob
Bob's picture

If I get your chi, you'd like to see a change in the dynamics of this web community.  I'm always for change, just the way I am.  A change from anonymous posting would be one (though I grok that razor's edge from management's perspective), but I strongly believe that if you register and develop a persona here, you could really have impact.  Whatever your schtick.  Forums are like that. 

What's with all the fucking anons? 

Mon, 12/21/2009 - 17:06 | Link to Comment Anonymous
Fri, 12/18/2009 - 20:33 | Link to Comment Unscarred
Unscarred's picture

I agree, #169324, one hundred percent.

Fri, 12/18/2009 - 20:57 | Link to Comment deadhead
deadhead's picture

I don't always agree with Chumba's words or approach but in this case, what is the problem?

1. he asks for truth.

2. he tells them to stop lying. his postulation is that they are lying and he is certainly not alone in this regard.

3. he reiterates a request for truth.

4. he suggests that Goldman is a parasite.  this is a very reasonable statement.

Perhaps anger shows through, at least it seems that way to me.  There are millions of American citizens (as well as other countries in the world) that have anger towards Goldman Sachs.  Chumba simply is reflecting a widely held view.  The use of the "f" word is troubling to some but to those people I would simply say "get a fucking life" and take a moment to read some background on the right to free speech.


as to "a distraught person"

People probably said that about James Madison, George Washington, Ben Franklin certainly, clearly Abraham Lincoln and I'm sure we could come up with several thousand more names.

American citizens know they are getting screwed and they are becoming angrier.  Get used to it.

Fri, 12/18/2009 - 22:20 | Link to Comment Anonymous
Fri, 12/18/2009 - 23:51 | Link to Comment deadhead
deadhead's picture

169532...your response just seems a bit incoherent to me. 

I parsed Chumba's statement, which is mostly about truth or lack thereof.  One of my pieces was an assumption on my part (perhaps incorrect) that perhaps the reason for your negative response was the "f" word. I think you are saying that this is not issue but am not sure. I have no idea how you come up with the "sobbing his freedoms are denied..."

Frankly, your response lacks content. 


Sat, 12/19/2009 - 01:13 | Link to Comment Tommy
Tommy's picture

Sometimes the right thing to do is call an a$%hole, an asshole.

Certainly, GS has been most vulgar themselves.

Sat, 12/19/2009 - 03:30 | Link to Comment Unscarred
Unscarred's picture

I'm down with "Vulgar..."

Mon, 12/21/2009 - 01:37 | Link to Comment theadr
theadr's picture
Traders say "fuck you" more than any other profession.  This includes the traders on GS prop trading desk.  Thus, F-U.  
Sat, 12/19/2009 - 02:21 | Link to Comment Anonymous
Sat, 12/19/2009 - 03:36 | Link to Comment Unscarred
Unscarred's picture

I'll say this...  When used effectively, "fuck" is perhaps the greatest word of the English language.  "Fuck" commands full attention, saves time, and gets shit accomplished.  If you're not strategically using it at least 25 times daily, you're losing out.

Unfortunately, some fuck-heads abuse it's fucking power and fuck it all up for the rest of us sorry fucks.

Sat, 12/19/2009 - 11:27 | Link to Comment BRAVO 7
BRAVO 7's picture


For  Unlawful  Carnal  Knowledge










Sat, 12/19/2009 - 12:24 | Link to Comment Unscarred
Unscarred's picture


Sweet.  We have the ability to junk our own comments.  (And sorry to deadhead, et al for getting carried away)

I'm always amazed how these posts inevitably play themselves out.  The most enlightening posts always elicit the most ridiculous comments, creating the most disturbing reactions...  And I've NEVER seen this many comments marked as "junk" on any post, excluding my own contributions to the junk heap.


Mon, 12/21/2009 - 15:59 | Link to Comment Anonymous
Sat, 12/19/2009 - 16:10 | Link to Comment Anonymous
Sun, 12/20/2009 - 08:13 | Link to Comment Anonymous
Sun, 12/20/2009 - 18:18 | Link to Comment Bob
Bob's picture

+10, I think. 

As my uncle used to say, "fucking is what you do to your wife while she's making love to you".

Could you elaborate on that a little more?

Sat, 12/19/2009 - 16:45 | Link to Comment dark pools of soros
dark pools of soros's picture

when you say the "f" word towards GS.. you must mean thou shalt not condemn the Fed


why not just ask GS what their risk strategy would be if there wasnt a federal reserve  anymore 

Sun, 12/20/2009 - 01:15 | Link to Comment FischerBlack
FischerBlack's picture

LOL, seriously, shut up #169532, if that is your real name. You obviously don't know the first thing about your own Constitutional rights, never mind lecturing others on theirs. There's a time for civility. Walking in on a violent rape is not one of them.


Mon, 12/21/2009 - 20:05 | Link to Comment BoeingSpaceliner797
BoeingSpaceliner797's picture

There's a time for civility. Walking in on a violent rape is not one of them.


Very well put. 

Fri, 12/18/2009 - 22:47 | Link to Comment Unscarred
Unscarred's picture


[edit] and credibility.

Fri, 12/18/2009 - 23:00 | Link to Comment Bolweevil
Bolweevil's picture

I'm with the hippy on this one, people are gonna speak their minds as they see fit. It's up to the reader to interpret accordingly. Mr. Wumba's points are valid and by no means detract from the unique relevance (and quality) of ZeroHedge or it's core contributors. Thanks for taking the time you crazy Dutchman.

Fri, 12/18/2009 - 23:46 | Link to Comment Unscarred
Unscarred's picture

I agree with everything you have said, but I would carry that thought one step further.  Given that #169324 specified Goldman Sachs as the audience, the question he was asking is how well a statement that extreme will permeate with GS brass, given that they obviously will be paying close attention to the ensuing comments to a contribution from their own managing directors:

Sat, 12/19/2009 - 00:32 | Link to Comment cougar_w
cougar_w's picture

[they obviously will be paying close attention to the ensuing comments]


1) It's not at all obvious.

2) They are roundly despised, so the comment was within a standard deviation of the normal temperature here.

3) It would not hurt their corporate souls to read something shocking, and might do them some good. Though I doubt it because they seem well beyond redemption.



Sat, 12/19/2009 - 00:59 | Link to Comment Unscarred
Unscarred's picture

You're right.  It may not be obvious.  I assumed that they would pay attention to something an MD says to a media outlet that has been overly critical of them, given the incredible PR backlash they have suffered recently.

They may have just replied to Tyler's inquiry as a giant "go fuck yourself."

I would, however, disagree that the comment was within a standard deviation of the normal temperature here, and counter that the comment was actually about par for the course at ZH re: Goldman.

Lastly, I do not think that their corporate souls are hurting whatsoever.  They sold them long before they ever made partner.

Sat, 12/19/2009 - 01:16 | Link to Comment estaog
estaog's picture

[they obviously will be paying close attention to the ensuing comments]

I have a feeling Goldman Sachs brass have other things to concern themselves that are more important than Chumbawamba's internet-economist-superhero ravings on ZH.

Sat, 12/19/2009 - 01:24 | Link to Comment deadhead
deadhead's picture

Ummm, not sure there myself estaog...they are very concerned about these types of comments.  they have the hatred coming at them from the financial types like ZH and associated community and importantly Obama's base, which is ready to rip his stones off because he hasn't "changed" the financial world's dominance of the USA.

once his base is off the health care reform clusterfuck, they will increasingly go after the wall st, banking community.   just read huffpo everyday, it is very, very clear.  btw, my postulation is that huffpo is ground zero for the obama base and I believe that is an accurate call.


Sat, 12/19/2009 - 11:06 | Link to Comment Anonymous
Sat, 12/19/2009 - 14:34 | Link to Comment Anonymous
Sat, 12/19/2009 - 19:01 | Link to Comment Anonymous
Sun, 12/20/2009 - 10:12 | Link to Comment Bob
Bob's picture

For a supplemental reading of US History, I strongly recommend Howard Zinn's A People's History of the United States

Much shorter and more entertaining, while preserving the spirit and basic substance of the book, is his video documentary The People Speak ( .  It's been running on The History Channel for the past week. 

Little there to please the flag wavers but, hey, that's the shit we're all fed all the way through school to make us the exceptional and patriotic people we are.  Very thought provoking stuff.  Lots of shit even most liberals don't know.  Reminds me of Jekyll Island in that respect. 

PS  Anon, even I was tempted to "junk" your post, if only for the poor judgment demonstrated in your slam against anyone and everyone in the trading community, but I passed on the grounds of free speech and diversity of views.  It strikes me, however, that the remarkable tolerance here for such comments strongly suggests that your basic thesis is incorrect, or at best only marginally correct,  wrt this community.  Why not show some respect for that and the people who are providing it?  I suspect you will be more persuasive that way (if persuasion is your goal.) 

Mon, 12/21/2009 - 16:49 | Link to Comment Yossarian
Yossarian's picture

I recommend reading this book for a laugh at the completely biased socialist undertones.  I have it on my bookshelf- I think I will review it again when I get home just to remember why I hated it so much...

Sun, 12/20/2009 - 10:57 | Link to Comment chumbawamba
chumbawamba's picture

So the logic of your comment is that since someone else is going to ass-rape the markets if GS wasn't there, may as well turn a blind eye and let GS continue to ass-rape the market.

It would be really nice to know how many of these comments are being posted from GS servers.

I am Chumbawamba.

Sat, 12/19/2009 - 16:52 | Link to Comment dark pools of soros
dark pools of soros's picture

the only real change we got was in '82 when zinc replaced real copper pennies..we are all still hitting the snooze button

Sat, 12/19/2009 - 11:09 | Link to Comment macfly
macfly's picture

Very good call, DH. I have voted Dem all my life, but am totally disillusioned with them in particular, and Washington in General at this point. I now see the two party system as a Punch and Judy show that is bought and paid for by Wall St using the Fed, which was set up to allow the old 'money masters' of the nineteenth century to maintain control of our economy in 1916. (Rothbard/Mullins/Griffin etc etc) Politics in this, our once great country, has become so rotten and foul as a result of the dollar drip feed lobby system that controls/determines success in the very expensive game of politics, that I think my change of voting allegence will not an isolated one. I believe that anyone who cares to look will see that we have simply swapped the corruption of the guns and oil mafia that was the Haleburton/Rockerfeller White House for a Wall Street/GS mafia. Honestly to me it appears both have exactly the same intent, to steal as much as they can from the American people for their respective sponsors. I will be voting for the Libetarians next time out, because they are the only ones who are speaking from a place of real concern for us the people, not their sponsors. I doubt they'd win, but my vote will be my protest. I do not believe in revolution, George Orwell described the results perfectly in Animal Farm, but I do hope for change, real change, and not just the change of which sponsors get to rape us.

Sat, 12/19/2009 - 15:01 | Link to Comment Anonymous
Sun, 12/20/2009 - 20:19 | Link to Comment Bob
Bob's picture

We've talked about this for many years, with no effect. 

But it looks to me like we've reached the point where talk no longer matters--the public will act if given appealing, well-marketed alternatives next time around.  I know "progressives" won't be voting for the Dem incumbent Barry O again.  Say what you like about the fatal compulsion for infighting among democrats (always snatching defeat from the jaws of victory), but the operative element here is that the genuinely liberal community doesn't forget, doesn't gratuitously forgive, and does not fuck around when its good faith has been so ruthlessly betrayed and they themselves so deeply shamed.  There will be a viable "progressive" third party candidate.

Palin's probably running, Republican or not.  Paul will make another go of it.  Bloomberg may finally step in.  I think we've reached the point where the two party system has finally set in motion its own demise.   

Sun, 12/20/2009 - 18:01 | Link to Comment Bob
Bob's picture

As a member of that "disaffected" base, I gotta say that huffpo is essentially a quasi-MSM of that community.  I don't often go there, but am glad to know that they are so on the case.  Health care is indeed the issue that breaks the bond of hope between "progressives" and Barry O, placing his Wall Street bondage into full, gory focus as the final measure of the man.

Largely liberal MSM outlet MSNBC has taken on this pivotal issue of healthcare reform in a major way, characterizing Barry as a silently impotent "leader" who urges the sale of the American public--particularly the middle class--into literal slavery with mandatory purchase of health insurance at rates set by private insurers "competing" against themselves (no public option) and failure to purchase said insurance constituting a crime.  Figures cited are $9,000 per year for a family of 5 with household income of $51k.  Even Howard Dean has gone on a media barnstorming tour against the Senate bill. 

Most interesting thing I've seen, however, was Keith Olbermann's on-air commentary on Wednesday which he concluded with the pledge that if the current bill is passed without public option but with a mandate, he will not purchase said insurance (he is not covered by a corporate group policy):

I call on all those whose conscience urges them to fight, to use the only weapon that will be left to us if this bill becomes law. We must not buy federally mandated insurance if this cheesy counterfeit of reform is all we can buy.


No single payer? No sale. No public option? No sale. No Medicare buy-in? No sale. I am one of the self-insured, albeit by choice. And I hereby pledge that I will not buy this perversion of health care reform. Pass this at your peril, Senators, and sign it at yours, Mr. President. I will not buy this insurance. Brand me a lawbreaker if you choose. Fine me if you will. Jail me if you must.   (video at )

Heavy shit for a prime-time MSM cable network anchor, no?

Yes, the "progressive left" has dramatically parted ways with Barry O and, given who he's revealed himself to be over the past year, the differences will remain irreconcilable.

In his current capacity as corporate puppet he dances on as the most gifted of performers, but for the remainder of his term he is little more than a Dead Man Walking wrt the base of voters most responsible for putting him into office.   


Mon, 12/21/2009 - 01:58 | Link to Comment theadr
theadr's picture

Keith is just talking shit.  He'll just continue to self insure and buy the cheapest damn policy his accountant can find to meet the requirement -- insured pays 1st $250k per year or such.

Mon, 12/21/2009 - 11:24 | Link to Comment Bob
Bob's picture

Maybe.  I can certainly relate to your doubts.  But I think it's a remarkable event in itself.  When's the last time you heard a mass call to "civil disobedience" / unlawful collective rebellion from a man in such a position? 

I think it tells us something important about the mood of the country.  It ain't just the tea baggers who are fed up.  Should be interesting to follow this.   

Sat, 12/19/2009 - 18:32 | Link to Comment Anonymous
Sun, 12/20/2009 - 20:20 | Link to Comment chumbawamba
chumbawamba's picture

You do realize that that's a picture of Max Hardcore and the name is "goatse" spelled backwards, right?  Of course, you're from GS, you know everything!  Silly me.

I am Chumbawamba.

Fri, 12/18/2009 - 21:04 | Link to Comment Anonymous
Fri, 12/18/2009 - 20:39 | Link to Comment Anonymous
Fri, 12/18/2009 - 21:10 | Link to Comment Jesse
Jesse's picture


Aw Jeez, its the internet....

Comments have no credibility.

Get real.

Fri, 12/18/2009 - 21:20 | Link to Comment dnarby
dnarby's picture


You haven't seen anything yet, trust me.

Sat, 12/19/2009 - 01:12 | Link to Comment chumbawamba
chumbawamba's picture

Oh please.  What a bunch of whiny douchebags.  Did  I offend your refined sensibilities?  Good.  Fuck you.  Like I'm expressing anything that hasn't already been expressed a million times here.  And like these assholes deserve any better.  This is Goldman Sachs we're talking about, not an orphanage.

America is doomed precisely because Americans seemingly have a proclivity to enjoy getting fucked in the ass by monied elites.  And then defending them over it.  What a sad, sad commentary.

I am Chumbawamba.

Sat, 12/19/2009 - 02:27 | Link to Comment Anonymous
Sat, 12/19/2009 - 03:47 | Link to Comment WaterWings
WaterWings's picture

Not that I've always avoided using profanities, even in this f****** format, but less is always better, considering the wide audience, but your perspective should be multiplied, exponentially!

Sat, 12/19/2009 - 04:40 | Link to Comment Unscarred
Unscarred's picture

"...Americans seemingly have a proclivity to enjoy getting fucked in the ass by monied elites."

The Rolling Stones wrote a song about it:

Sat, 12/19/2009 - 07:54 | Link to Comment mojine
mojine's picture

+++ Chumba - Anyone who is not angry is not paying attention!

Sat, 12/19/2009 - 10:01 | Link to Comment heatbarrier
heatbarrier's picture

I don't even know what you're talking about, Nicky.

Sat, 12/19/2009 - 11:18 | Link to Comment Anonymous
Sat, 12/19/2009 - 13:54 | Link to Comment Winston Smith 2009
Winston Smith 2009's picture

They aren't too prissy or weak.   Until now, it has been their ignorance and apathy since the bread and circuses trickling down from the (mostly) legalized theft has been enough to buy them their new SUV, HDTV, etc.   As economic conditions continue to worsen, that will change.

I've long believed that the only factor on the economic side that distiguishes the US from a banana republic is that the extreme wealth of the US allows rampant theft (wealth obtained without producing anything of remotely equal value) with few noticable consequences for the plebes.  That will probably end soon.  Then the pitchforks will come out and many in the financial sector and other crony "capitalists" will have to retreat to their private islands.

Sat, 12/19/2009 - 15:03 | Link to Comment Hammer59
Hammer59's picture


Sat, 12/19/2009 - 18:49 | Link to Comment Anonymous
Sun, 12/20/2009 - 10:31 | Link to Comment Bob
Bob's picture

"GS . . . not an orphanage."  That's some really fucking funny shit, man! 

Gotta say that, as profane and often cryptic as your shit is, you are concise.  Agreed that the language of real people is powerful shit and fuck is right at the top of that list. 

Some of us would say that we gotta frantically clean up the place because company's coming, but I agree with you here.  GS knows exactly who the fuck we are . . . and if they don't like our house the way it is, they can fuck off.  It's the least of their worries--or ours. 

I am not fucking Chumbawamba. 

Mon, 12/21/2009 - 11:52 | Link to Comment TumblingDice
TumblingDice's picture

And after some scrolling I encounter this post. I have to disagree with your assertion that America is doomed, although the likelyhood of it increases with every wealth bearing pixel digitized into existance at the whim of Dr Baldbeard. Other than that you are correct, attacks on your attitude of anger are unnecessary. If people think that your contribution of emotion is not the way to go, let them balance it out with reason and a way to beat down these motherfuckers. Otherwise quit your whining folks.

Sat, 12/19/2009 - 18:43 | Link to Comment Anonymous
Fri, 12/18/2009 - 21:28 | Link to Comment albion402
albion402's picture

I think I understand your point of view.

Sat, 12/19/2009 - 07:42 | Link to Comment Anonymous
Sat, 12/19/2009 - 13:15 | Link to Comment BRAVO 7
BRAVO 7's picture




Sat, 12/19/2009 - 13:22 | Link to Comment chumbawamba
chumbawamba's picture

Ask your mother.  Her trailer is nextdoor to mine in the park and she comes over every night to clean up the place for a bottle of Hennesey and a Dirty Sanchez.  She said she would do it for the DS alone, and that she considers the Hennesey a bonus.

I am Chumbawamba.

Sat, 12/19/2009 - 14:58 | Link to Comment BRAVO 7
BRAVO 7's picture






Sat, 12/19/2009 - 18:03 | Link to Comment WaterWings
WaterWings's picture


Sat, 12/19/2009 - 17:50 | Link to Comment Hephasteus
Hephasteus's picture

You am? Were you meaning to say I am? Cause I can agree with you there.

Sat, 12/19/2009 - 20:58 | Link to Comment BRAVO 7
BRAVO 7's picture



Sat, 12/19/2009 - 21:31 | Link to Comment MsCreant
MsCreant's picture

You sir are being as rude and offensive as you are complaining that others are being. Be consistent. Either complain and be a gentlemen or cuss like a sailor and don't complain when others do it.

Why do you type in all caps and bold? Did you know it is like yelling?

Sat, 12/19/2009 - 22:42 | Link to Comment BRAVO 7
BRAVO 7's picture



Sun, 12/20/2009 - 01:24 | Link to Comment Unscarred
Unscarred's picture



Sun, 12/20/2009 - 10:41 | Link to Comment Bob
Bob's picture

Big Dogs.  That's some funny shit, MR. BRAVO 7.  Gotta luv the web.  A broadband connection, cap key and bold text can make anybody the baddest ass in town.  JHC.  Too bad neither of you have the option to "take it outside" like men in the real world do.  That being the case, perhaps it would behoove you to reduce your posturing to some well-reasoned arguments. 

Sun, 12/20/2009 - 03:42 | Link to Comment Hephasteus
Hephasteus's picture

Disease is never at ease. I'm going to give you trouble. Make life hard on you.

You can call me aids.

MsCreant is a big dog. You just can't see right.

This is totally working. You're totally putting everybody in thier place and totally make them feel small and insignificant so you can totally push them around.

See you in the parade Bravo India Tango Charlie Hotel.


Sat, 12/19/2009 - 19:57 | Link to Comment Haywood Jablowme
Haywood Jablowme's picture




Sat, 12/19/2009 - 21:29 | Link to Comment MsCreant
MsCreant's picture

I did not know plastic surgeons could reattach heads these days. Well how about that. Does decapitation leave a scar?

Mon, 12/21/2009 - 11:46 | Link to Comment TumblingDice
TumblingDice's picture

You've obviously never played poker...

Fri, 12/18/2009 - 18:04 | Link to Comment quant-this
quant-this's picture

I second what Casino Capitalism said. If Moore Capital calls the EMT desk and says "listen we need 2000 Brazil C Bonds by the end of the day, the trader at GS will tell Moore his strategy and then trade on behalf of his client, they will also trade around this position all day long and in other markets, they might even drum up more business. It would appear that they are trading on behalf of a client when in actuality they are trading along side with their clients. Then they use the excuse that a 2000 C Bond buy will skew the EMBI+ and trade other instruments around that, getting long other components of the index all in the name of providing client liquidity. The way I look at it, it just means that Goldman doesnt know which way the market will go only 10% of the time.


Any other desk traders agree? 


The thing I have to give them is that they are great risk managers because they do know what is going on in the whole shop. It's a good way to run a business and if other banks ran that way maybe it wouldn't be so one sided in their favor.

Fri, 12/18/2009 - 20:05 | Link to Comment Mark Beck
Mark Beck's picture

I guess I would ask, during the crisis was Goldman any less risk exposed than Lehman? Perhaps more so through AIG. If Goldman was not bailed out would they still be in business? 

How great are their risk managers? It would be interesting to see how Goldman has organized its balance sheet (mark to market) after becoming a Bank Holding Company, to understand its true strategies for loss (move to the FED), and real impact due to leverage. We could then be in a better position to judge Goldman's real performance and risk insight.

Mark Beck

Fri, 12/18/2009 - 20:17 | Link to Comment deadhead
deadhead's picture

It is likely impossible to assess true valuations of many asset classes due to the current FASB 157 paradigm.

Fri, 12/18/2009 - 21:30 | Link to Comment albion402
albion402's picture

Pfft! Mark to me the audit results or really doing that!

Sat, 12/19/2009 - 17:02 | Link to Comment dark pools of soros
dark pools of soros's picture

but that is thepoint - all their great little victories and reputation was going to crumble so they shoved a grenade up paulsons ass in front of congress 

Fri, 12/18/2009 - 23:16 | Link to Comment David449420
David449420's picture


If it smells like shit.

If it looks like shit.

If it tastes (Ug!) like shit.

Then it is.




Sat, 12/19/2009 - 13:20 | Link to Comment BRAVO 7
BRAVO 7's picture






Sat, 12/19/2009 - 16:23 | Link to Comment WaterWings
WaterWings's picture

The only natural reply:

Sat, 12/19/2009 - 17:05 | Link to Comment dark pools of soros
dark pools of soros's picture

of course they do,  Fuld runs ZH

Mon, 12/21/2009 - 20:05 | Link to Comment Kayman
Kayman's picture

Poor Fuld- he didn't have Hank in his pocket.

Sat, 12/19/2009 - 17:04 | Link to Comment dark pools of soros
dark pools of soros's picture

if you do that much shit with shit it is called scat

Fri, 12/18/2009 - 18:03 | Link to Comment Anonymous
Fri, 12/18/2009 - 19:40 | Link to Comment Anonymous
Fri, 12/18/2009 - 20:45 | Link to Comment Anonymous
Fri, 12/18/2009 - 22:28 | Link to Comment Crisismode
Crisismode's picture

Excellent beginning, but not enough. First line uses Glocks and 12-guage shotguns.


Next line utilizes whips, specifically Cat o'Nine Tails.


Third cohort utlizes Cuisinarts. To, of course, puree what is left over.


The last line are the doggys. They get to eat the exquisite remains.


Enough said.



Fri, 12/18/2009 - 22:43 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

I am not one to advocate violentce, so I won't.  However, should perhaps profit from it though?  Right?  American dream baby.  Roll the dice at the casino gulag. 

I do have a serious question though.  What market do pitchfork futures trade on?  Is there such a beast?  If so, I am in because my bet is that those who have been taking it on the chin (about 9-15 million angry Americans that actually know about it) will be taking action.  I won't be a part of it as I am a man of peace, but I bet you I could cash in on the coming rage.


Fri, 12/18/2009 - 18:08 | Link to Comment deadhead
deadhead's picture

We don’t believe that we have any form of guarantee, implicit or otherwise, from anyone...

For the life of me I do not understand how Goldman can take a position that the TLGP funds, which are guaranteed by American citizens, are not "any form of guarantee".

This is one of many reasons why Goldman Sachs is the most hated company in the USA.  No matter how obvious and plain something is, Goldman simply goes its own path.

This does not even come close to passing the giggle test.

Goldman Sachs has deservedly earned the scorn and hatred of the American citizenry and that trend is growing.  Either the American citizenry will win or Goldman Sachs will; at this juncture in time, there does not seem to be a middle ground. 

I've placed my bet with the citizens of this country and will re-double efforts to bring the truth of Goldman's nefarious behavior to all those that I can influence. 




Fri, 12/18/2009 - 18:50 | Link to Comment tip e. canoe
tip e. canoe's picture

"Dear Mr. Durden:"

that a 100 year old financial institution is reduced to responding to a doppleganger from a work of fiction should clue the smart bettor in that the facade is beginning to crumble.

truth is a strange hammer boys

Sat, 12/19/2009 - 18:23 | Link to Comment Wondering
Wondering's picture

I agree tip e. canoe. That is the most interesting aspect of this episode.

Goldman exists in a business based on trust

Trust is gained once and lost once

Dead man walking

There is a lot of evidence that the oligarchs are beginning to shed their weakest members. Some day the wagon will come for Robbiespierre as well

(although it may take awhile)

Fri, 12/18/2009 - 21:50 | Link to Comment ZeroPower
ZeroPower's picture

deadhead id love to be at one of your family dinners one day (or youre welcome to mine), so that i could pick your brain about finance stuff.

cheers from Canada.

Fri, 12/18/2009 - 22:16 | Link to Comment deadhead
deadhead's picture


there are some parts that I understand well and there are many others on ZH who understand them much better than I.  Working together, the truth comes out for all to see.

One of my favorite historical quotes: "almost all politics is about who gets the money".

follow that maxim and you will find the answers.

Fri, 12/18/2009 - 22:56 | Link to Comment Unscarred
Unscarred's picture

I like your quote, but would alter it slightly.  "Politics is ALL about who gets the money."

One of my favorites:  "Laws aren't written to protect all citizens.  Laws are written to enrich a select few."

Sat, 12/19/2009 - 04:09 | Link to Comment WaterWings
WaterWings's picture

which are guaranteed by American citizens

See, this part is bullshit. Fiat currencies are supported by the masses until they realize they are slaves - and then it fails. In other words, it's never guaranteed.

at this juncture in time, there does not seem to be a middle ground

Hello? Anybody home? Huh? Think, McFly. Think!

to all those that I can influence

Like your favorite corrupt congresscritter?


Sat, 12/19/2009 - 04:44 | Link to Comment Unscarred
Unscarred's picture

What's with the unnecessary venom?  Is your wife holding out on you?

Sat, 12/19/2009 - 11:32 | Link to Comment Anonymous
Sat, 12/19/2009 - 11:58 | Link to Comment WaterWings
WaterWings's picture

As for 'unnecessary venom' I ask you when, outside of open-bid contracts, is it ever acceptable for any business to utilize 'sheeple-guaranteed' government funding?  The FDIC is quite possibly the pinnacle of irony in our corrupted system - it's an open secret they are insolvent.

When letters, emails, and phone calls to 'elected' representatives stop, and personal visits begun, they will see the purest form of democracy.

Sat, 12/19/2009 - 12:10 | Link to Comment Unscarred
Unscarred's picture

I was referring to your discourse directed towards deadhead.

Click HERE ==> to release pent-up frustration.

Sat, 12/19/2009 - 12:48 | Link to Comment WaterWings
WaterWings's picture

Two lines, two troll moves.

Sat, 12/19/2009 - 13:20 | Link to Comment Anonymous
Sat, 12/19/2009 - 19:46 | Link to Comment Unscarred
Sat, 12/19/2009 - 07:20 | Link to Comment Anonymous
Sat, 12/19/2009 - 11:26 | Link to Comment deadhead
deadhead's picture

Viniar's quote in b'berg the other day (i don't have the link anymore but it was linked and repeated on ZH a few times) clearly came out that Viniar was of the position that Goldman had no implicit or explicit gov't guarantee and that Goldman was on "its own two feet".

Quantification is irrelevant to this matter.


Fri, 12/18/2009 - 18:09 | Link to Comment baserunr
baserunr's picture

"Our VaR is primarily driven by client-related activity rather than proprietary activity..."

How is it that GS doesn't have significant VAR?  They risk only their clients assets when trading, but none of their own?  So this means that  theior clients, for whom they are trading, are making out even better than GS?

Fri, 12/18/2009 - 23:05 | Link to Comment Cursive
Cursive's picture

When your client is the Treasury, you can risk taxpayer money with only the risk that Joe Public realizes that you've cherry-picked the winners and stuck them with the losers and starts talking like Chumbawumba.  The boiled rope and gallows are a short wait after that point of recognition... 

Sat, 12/19/2009 - 12:23 | Link to Comment Anonymous
Fri, 12/18/2009 - 18:09 | Link to Comment romario
romario's picture

Goldman has the best risk control in the business...

And also the most favored connections in Washington, one must say


Fri, 12/18/2009 - 20:19 | Link to Comment Anonymous
Sat, 12/19/2009 - 00:33 | Link to Comment Anonymous
Sat, 12/19/2009 - 14:08 | Link to Comment Winston Smith 2009
Winston Smith 2009's picture


Fri, 12/18/2009 - 18:10 | Link to Comment chumbawamba
chumbawamba's picture



I am Chumbawamba.

Fri, 12/18/2009 - 21:01 | Link to Comment Anonymous
Sat, 12/19/2009 - 03:49 | Link to Comment WaterWings
WaterWings's picture

Oh snap! This is good.

Fri, 12/18/2009 - 18:12 | Link to Comment Anonymous
Fri, 12/18/2009 - 20:50 | Link to Comment Anonymous
Fri, 12/18/2009 - 23:48 | Link to Comment delacroix
delacroix's picture

I read a report, that Tzipi Livni, was the recipient of the downloaded, goldman proprietary trading program. she forwarded it to the U.S. authorities, with the claim, that zionists, had it designed to steal money from the market.  israel, you gotta love em                  she got pushed out of the picture, pretty fast.

Sat, 12/19/2009 - 00:28 | Link to Comment JohnKing
JohnKing's picture

Hey Tzipi, if your reading here, send me a copy too.

Sat, 12/19/2009 - 12:51 | Link to Comment AnonymousMonetarist
AnonymousMonetarist's picture


Did not see this comment at first so will repost what was put on the second page of this commentary....

If anyone reading this would like to flesh it out anonymously here's your chance...



So here's a grenade ... take it for what it's worth.

A few moons ago was working with a fellow that had an interest in my asset class.

Socially awkward, 8th grade confirmation ties with mismatched suit jackets, perennially nervous, hoping that the billionaires in baseball caps would bless his opening a hedge fund that would help fund a charitable endeavor.

Cut his teeth trading for hedgies on behalf of spooks.

Once over high tea very quietly suggested Goldie had what was called a 'doomsday box' that had NSA software codes allowing off-shore trading to front run the markets.

This was long before the initiation of this blog. When ZH started this fellows' story came back to me because ...

the term he used for this front running was ... Zero Hedging.

Anyone care to anonymously flesh this out?



Sat, 12/19/2009 - 03:55 | Link to Comment WaterWings
WaterWings's picture

Damn! Is that what happened? Okay, but wait, I cannot support the use of white phosphorus in urban areas, and burning of UN food warehouses amidst 5th-world civilian populations, ever. So, in my mind, warmongers should always get the boot, and never the Nobel Prize.

Sun, 12/20/2009 - 03:31 | Link to Comment Anonymous
Fri, 12/18/2009 - 18:13 | Link to Comment Anonymous
Fri, 12/18/2009 - 18:24 | Link to Comment A Man without Q...
A Man without Qualities's picture

For question 7, the rumor was that they took the share of the profit from the sub-prime short attributable to the bonus pool and the partners agreed to punt it on the DAX and they lost the lot.  

As I understand it, they tend to use the prop desk to leverage up the bonus pool and as it is sort of their money, rather than the shareholders, I don't think the VaR metrics apply.

Fri, 12/18/2009 - 18:24 | Link to Comment Deep
Deep's picture

These guys are crooks just like the rest of Wall St. They are just connected crooks with Washington. These guys have really ruined the market, why would anyone put capital in the market after seeing how rigged this game is. Better of buying CD's for the average guy like me who doesn't have millions to gamble with. At least i work hard and know my money is safe. I am a young guy, 30, and let me tell you, all my friends who don't follow the markets like me, they say it's just a "rich man's casino, only difference is they are not villified because it's the market.


The market is rigged , how does a little guy like me have a chance.

Fri, 12/18/2009 - 20:54 | Link to Comment Jus7tme
Jus7tme's picture

>>Better of buying CD's for the average guy like me who doesn't have millions to gamble with.

Well, if you buy CDs then the bank will lend your money out to someone else who will use it to gamble in the markets, and take the profits and use them inflate other stuff to make your savings and work worth less than it otherwise would be.

If they don't have any profits, they will stick you (the taxpayer) with the losses 

Heads, they win. Tails, you loose.

Fri, 12/18/2009 - 18:28 | Link to Comment I need more asshats
I need more asshats's picture

Can you start a new game thread here at ZH. Name that Squid-criminal.

I'll start.

Fri, 12/18/2009 - 18:35 | Link to Comment Anonymous
Fri, 12/18/2009 - 18:49 | Link to Comment Ripped Chunk
Ripped Chunk's picture

Cheated on every exam

Fri, 12/18/2009 - 19:33 | Link to Comment Anonymous
Do NOT follow this link or you will be banned from the site!