Friday, April 30, 2010
Open and honest derivative trading would cost Goldmine Sachs $3.9 Billion
We can all agree that honesty is the best policy but it obviously won't make you the most money. So let us all take a moment to pray that Congress will act soon to realize this reduction for GS and for the other pirates of Wall St like JP Morgan Chase.
At the NYT's Dealbook, Cyrus Santi has word of a rather staggering new report by Bernstein Research which projects that Goldman Sachs could see a 41 percent drop in earnings if strict derivatives reform moves through Congress. The total, per Santi's calculations, would be equivalent to $3.9 billion hit to Goldman Sachs last 12 months of income...Their loss is America's gain.
As the WSJ notes, derivatives reform would strike a big blow to JP Morgan's earnings. The bank's CEO Jamie Dimon has supported greater regulation for derivatives -- but he recently noted that even a neutered bill could cost the bank "several hundred million to a couple billion dollars" per year.
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