Goldman Sachs's Derivatives Generated Up To 35 Percent Of Its 2009 Revenue

Goldman Sachs made up to 35 percent of its 2009 revenue from derivatives, according to recent documents disclosed to the Financial Crisis Inquiry Commission and leaked to the Wall Street Journal.

In a memo sent to the FCIC -- a government panel charged with investigating the roots of the financial crisis -- Wall Street's most profitable bank revealed that its derivatives operations generated $11.3-$15.9 billion of its $45.17 billion net revenue in 2009. This amounts to 25-35 percent of the bank's revenue.

"We have asked for the same information from several banks," an FCIC spokesman told the WSJ. "They have all indicated they are working hard to provide that information to us. If we need additional information, we will ask for it."

Concurrently, Goldman Sachs suffered 10 days of losses in the second quarter through trading stocks and bonds. However it still beat its biggest rivals on Wall Street, generating $5.61 billion of trading revenue during the 65-day quarter.

As HuffPost's Shahien Nasiripour pointed out last week, Bank of America recorded losses on 12 of its 63 trading days last quarter and JPMorgan Chase lost money on 8 trading days.

Comments

[Steelsil]

02:02 AM on 08/24/2010

The expression of a man who just won the Monopoly game, except that it was reality, not a game. You and I lost, and the Republicans plan to see that that happens in the next round, too.

[Kevin Atlanta]

06:49 PM on 08/10/2010

When you own the White House, the SEC and the Department of Justice the world is a beautiful place to rape.

[avg american]

04:12 PM on 08/10/2010

Word to the wise:
If You Don't Like The Way Things Are Going, Make Sure You Get Out There And VOTE Today.
Today is the day you can vote the greedy, gluttonous, corrupt corporate schills out of office.

Big Businesses own our government.
They are calling the shots.
No one is going to be prosecuted.
No one is going to prison.
Not for the economy, not for the environment.

Big Businesses give money to our politicians to help them get elected (in most cases - both parties). Once the politicians are in office, Big Businesses call in favors when they need them. Companies like Goldman Sachs, AIG and BP donate millions of dollars, not just to one politician, but many, many politicians (from both parties) in many states, so when they need votes to pass or kill legislation, they have the votes.

Get it?

Our leaders can't pass bills to control Big Business because Big Business own our leaders.
catch 22...

It's not going to get any better thanks to our supreme court justices that passed legislation allowing unlimited donations by Corporate America to our politicians.
The only thing politicians understand is votes. Corporations have the money, but WE have the votes....

Can you believe that in this terrible recession with over 15 million people unemployed, that there are some politicians that want 2 months vacation? Are you kidding?
Vote them out of office.

[realist2008]

03:23 PM on 08/10/2010

I keep asking myself why this man is not in jail???? Clearly, Out and out fraud is ok as long as you can buy your local congressman, senator and judiciary. Amazing.

[rjk111]

12:01 PM on 08/10/2010

Lloyd Blankfein - New York Crime Boss

[rjk111]

12:12 PM on 08/10/2010

I'm leading America down the drain with a smile on my face. And, BTW, I'm very happy in my new 26 million dollar apartment... thanks for the opportunity all you hard working middle class Americans.

[floridalib]

11:51 AM on 08/10/2010

Remember when Americans used to make things of value instead of making value out of things?

[oldguru]

10:53 AM on 08/10/2010

Next to Dickless Cheney, lLoyd Blankfein just may be the most evil man in the world. There is nothing wrong with making lots of money, but making it by destroying other people's finances is pure evil.

[hglu]

08:45 AM on 08/10/2010

Just like a gambling casino. They are going to bet because they know they are going to win.
Maybe better than a casino because now one regulates them.

[Macready]

08:09 AM on 08/10/2010

these guys belong behind bars

[alumcreek]

07:46 AM on 08/10/2010

The major problem I have with GS is that it does nothing to produce wealth. It simply seeks to slice off parts of the wealth of others whose assets they use and abuse.

Our nation no longer produces much that can be sold at a profit and thereby creating wealth. We now have institutions who move around funds and skim bits of it off to build up massive bonuses for management.

Nothing GS does is of value or enhances the lives of the overwhelming majority of the citizenry of this nation.

[Macready]

08:10 AM on 08/10/2010

sadly you are so right alumcreek . . . they gamble and others pay the piper and unless there is stricter legislation they will continue to do the same thing

[nova07]

11:32 AM on 08/10/2010

GS is a global investment bank. For example, when non-financial companies that produce physical products need to raise money, they go to ibanks like GS, who for a fee will allow them to access global capital markets. Not only do they assist companies in raising funds by issuing securities, they also create a secondary market for these securities which allows investors to buy and sell them at will (liquidity). If GS did not exist, any company looking to raise money/issue securities would have to do it themselves, which would cost the company greatly and may even prevent them from doing so all together. Even though for most of its history GS was a mid-tier firm, it has recently become one of the global leaders in ibanking, and it provides a service that all companies need once they reach a certain size, which is also a service these companies can't do for themselves.

[Fiscalprudence]

11:45 AM on 08/10/2010

Mid tier? When did this turn? Maybe mid tier in terms of market cap as it was a private firm.

[realist2008]

03:25 PM on 08/10/2010

So companies grow more organically without GS?

[Steve Lane]

05:58 AM on 08/10/2010

Why aren't derivative bets taxed at 99%? They are of no benefit to the economy. They are not investments in productive industries. All they do distort the market.

[AussieEconomist]

06:51 AM on 08/10/2010

Don't forget that they're excellent for funding credit bubbles as well!

[Steelsil]

02:06 AM on 08/24/2010

G'day, Mate. You're so right.

[jmdziuban1]

05:13 AM on 08/10/2010

25-35% of profits from derivatives, paper trading is 25-35% of profits, bets upon other bets. GS lost on 10 of 63 trading days, BOA on 12, and JPM C on 8. Does Wall St ever actually risk losing money under the current system?

[GMosca]

11:51 AM on 08/10/2010

BofA, JPMorgan and Goldman all share the distinction of having also recorded PERFECT trading records for the first quarter. Combined with the numbers in these articles from Q2 and you get the picture of these banksters winning on roughly 120 of 130 trading days in Q1 and Q2 combined. With the market essentially flat for this period, we are left with a "juicing" of the market based on no growth.

This system is much akin to the 1990's bull market(before the Tech bubble), when U.S. corps invested huge pension and 401k money to drive up the market, and pocket most of the gains. Same thing happening here...they are using our own money against us.

[Steelsil]

02:07 AM on 08/24/2010

You mean under the Republican system of socialized losses and privatized profits? Is this a trick question?

[AussieEconomist]

04:05 AM on 08/10/2010

Somebody should make a cowboy film about a nameless stranger riding into NY and cleaning up Wall street. I humbly suggest 'A Fist Full Of Derivatives' as a title.

[Steelsil]

02:07 AM on 08/24/2010

Either Bruce Willis or Clint Eastwood would be fine, as long as no bankers were left standing at the end of the film.

[Tom95134]

03:13 AM on 08/10/2010

Are you unhappy about how much Goldman made? Then you should watch "The Warning" from Frontline. That will make your blood boil.

[chuck prebys]

07:26 AM on 08/10/2010

Dloading it now........along with a few other Frontline episodes.
Frontline.........along with C-Span........may be among the last few remnants of intelligence left on the toob.
No wonder Righties want to gut PBS..........

[cincinnati]

02:47 PM on 08/24/2010

But read

The Republican Noise Machine by Brock....although a bit old by now....
He documents how the right plotted to take over the media....
Owning virtually all newspaper's, which used to matter politically, was not
enough....ie, Gannett, of USA Today, Cin. Enquirer, etc....100 Newspapers
by themselves !!......and Cin Enq will only endorse a Dem if they can't win
or can't lose, not if it matters....

Brock reminds us that starting with Buckley's Firing Line in 60's, McLaughlin [sp?],
etc. we actually have had pretty conservative voices on pbs in general.....I think
Bill Moyer's is one of the few truly liberal programs on pbs....

I have not researched it but have been told that some pbs stations changed their schedule when right wing Israel was bruttally attacking Gaza, killing over 300 Children.....and put on things like the Anne Frank story [ which I've seen many times and love but let's be sure to understand who generally are the victim's around Israel these days....]

[Steelsil]

02:08 AM on 08/24/2010

If my blood pressure got any higher thinking about the Wall Street / Republican Party axis, I'd die of a stroke immediately.

[cincinnati]

01:19 AM on 08/10/2010

Does anyone know exactly how many Wall St. crooks, over the last couple years, especially the really big one's like Madoff, have even gone to court, let alone prison ?

Besides him who is there?
Most think in his large firm [ and family ] at least 10-20 people must have known he was
not being honest, simply cheating and stealing.

And with the big firms like Goldman, M. Lynch, Bear's, etc. have any of them faced charges?
Anyone in the government like in the SEC that went beyond mere incompetence and actually
were at the least negligent, if not much worse ?

I believe the number's, compared to the incredible loss's and crimes are very small so far.
I know one guy's attorneys got a judge to throw out key evidence.....can we trust the NY judges ?
Can we even trust most of the staff that lives in the area, from the SEC to federal prosecutor's ?
Maybe they are too close to these people or the industries?

Maybe we need a special outside team brought in to get some justice ?!?!!!!

[Steelsil]

02:09 AM on 08/24/2010

The biggest Wall Street crooks ARE the government. Don't hold your breath.