Goldman Sachs May Not Lose ANY Revenue From Financial Reform Bill

In the wake of the massive, 2,300-page financial reform bill signed into law by President Obama last month, Goldman Sachs may emerge without any noticeable drop in revenue, the Los Angeles Times's Nathaniel Popper reports.

Last week, CNBC reported that the bank was making plans to spin off its proprietary trading desk, a division that makes trades for the bank's own account. Under the Dodd-Frank bill, Wall Street's banks will be given four years to adjust to the so-called "Volcker Rule." The provision, put forth by former Fed chief Paul Volcker, would cap the amount of money banks could use to engage in proprietary trading.

Wall Street banks have been scrambling to parse the implications of the rule, though it's unclear whether or not prop traders will simply be reassigned to different bank divisions.

But despite the spin-off rumors, Goldman analysts have privately informed their clients that the bank will not lose any revenue from the changes, Popper reports. Here's more:

"The statement was perhaps surprising in its level of conviction," Bank of America Merrill Lynch analyst Guy Moszkowski wrote in a note to clients, "but we've learned to take such judgments from GS very seriously."

Richard Bove, an analyst with Rochdale Securities and frequent CNBC guest, who was certainly no fan of the financial reform bill, told Popper he's decidedly sunny on Goldman's prospects: "I thought this company was going to be really harmed by this bill; now I've figured out that it's not going to happen," he said. "They should win big here."

In a recent interview with Bloomberg, Bove said "what I think Goldman is going to show is that not only are they going to recover, but they're going to benefit from [the changes].

In interview with CNBC, he noted: "Overall, this new financial regulation act should be viewed as an opportunity. The functioning of the financial sector is being forced to adjust. Goldman is likely to make the adjustment first and capture new and profitable opportunities."

Comments

[JoeLeland]

12:54 PM on 08/16/2010

This is a major indicator of Pathological Avarice.

[vulpecula762mm]

05:18 PM on 08/12/2010

I want Obama to grow a set of Bawelz.

A big hairy... stinky... sweat set that are the bane of all tea baggers.

I DID NOT VOTE for this

[Thomas Paine2012]

05:23 PM on 08/12/2010

Oh... Do our votes count for something again? I thought after Bush II we were just doing elections to subsidize Diebold...

[vulpecula762mm]

05:30 PM on 08/12/2010

Its is still possible to overload the cheating system... so many votes they cant fake it.

Or just rise up and hang some traitors... or challenge to duel...

They set it up so its hard to get such redress didn't they?

[oped1961]

12:50 PM on 08/12/2010

Can no one on the left get poster board?
You won’t get political power until you earn it. Obama and Dems listen to the Right
Put a sign on your windshield while you shop, the Right has them
Embarrassed? Own your opinion
Obama doesn't hear you, speak louder
And Move your Money!

[dmanjam]

10:56 PM on 08/11/2010

What would Thomas Jefferson do?

[vulpecula762mm]

05:13 PM on 08/12/2010

Duels and executions.

[execuman1]

09:21 PM on 08/11/2010

what are they supposed to say ? that they are going to lose money due to new rules and regulations ?

they arent going to make as much as they did. why make deals with them after its become public knowledge how they double cross their own clients ?

[Pleroma]

08:25 PM on 08/11/2010

And the Obama Kleptocracy sails on...

[Pleroma]

08:13 PM on 08/11/2010

Well, they bloody well wrote it didn't they?

[greenlord]

07:18 PM on 08/11/2010

I'm not in the least bit surprised they pretty much own it author Chris Dodd Outright...I think some other Big Banks might have a share or two. I only wish we the people had part ownership in our legislators then maybe we could get them working for us again. We're just to Dam4 poor and in a govt where $1 equals 1 vote were left shortchanged when it comes to representation.

[fortyfiveseventy]

04:57 PM on 08/11/2010

Goldman was a scapegoat, but this bill will actually help them. It really hurts their competition.

[Pleroma]

08:16 PM on 08/11/2010

Probably a big surprise all around.

[tony wise]

03:09 PM on 08/11/2010

thanks obama for sending in your former white house counsel against your appointed sec head. the fact goldmans got off so light is entirely coincidental im sure.

[Pleroma]

08:16 PM on 08/11/2010

Obama knows exactly who he's working for.

[slogward]

02:38 PM on 08/11/2010

You know, the reform bill wasn't passed JUST to get Goldin Sacks....
http://nbyslog.blogspot.com/2010/08/analysis-gathering-storm.html

[hellboundtrain]

02:13 PM on 08/11/2010

1. If the investment bankers were playing on a level playing field, instead of the one where the one corner is tilted toward their pot (because the bribed congress is all sitting on that one part,) and

2. that others had the same opportunity to have super special software made for them to also cant the game to their advantage, and

3. assuming that the other people playing are as under-handed and devious as themselves, then

4. they would break even on their earnings, perhaps.

[Mort Twain]

01:54 PM on 08/11/2010

ABHOR THE POOR
An original poem by Mort Twain

Close the door,
Here comes the poor
The poor we do abhor!

We can't get rich or raise the score
Not with these peasants we call the poor
All they want is more, more, more!

Money, bonuses, riches we all adore
What have these to do with the poor?
The rich can ride it out at Tar Ball shore!

Oh they stink, these lowly poor
Hearing them whine is such a bore
I'd only let Mexicans shine my floor!

The poor, the poor had money once,
But Goldman Sachs did eat their lunch
Hey poor suckers, thanks a bunch!

The banks are bust, housing is gone
Here's a buck, go mow my lawn
Why must the poor look so forlorn?

Jobs are gone, they don't even try
These shifltess poor won't go out and buy
It's enough to make King Louis cry!

Let's lock 'em up and make it illegal
Being poor is a disgrace to the Eagle
The more we steal the more we're regal.

Take their taxes, prop up Wall Street
The rich shall not go down in defeat
It's fun to be rich, it feels so elite.

Oh, yuck, another person is poor
It's more than a great society can endure
Join the Army, losers, and do a tour.

Hey job seeker, there's a hole in your shoe
Don't depress me, it's making me blue;
Whoever thought the poor would be YOU?

___

[elbzee]

01:59 PM on 08/11/2010

Nicely done, Mort! I especially like this one: "The more we steal the more we're regal."

[byoungusa]

02:55 PM on 08/11/2010

very nicely done, how have I not fanned you sooner, better late than never,

[AustinG]

01:47 PM on 08/11/2010

This is what happens with most every so called regulatory effort and what I have said in every thread about the regulation that I have commented on whether on this site or others. The big guys who the legislation is supposed to regulate are the ones that make out in the end. The regulation ends up hurting small companies the most which insulates the big ones from competition and makes the "too big to fail problem" worse. Companies like Goldman's will end up passing on most of the costs with compliance onto consumers. So in the end this "regulation" doesn't serve consumers at all. It serves Goldman's and it serves politicians who get to pretend that they are taking on companies like that when reality is completely different.

[Chris 54321]

01:39 PM on 08/11/2010

"and the proletariat shall rise up"