01/22/2013 11:13 am ET Updated Mar 24, 2013

Goldman Sachs Profits By Ignoring Volcker Rule, Which Doesn't Actually Exist Yet

See, folks, this right here is an example of how the rest of us are playing checkers while Goldman Sachs is playing three-dimensional chess.

Goldman has, quite brilliantly, figured out a way to engage in activities made verboten by the Volcker Rule, Fortune's Dan Primack points out. Volcker is the part of the Dodd-Frank financial-reform law that prohibits banks from gambling with their own money. But Goldman is going right ahead and doing stuff that Volcker says it shouldn't do.

How on earth is Goldman getting away with this?

Well, it has found a small technical loophole in the law. And that loophole is the fact that the law doesn't -- and I apologize if this is going to get all jargony on you -- exist.

That's right, there is no Volcker Rule. Not yet, anyway. It has been lobbied to within an inch of its life and delayed until 2014, by which time it's still not certain the law will actually have any "teeth," to use Primack's term.

And so while Goldman's rivals have spent the past couple of years since Dodd-Frank's passage shedding businesses they won't be able to use under Volcker, and forgoing a bunch of potential profits in the process, Goldman has kept right on going about its business of gambling with its own money. Primack expresses what we're probably all feeling about this right now, or should be:

So the Volcker Rule has become a cautionary tale, but for all the wrong reasons. It was intended to help curb Wall Street recklessness -- a culture in which banks invest first and ask questions later. But instead it just validated those who expertly exploit the sloth of federal officials and encouraged such behavior the next time around.

This approach could well end in tears, for Goldman and taxpayers, which was the whole theory behind the Volcker Rule in the first place. But for now the music is playing, and Goldman is dancing.