Highlights from Goldman Sachs’ Conf Call Today

There were too many highlights to cite them all in the Goldman Sachs conference call today on the firm’s hedge fund misadventures, but here are a few:

#1) Clients losing money is one thing, but you?

Mike Mayo – Deutsche Bank – Analyst
And a few questions have been asked about this, in terms of precedent, I mean you’re going from where your clients lose money to now where Goldman Sachs can lose direct money from Global Alpha. And have you done this before, and what does this mean for a precedent?

David Viniar – Goldman Sachs – CFO
First of all, just to clarify, Mike, we have not made any investment in Global Alpha yet. This is all going into GEO. And you should not take this as any type of precedent at all, other than one that you have seen for us before, which is we will take advantage of good opportunities where we see them, and we will also look where it makes sense for us and our clients to help our clients
too.

#2) Picking stocks? That’s a mug’s game.

Glenn Schorr – UBS – Analyst
So this is kind of one of the signs of life that people look for when they see risk capital and sort of look for some bottoms. I’m curious if you guys have been thinking about other asset classes, or have you seen other investors putting some risk capital work at these bottoms in other asset classes?

David Viniar – Goldman Sachs – CFO
Well, I tell you I wish we were smart enough to always call the bottom. I’m not sure we can do that.

#3) When is a bailout not a bailout? When we say so, damn it!

Stephen Wharton – JPMorgan – Analyst
Just beyond that, a broader question, we have seen BSAM I guess rescue, if that is the right word. I mean the equity holders are wiped out of some of their funds, and you are stepping in here with a major principal capital investment in one of these funds. I mean do you feel that there is some moral hazard being introduced here in terms of how investment banks are reacting to problematic hedge funds managed by their Asset Management arms?

David Viniar – Goldman Sachs – CFO
No, let me just clarify. This is not a rescue. This is two things. First, given the dislocation in the markets, we believe that this is a good investment opportunity for us and the other investors that we have brought in. We also think at the same time this will be very helpful to the current fund investors because it will give the fund the wherewithal to also take advantage of these market opportunities. And so we think it is both of those things but not a rescue.

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Comments

  1. Book says:

    Looks like fun to pile on when a firm’s having problems ….
    the American way ……. boo them on the way up …. kick them when they’re down ….. jealousy ????

  2. Paul says:

    That’s bull shit – jealousy – they GS actually think they are invulnerable to what the ordinary man is vulnerable to. They have greed, ego, importance, arrogance – you name it. They actually feel that they are chosen and better….On the way down – I guess we really haven’t seen “the real down yet”
    Mr. Paulson – will be disgraced before this is over
    and most everyone usually gets what they deserve – as for jealousy – I guess my first question would be…Of What? I, personally have the life everyone dreams of – and I’m a nobody!

  3. book says:

    lot of anger from someone who has no “feeling” for the story Paul