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Accounting regulations were changed last week [1] so that banks do not have to "mark to market" in "inactive markets" anymore. Since Goldman Sachs is now a bank

by ajju 18y ago

Accounting regulations were changed last week [1] so that banks do not have to "mark to market" in "inactive markets" anymore. Since Goldman Sachs is now a bank holding company, they don't have to do this either. What is now a ~2B profit would probably have been a far greater loss by the old rules. [1] http://www.reuters.com/article/governmentFilingsNews/idUSN0931201320090409 http://www.reuters.com/article/governmentFilingsNews/idUSN09...

j2d2 18y ago
Interestingly, they're sitting on over $100B cash and cash equiv. http://finance.yahoo.com/q/bs?s=GS&annual http://finance.yahoo.com/q/bs?s=GS&annual
- ajju 18y ago
  With accounts payable of $257B, so the cash doesn't really mean that much and a net ~64B assets-liabilities and all those numbers are from Nov '08
  - j2d2 18y ago
    Fair points.
websevenpointoh 18y ago
The way these things turn out is both sad and terrifying.
op12 18y ago
We should be careful and not equate what they have the option of doing to what they are actually doing. They in particular have been sticklers in marking to market no matter what, regardless of if they are a bank holding company or not (In the conference call this is reiterated many times). It would not have been a far greater loss under the old rules, that much is clear from reading the balance sheet and disclosure of the relatively small size of legacy assets (the assets that would be impacted by different marking methods). Income was driven in pure trade faciliation, good old fashioned buy low and sell high in the capacity of a financial intermediary.