Goldman Sachs to be regulated by Fed

[UpInArms]

Source: Reuters

PHILADELPHIA (Reuters) - Goldman Sachs Group Inc (GS.N: Quote, Profile, Research, Stock Buzz) said on Sunday it would become the fourth largest bank holding company and would be regulated by the Federal Reserve.

Goldman said it would move assets from a number of strategic businesses, including its lending businesses, into an entity called GS Bank USA that would have more than $150 billion in assets.

GS Bank USA would be one of the ten largest banks in the United States, with assets that are fully funded for term and available to funded by the Federal Reserve.

Read more: http://www.reuters.com/article/ousiv/idUSNWEN838420080922

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:wtf:

[still_one]

1. What they are doing is moving the bad assets to us, and the good assets to them /nt

[UpInArms]

2. I figured it had something to do with now becoming an entity

that the FDIC could guarantee and they could then continue to bankrupt the FDIC when they fail and then take the assets somewhere else

:shrug:

[UpInArms]

3. Goldman, Morgan to become bank holding companies, Fed says

http://www.marketwatch.com/news/story/goldman-morgan-become-bank-holding/story.aspx?guid=%7BCFEF126B%2DFBCA%2D4905%2D9DE5%2DFBAC5DD9C2DF%7D

WASHINGTON (MarketWatch) -- Giant Wall Street investment banks Goldman Sachs (GS: 129.80, +21.80, +20.2%) and Morgan Stanley (MS: 27.21, +4.66, +20.7%) are turning themselves into bank holding companies, the Federal Reserve said late Sunday night. The Fed approved the banks' applications, pending a required five-day waiting period. The move is the latest extraordinary action to hit Wall Street since the financial crisis began unfolding and follows the bankruptcy of Lehman Brothers (LEH: 0.22, +0.16, +313.7%) .

[torbird]

4. You people will never be happy, will you?

Until we're all dirt farmers agin', keepin' a couple gold coins under the floor of the barn in an old clay crock. Banks and railroads -- them's the enemies of the workin' man! And don't gimme any of yer confangled "cities"!

Seriously, now. I'm starting to think a bunch of you would rather that all of us lost everything as long as it means the bastards on Wall Street get what's coming to them.

And the conspiracy theories around here...well, let's just say that pick-a-pay mortgages were less crazy!

[MadrasT]

5. "You people"?

Way to overgeneralize.

[dixiegrrrrl]

7. Maybe he/she meant to say

" you little people".

I feel so...scolded now.

[Pab Sungenis]

14. Feed not the trolls.

Please.

[amandabeech]

8. Well, maybe that's what it would take for some of the bastards to quit

taking risks so large that they take down the world.

I'm 53 and this is the third round I've seen of greedy, dishonest sons of Gordon Gekko wrecking the financial system.

First was the late '80s, junk bonds and the S&L bailout.

Second was the bubble.com fiasco. Lots of people lost lots of dough to folks that the SEC couldn't afford to prosecute. I know.

Now its mortgage-backeds, swaps and who knows what else on steroids.

This crap used to happen every 30 years or so and now its down to 10 year intervals.

If we're finally going to put some sense into the folks that do this over and over again, we're simply going to have to get serious.

And I'm not going to be happy until we do.

Why you take it so lightly is beyond me. Perhaps its because you're someone who has profited from this mess three times?

[AlCzervik]

13. You people? you're fun.

[mbperrin]

16. No, I'll be plenty happy when ol' Judge Lynch rises up

and deals with these fuckers. About time for a little dose of the "Terror."

Google is your friend. The Terror ruled European politics for a century and got some actual reforms done.

[Canuckistanian]

20. 'You people'?

Now THERE'S a way to make friends around here.

You got something intelligent to say?

[struggle4progress]

6. So Goldman Sachs' good ole boy Bernanke's gonna "regulate" Goldman Sachs now

[cal04]

9. Morgan Stanley, Goldman Sachs to change status

http://www.theaustralian.news.com.au/story/0,25197,24383041-12377,00.html

US investment banks Goldman Sachs and Morgan Stanley will become bank holding companies and will receive new US government credit, the Federal Reserve has announced.

In a statement, the Federal Reserve said its board had approved "the applications of Goldman Sachs and Morgan Stanley to become bank holding companies'' and authorised the Federal Reserve Bank of New York "to extend credit'' to the two firms.

The Fed also made these collateral arrangements available to the broker-dealer subsidiary of investment firm Merrill Lynch.

Goldman Sachs and Morgan Stanley are the only independent investment banks remaining in the United States following a meltdown on Wall Street that saw the collapse of investment bank Lehman Brothers last Monday and the government bailout of insurance giant AIG.

[Tutonic]

10. They're going to rob the tax coffers--we are screwed!

[OwnedByFerrets]

11. Well woopie fucking doooooooooo......

lets shut the barn door after the trillion dollar horses have bolted.

www.wearableartnow.com

[Scooter24]

12. This move allows Goldman to increase its capital

dramatically without having to rely on a merger with a commercial bank. The reserve will offset the company's bad loans while allowing the company to increase its revenues. This will allow Goldman to increase profits which will make the stock favorable and then allow them to buy back their debt.

Morgan Stanley is already talking about a merger with Wachovia. If that happens, Goldman will be the sole independent investment bank left. At that point, their position on Wall Street will be unrivaled. Already the firm stands to greatly gain from the collapse of Bear Sterns and Lehman and the merger of Merrill Lynch and Bank of America. In their eyes, less competition is very good especially since the No. 1 and No. 2 firms are all that remain. The number of clients have been static to slightly increasing but now the market just dumped thousands of very wealthy displaced clients right onto Goldman's and Morgan's doorsteps.

So far Goldman is still the only player left making a profit. They still have cash reserves and capital but that will quickly dry up if somehow things go sour for them. I still believe that Goldman will be the sole survivor after this mess is over.

Right now, as a Goldman client and stockholder, I'm confident that the firm will pull through this mess.

[Maven]

15. Uh huh. So now the next thing they'll do is spend millions lobbying against banking regulations

that are meant to protect depositors, so they can have as much of their cake as possible and eat it too.

And that'll be the next disaster.

[olddad56]

17. great, but who regulates the Federal Reserve? It is a private bank..

just as crooked as the government, but not really part of it.

[WriteDown]

21. Its neither private nor public....

and is actually overseen by Congress. Go figure.

[TheLastMohican]

18. This is the biggest highway robbery known in American history

The taxpayers will pick up the brunt while the private business will get the profit.
Why are people silent about it?

[salin]

19. um... who, in their right minds, would use these nearly bankrupt banks to hold their deposits?

Seriously, who is going to move their money from their current bank to one of these two losers?

[alcibiades_mystery]

22. They already have their money in Goldman and Morgan Stanley

The idea is for them to keep it there. So, how does this help that effort.

If a GS client currently wants to move out of equities into a safer position, he can request that money be transferred to a cash account. At this time, the cash account is a money market, and - oops - just as risky apparently as the equities he wants to transfer out of. With this new move, the cash account will be an FDIC insured "bank" account.

This is currently the arrangement at Smith Barney, which is part of Citigroup. If I want to move money into cash at my Smith barney account, I end up moving it into an FDIC insured cash account, because SB is regulated as a bank. At GS, I wouldn't be able to do that. Now, I will be able to do that at GS. It will also be the arrangement at Merrill, since ML will be connected to B of A, a bank. The idea, again, is to transform uninsured money marlket accounts into insured bank accounts.

The point is not to get NEW money in, put to keep current money there (prevent a run), presumably to forestall a liquidity crisis.