Living the Good Life at Goldman Sachs

[TomClash]

Source: Crains New York

Living the good life at Goldman Sachs By Aaron Elstein


Wall Street's top trading firm saw $100 million-plus in revenue more days than not last quarter, comfortably bankrolling an 80% hike in average pay for its 31,700-strong work force.


It's no secret that business lately has been very, very good for Goldman Sachs Group Inc. On Wednesday, the firm discretely offered some details on just how sweet it is.

A whopping 36 times in the third quarter, the firm generated more than $100 million in revenue in a single day just from trading stocks, bonds and other instruments. That translates to 55% of the time, considering there were 65 trading days last quarter. The number of days Goldman traders lost money? Just one.

That goes a long way to explaining how the bank generated pretax earnings of $4.5 billion from trading in a mere 90-day stretch over the summer, a stunning contrast to the $760 million loss it posted in the year-earlier period.

The sharp rebound in profitability means Goldman is able to literally shower its fortunate employees with compensation. The firm has so far this year set aside $16.7 billion to cover compensation and benefits costs for its work force of 31,700. That's a 60% increase over the comparable period a year ago. Yet average compensation has risen by 80%, to $658,000 per person, because the firm employs fewer people.

The daily trading data, disclosed deep in a document filed with the Securities & Exchange Commission, starkly illustrate the degree to which Goldman has benefited from the demise of competitors like Bear Stearns and Lehman Brothers, while accommodating policymakers have slashed interest rates to nearly zero in an effort to revive the nation's devastated economy. Those ultra-low interest rates mean funding costs for Goldman are miniscule and make it far easier for the firm, as well as other banks, to turn a profit.


Read more: http://www.crainsnewyork.com/article/20091104/FREE/911049981

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There are still "Masters of the Universe." Insert expletive here: ________________________

[Turbineguy]

1. The standard response:

"Where are all the customers' yachts?"