Goldman: Our Lending and Investing Are Not Really Trading

The Goldman Sachs booth on the floor of the New York Stock Exchange
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The Goldman Sachs booth on the floor of the New York Stock Exchange

Goldman Sachs pretty much mostly trades for clients.

Its principal investing and lending is mostly long term—and certainly isn’t something anyone who knows what they are talking about would call trading.

Sure, the money Goldman is making from the activities it labels with the generic title “Investing and Lending” look exactly how you might expect Goldman trading revenues to look—shooting up 37% year over year.

But Goldman abolished the division of “Trading and Principal Investments” earlier this year. So it can’t be trading, right?

Here’s how Goldman describes its non-trading in its 10K:

“Our investing and lending activities, which are typically longer-term, include the firm’s investing and relationship lending activities across various asset classes, primarily including debt securities and loans, public and private equity securities, and real estate. These activities include investing directly in publicly and privately traded securities and also through certain investment funds that we manage. We also provide financing to our clients. We manage a diversified global portfolio of investments in equity and debt securities and other investments in privately negotiated transactions, leveraged buyouts, acquisitions, and investments in funds managed by external parties.”

See? No trading here. Move along, Paul Volcker. Nothing to see here. Please pay no mind to that $2.7 billion we made doing this longer-term investing this quarter. Look at all those words we just wrote without ever once using the word “trading.”

Also, please note: we were not making a bet against the housing market. It was a hedge.


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