Goldman Sachs (GS) has long said that it doesn’t have a better crystal ball than its (increaingly diminishing number of) rivals. It is simply more agile in responding to changing different market questions. The latest evidence of this is the news that Goldman plans to buy $50 billion in assets from troubled banks and is talking with regulators about the purchase, according to the Financial Times.
The asset acquisition is being billed as part of Goldman’s transition into commercial banking. But it’s hard to escape the impression that Goldman also views this as a far less risky than it might be otherwise, as the Troubled Asset Relief Program (or whatever they’re calling it today) will give them something of a government put if those assets continue to fall. You have to love that deal: if the value improves, Goldman is money good; if it declines, Goldman declares the assets frozen and sells them to the Treasury.
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