Blankfein went on the charm offensive on Friday and accepted an interview with Charlie Rose.
In case you we’re sitting at home on a Friday night at 11 PM, here’s what you missed:
Still insisting Goldman didn’t make any money, despite writing in an email, we lost money, then we made more because of the shorts: “We lost money in housing. We just didn’t lose a lot.”
He’s a big fan of the Dodd bill: “But even the outline of the Dodd bill, I’m very, very constructive and very positive on all the aspects.”
But not of the Volcker Rule: “I think there are aspects of the Volcker rule that go too far.” (There is a big difference between the original Volcker Rule and Dodd’s version of it. Dodd’s version leaves the option open to apply the ban on prop trading. It doesn’t ban prop trading right now. And there’s talk of weakening it further.)
On Goldman’s reputation in the industry: “Our reputation is as effective risk managers…”
He regrets hiding out from the public. “[Never appearing on a general interest news show] was probably a mistake. Now we have a lot of work to do explaining to people what it is that we do.”
On trading being called “betting”: You can characterise anything as a bet. You can call it a casino. People call futures markets, they call the stock exchange a casino. The stock exchange a casino? Well, people can make and people can lose. But really, there’s an extraordinary social purpose in allowing people to take..Let’s say I’m going to go to Goldman Sachs and say, I would like to sell oil forward at $80 a barrel. Is that person betting on the price of oil? I guess you could say that. But what is that person really doing? They are hedging a risk that will allow that company to go out and invest $10 billion in extracting oil out of the market. That person is selling oil, but as a result of selling oil forward, what does the world get? It gets more oil.”
On how Goldman market-makes just like the New York Stock Exchange does: “Instead of Goldman use the word New York Stock Exchange. It’s just we’re like a machine that lets people buy and sell what they want to buy and sell.”
But of course the NYSE doesn’t prop trade, like Goldman does, and which is now being considered a conflict of interest. Blankfein understands that and says something must change: “We have to do more about examining the crosscurrents and we have to look at the conflicts inherent in the business where you’re a go-between between buyers and sellers. People who need to invest money and people who need those investments. We’re always intermediating in our business between interests that are in conflict, and we help to resolve those conflicts.”
He takes a dig at reporters, responding to Rose’s saying he spoke with a respected journalist: “That is redundant, ‘respected journalist.'”
On staying CEO: “That’s my expectation and that’s my duty. And I feel that.”
Watch the interview tonight and every night this week on Bloomberg at eight and 10 PM.
And see who the winners and losers are in the Goldman vs. SEC fraud case here –>