Dick Bove seemed to think so earlier, saying “buy” Goldman, just as the stock fell 5 per cent. But there’s been such confusion (and a lack of detail) on the Obama administration’s proposals that we should spare the Rochdale Securities’ man the chance to revise his views.
Meanwhile, Krishna Guha, over on the FT’s Money Supply blog, asks a fair question: can’t Goldman (and Morgan Stanley, for that matter) simply give up their bank charters and therefore avoid all the proposals on proprietary trading, hedge funds and private equity?
The answer seems to be: just let ‘em try!
If the Volcker rule, in whatever legislative shape it eventually takes, were to let the likes of Goldman off the hook — while simultaneously dismembering its few remaining competitors — it is quite likely that rioting would break out on American streets.
Goldman knows this, of course, and during the bank’s Q4 earnings call earlier on Thursday, chief financial officer David Viniar specifically said that Goldman “does not even think about” exiting its status as a bank holding company.
Goldman would quite literally have to go ex-US if it were to cock such a public snoot at the spirit of these proposed reforms.
Better, perhaps, to take advantage of this Supreme Court decision.
Related links:
The Volcker rule – Crook blog
Obama and US banks – Lex