Goldman Sachs's CFO: We're A Financial Holding Company!

[DrDoom]

And the BS continues...nothing was learned. This is just the Federal Reserve greasing the skids for Goldman when Congress legislates Cap and Tax and the next Gov't sanctioned expansion/bubble takes off and creates an even larger wealth disparity in the years to come. Ciao middle class...hello neo-feudal economy of debt peonage. Follow the cheap money..hedge yourselves. in the meantime.....Al Gore is!

Goldman Sachs CFO just sent an email to Goldman employees announcing that the bank was now a "financial holding company."

The designation of Goldman as a Financial Holding Company was granted by the Federal Reserve on August 14th, according to a person familiar wth the matter. Goldman only announced the news today because it wanted to avoid pre-empting the official announcement by the Federal Reserve, which only announces changes in designation periodically.

Goldman had said it planned to seek FHC status when it first converted to a Bank Holding Company. The designation allows a bank to engage in non-banking, financial activitties. Of course, Goldman has been doing this all along under temporary permission from the Fed.

"It's a natural progression from being a Bank Holding Company," Goldman Sachs spokesman Lucas Van Praag told us. "We've said it was our intention to become a FHC since becoming a BHC (check our most recent 10-K for more on the subject). FHCs are permitted to engage in a broad range of financial and other activities. We do not expect that our change of status will materially affect our business strategy."

Apparently many banks, including Fifth Third and Bank of America, are both Bank Holding Companies and Financial Holding Companies. Morgan Stanley applied to become a financial holding company long ago.

"The email says that Goldman is now 'a type of bank holding company that is permitted to engage in a broad range of financial and related activities," one Goldman insider tells us. "Which is murky!"

Here's the Federal Reserve's definition of a FHC.

A financial entity engaged in a broad range of banking-related activities, created by the Gramm-Leach-Bliley Act of 1999. These activities include: insurance underwriting, securities dealing and underwriting, financial and investment advisory services, merchant banking, issuing or selling securitized interests in bank-eligible assets, and generally engaging in any non-banking activity authorized by the Bank Holding Company Act. The Federal Reserve Board is responsible for supervising the financial condition and activities of financial holding companies. Similarly, any non-bank commercial company that is predominantly engaged in financial activities, earning 85% or more of its gross revenues from financial services, may choose to become a financial holding company. These companies are required to sell any non-financial (commercial) businesses within ten years.

[ArcticSplash]

In other words, they're in the business of selling your grandmother down the river to make a quick buck.

That's pretty much what they do after they pour themselves a pot of coffee and get to a hard day's work of raping America's wealth.