Gasparino: Goldman's Cohn Says No Acquisitions on Horizon
FBN's Charlie Gasparino weighs in on the future of Goldman Sachs.
- Duration 5:56
- Date May 31, 2012
FBN's Charlie Gasparino weighs in on the future of Goldman Sachs.
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-- feel it until -- Ari Goldman Sachs CEO Gary Kohn speaking at says Sanford Bernstein conference today here in New York giving investors a sneak -- on changes happening.
Inside the Wall Street powerhouse Charlie Gasparino has -- -- consumer he alone I'm.
That's beyond just for president of the I don't know yet and aren't you hard to -- he's the president clo.
You -- -- much better by the way -- yeah its number two.
Has that -- to Lloyd Blankfein who kind of interest in conference.
I smokes a tolerant and my producer and really issue this guys -- Adidas America.
She looks so innocent Danone says anything to a but we got her in.
I also listen to on the Goldman Sachs website was -- was webcast kind of -- Really interest in in in this sense.
Gary -- who is part of the trading side of the balance vehicle -- Lloyd Blankfein is number two since they both took over.
As president CEO in 2006.
Probably became CEO at that point out for for Hank Paulson.
It was -- shift from the investment bankers led by Hank Paulson when he went to treasury today traders.
Now they're stuck with a firm that cannot do the traditional stuff that they like to -- which means taking risk and trading.
And through this speech you can see Gary -- seen how they're basically changed firm right now or at least change what it wouldn't talk about number one.
We should point out that kind of get this off the table no big acquisitions in the in the horizon you're saying -- Gary -- was pretty explicit look basically every day -- -- landscape.
They don't say don't see anything near -- near term we released need even near medium term.
Out there that they're gonna bet they're gonna buy at least on a sort of -- transformative basis you know I'm saying you're not gonna see.
I don't think Goldman Sachs and Morgan Stanley merchant -- any -- we're Goldman Sachs be buoyed by to be book by Deutsche Bank's number two we said.
Goldman Sachs is now preparing and is prepared for an EU breakup kind of interest and I will say this.
Every bank -- -- street right now is preparing for.
Not just Greece but the contingency that there is no more EU and there'd be ended and clients -- -- working overtime and he did say Goldman Sachs and prepare for this.
Firm -- firm is clearly reduced its exposure that much as they can to York we should point out that this is going on every firm.
Goldman is big because they're big global derivatives -- they trade all this stuff of course across the globe and the EU break -- is on their mind according -- color number three.
Kind of interest in gold with a switch into business model with a lot less trading of some of the stuff that we've been doing here we the first report about a business model change.
Less leverage I think -- systems like thirteen times leverage have much comes awfully low but that's what he said a mature and how how he's -- -- you know this is the -- of tweaking leverage to make it sound less -- what it really is but -- you know thirteen times leverage means generally you have.
-- you have third you take risk thirteen does more than your capital that you have on hand.
You borrow that much more.
That seems really low particularly for Goldman and basically saying -- switch into -- model.
At least that's more client focused they will tell you that this is always been the case.
But clearly anybody knows Goldman's business model -- last ten years not the case at all this was a trading firm.
Often traded against its clients when it would hit -- client relationship someone in the trading desk would do other stuff didn't care you know was a blind broker.
That's what they're gonna do -- to becoming less treating focus so it's kind of adjusting it's that kind where I guess chancellor Goldman Sachs.
Up have to get -- -- you know attention fees that you are listening to the call I like today act as you hear tone especially if somebody you listen to write for.
So what was there told Mike on the European was it like.
We're prepared you know they break up we have good or was it like -- you know we no matter -- on I think I would say about these Wall Street guys is that they don't.
Rarely do they display sort of fear in their tone.
Don't tell their -- -- and so -- -- never should I never I never I rarely now sometimes young and sometimes they -- obviously but.
I think they they were pretty he was pretty -- adamant and it it it sound like.
-- based on -- we are expected or were prepared which which have another big -- they are expecting I think.
Most of these firms are are coming to the conclusion that the that the you were euro's survival is is it is a toss.
And it when something's 5050.
And -- regulated bank you have to be prepared to take immediate action and that's what they're doing they're going through.
-- go to all their contracts so they are clearly prepared not just for Greece leaving the for the whole thing to come unglued they have to be -- Broadway.
If they're not to completed -- this could destroy this is -- really hurt they're about their balance sheets.
Because as you know listen someone sneezes and JPMorgan loses you know in Europe JPMorgan -- you know two billion dollars from one quarter gonna lose probably.
Up to five I think.
When the strictest out -- that doesn't mean they're gonna take a loss on the back on the on the books -- to see -- losing money.
But -- they that was a big demo on the -- trading loss is about this market.
Of derivatives global currencies the whole thing -- the all these sort of -- connected this of of world banking and finance.
And if the Euro -- -- It's going to be more than two billion on these banks ballot -- -- so so PRD's would you basis as we are we are preparing.
And I will tell you this -- I -- those people this is a big story right now.
Every single major bank right now -- Wall Street.
Is prepare for that contingency.
How -- -- -- if you know anybody compliance departments I do they are working overtime on this stuff and it's kind of scary situation because.
You know it's like Y two K room you know it could be really bad.
Break it it into power and won't Tori could go by and not be art could be the waiting -- -- out west and license last summer we've been waiting for some kind of conclusion.
Whether it's positive figure this about how we get is this inching along where there's sort of a band April China.
Everybody says -- -- modeling the -- muddling modeling worse than the than the alternative obviously ripe for a follow up its -- to blow up like you know at some point.
You know you -- you know that you have bite the bullet and that's where but he's hoping the ECB does OK Charlie Gasparino thanks so much we appreciate it we've got some breaking.