The Maneuverings of Goldman Sachs

Goldman Sachs requires its very own regulatory body to oversee all its ingenious moves to make loopholes for itself. Just as it was difficult to distinguish "market making" from proprietary trading as Goldman practiced them, now we have difficulties seeing the difference between hedge funds and credit funds as Goldman defines them. Goldman wants to "loosen proposed limits" of the Volcker Rule, another in a long line of special tactics that includes repeal of Glass Steagall, non-regulation of derivatives, acquiring the perks of a commercial bank, selling fraudulent sub-prime CDOs, betting with CDSs, using HFT and so on and so on.

When will it all end? Will Goldman's manipulation for profit's sake ever end?

Goldman Sachs Seeks Exemption for Bank Stakes in 'Credit Funds'
By Christine Harper - Bloomberg Businessweek

Feb. 14 (Bloomberg) -- Goldman Sachs Group Inc., which says it owns the world’s largest family of so-called mezzanine loan funds, is asking regulators to loosen proposed limits on bank investments in such pools.

Four Goldman Sachs employees and three lawyers from Sullivan & Cromwell LLP met on Feb. 2 with Federal Reserve Board staff to discuss Volcker rule limits on banks’ fund investments, according to a summary published yesterday by the central bank. The Volcker rule limits depository institutions from supplying more than 3 percent of the capital in a hedge fund, private- equity fund or other “covered fund.”

Goldman Sachs “expressed their view that the proposed rule does not permit a banking entity to acquire over 3 percent of the ownership interests in a ‘credit fund’ that is principally engaged in making or acquiring extensions of credit,” according to the Fed summary. “GS explained that investors in credit funds require at least 5 percent ‘skin in the game’ from sponsors.”

Goldman Sachs, which was the most profitable securities firm in Wall Street history before converting to a bank in 2008, typically has supplied about 30 percent of the money to the hedge funds, private-equity funds and credit funds the firm manages for clients. Andrea Raphael, a spokeswoman for New York- based Goldman Sachs, declined to comment.

GS Mezzanine Partners, which raised $13 billion for its fifth fund in 2007, has been extending mezzanine credit to buyout firms and corporations since 1996, according to Goldman Sachs’s website. Mezzanine debt, often used in leveraged buyouts, typically us repaid after bank loans in a bankruptcy and has higher yields than broadly marketed public bonds.

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Occupy the SEC Comment Letter on the Volcker Rule

You can read the letter here