The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Monday August 13 – No precedent, no rescue, no clue?

For reporters on the call, Goldman CFO Viniar unwittingly supplies the headline: 'This is not a rescue'. Grateful sub-editors simply take out the word 'not'. The market has the same fear after the call that it had before: that somewhere out there lies a very large fund that the market disruption will bring down.

The week Wall Street went into meltdown


melt-clipping2.gif

The other big news over the weekend had been the departure of Karl Rove, political fixer for president George W Bush. Fixated on their own worries, Wall Streeters simply ignore this, focusing instead on a rare unscheduled announcement from Goldman Sachs.

Goldman kicks off the week by declaring that it is partnering with a group of outside investors including CV Starr, Perry Capital and Eli Broad, as well as others that do not wish to be named, to inject $3 billion of new equity into the $3.6 billion equity long/short quantitative hedge fund Global Equity Opportunities (GEO), which Goldman manages but had not previously invested in.

If it hasn’t been much of an opportunity before, it certainly is now, Goldman CEO David Viniar tries to argue. "Our collective belief is that the fund is suffering from a market dislocation that does not reflect the fundamental value of the underlying stocks." He goes on: "The events of recent weeks have been unprecedented in their speed and intensity." But, he concludes: "We have seen market dislocations in the past and know they present opportunities."


You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree