Why Harvey won’t answer July 17, 2013 at 6:24 am
Matt Levine says, apropos the Goldman earnings call, that
someone at Reuters counted the number of times he [Harvey Schwartz, Goldman CFO] was asked to quantify Goldman’s leverage ratio (eight) and the number of times he did (zero).
Matt’s then amusingly unkind about Goldman’s explanatory note. He’s kinda right, it does bluster. So what’s the real reason for the silence? Well, I don’t know, but perhaps GS has a trick (or more likely at least 7 tricks) for getting less leveraged. You know, repo conduits, new netting schemes, securitisations with retained thick equity, that kind of stuff. But Harvey doesn’t know which of them will work yet, and maybe his people have to eat a few lunches in Norwalk to find out. So he’s keeping stumm until he finds out what works and how much good it will do. That will tell him if he needs to, you know, retain earnings or something distasteful like that.