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Goldman Sachs traders in London and New York made a daily profit of more than $100 million (£58.8 million) on an astonishing 46 days during the past quarter.
The record figure revealed by the bank this afternoon meant it broke the $100 million-a-day barrier on three out of every four working days.
As market conditions improved during the quarter, it easily beat its 34-day record for making that figure in January, February and March.
Goldman lost money on trading activities on only two days in April, May and June, compared with eight days in the preceding three months.
Its record profits and huge likely bonuses for the quarter have sparked an unprecedented backlash against the bank, with many critics arguing that it only survived the banking crisis because the financial system was bailed out by taxpayers.
The extraordinary profits were the result of it being prepared to take more risks than rivals, although with US government support via the Federal Deposit Insurance scheme guaranteeing some of its debt, its borrowing costs are artificially low, making it easier to turn a profit.
Goldman's filings in the US today revealed that it put at risk $245 million a day on average, compared with $240 million in the previous quarter, with the extra $5 million mostly coming from potential losses from bets in equities.
Details of the bank's extraordinary moneymaking prowess will make it even harder for chief executive Lloyd Blankfein to fend off the barrage of attacks facing the bank and its employees.
Recent weeks have seen it accused in some sections of the media of actually helping to cause the credit crunch and now profiting from the collapse of its rivals. Rolling Stone magazine last month described it as a “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
Even the most respected of Wall Street analysts have put down its recent success to the lack of competition now its arch rivals have either disappeared or savagely reined back their investment banking operations.
Anger has been riding high since the company reported a record $3.4 billion profit for the second quarter, meaning staff are in line for average bonuses of £500,000.
Blankfein's management team recently warned staff to be careful not to be seen spending extravagantly in a way that would bring the bank into disrepute.
Reader views (7)
This is done by "Flash Trading". The companies that can afford and run "super computers" now have the edge in the information age. It's cheating just like Madoff. The small investor does not stand a chance.
- Never Eat Tuna Again, London
Quote: Hansel, London. Capitalism has been around since year dot in one form or another, communism is dead and socialism is on its last legs (in Europe especially). The system may not be the best but as it stands it's all we have.
Not exactly, Hansel; barter is far older than Capitalism.
The only trouble with barter is; you can only have so much before it becomes a burden on you etc; whilst with Capitalism and cash; you can hold trillions without it becoming a burden on you. Plus you get the added interest payments for doing nothing at all etc; which in turn makes your trillions into tens of trillions.
Now if you trade three sheep for one cow; you have lamb and beef for each trader etc; but if you have ten cows and thirty sheep; you have to feed and look after them etc.
Capitalism knows this added expense and added burden; so barter is of no use to Capitalists etc.
It is a fact that the Adam Smith Institute knew this long ago; and many say it was they that ended the slave trade; not William Wilberforce etc.
They worked out; it was far more expensive to buy and look after slaves; than it was to employ the unemployed millions for pitiful wages etc; this way they never had to buy, feed, or care for their slaves etc; and those they employed that were killed or taken ill; could easily be replaced free of charge from the other remaining unemployed that filled our cities etc.
This is Capitalism; not Barter etc.
When you have few workers you just import more
- Mickinlondon, london.
If Goldman Sachs did not control the media - it would ask Where did the money come from?
Did it come from GS mislead & bet against the 'low hanging investment bank fruit' (given taxpayers money by their political relatives)? So that when the public discover they have lost a huge sum - it can be blamed on 'other' banks.
Did it come from the government printing £trns - then making a deal with GS- they give the impression they are successful which makes the politicians look right in return for huge short term bonuses. By the time the public discover quantitative easing has halved their wealth employees will have bought UK Plc.
Did it come from 100% bets. Like dropping MBSs on top insider info. Like raising fictional money for companies that should have been sunk by debt. Like selling government securities promising fictional returns.
how can we believe GS is genuinely successful when they can't prove it? & when the lie is in such high demand
- Oilthieves, Bucks
To all the naysayes and critics of banking, please feel free to come up with a better system that complements the human spirit for risk and advancement whilst maintaining a sustainable a competitive facility for commerce and distribution.
Oh, thought so……..
Capitalism has been around since year dot in one form or another, communism is dead and socialism is on it's last legs (in Europe especially). The system may not be the best but as it stands it's all we have.
Goldmans are merely good in thier particular market.
- Hansel, London
Goldman Sacks of cash + Barclays and HSBC profits in a time of recession...Now how could that be.?...Well it seems that the technology of microsecond dealing along with microselling and microbuying is the answer...Superfast computing, networking and high speed trading is the new game in town and if you are ahead of the game you can make lots of money by controlling the market.
Basically it is cheating...Heads I win, tails you lose....Just as casinos never loose.
So the best bet is if you are in with the in crowd, you are a winner. But if you are not part of this new technological game, stay well away from the stock market otherwise you could loose lots...Wait and see the next crash.
The fear now is that the pension schemes will be slow to react and could continue loosing out and also the large bailed out banks and building societies will no longer be part of the in crowd and they will also loose out, resulting in massive public support from the tax payer...Question is how much more cash/ financial support can the government provide to prop up the loosers?...By then I fear that there will be a massive flight of capital from the UK by the "in crowd".
- Ian, Inverurie, Aberdeenshire.
If the British or American governments will lend me a few billion, win or lose; I will make millions a day as well.
- Mickinlondon, london.
I really don't see why people should be angry - the system needs liquidity, hence trading, hence profits can be made. If the other side thinks the price is wrong then there's no trade so it's up to them to trade better than Goldman. And Goldman themselves never wanted or needed Govt money - they were forced into it to try and make the system look sound. Plus they will pay tax on those profits as will their employess - whether income or VAT - which benefits us all. And why anyone should credit Rolling Stone with any great insight into finance is beyond me.
- Peter Bench, London
