I originally posted on this here: Goldman Sachs lost more than $1 billion on currency trades during the third quarter, but there is more emerging …
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- A complex bet in the foreign-exchange market backfired
- The firm’s foreign-exchange options desk posted a net loss during the period partly because a bet on the value of the dollar versus the Japanese yen went wrong
Harvey Schwartz, the firm’s finance chief, told analysts during an Oct. 17 conference call that the drop in currency-trading revenue was due in part to “difficulty managing inventory,” or the securities a firm holds on its books in order to trade with its clients. He didn’t offer further details.
- a complex options trade tied to the U.S. dollar and Japanese yen had contributed to the decline
This is from The Wall Street Journal (gated, so if you’re unable to access the article try a search of Google news using the headline) : Goldman Trading Slump Tied in Part to Faulty Currency Trade
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My initial reaction to this “complex bet that backfired” is … what b/s. “Difficulty managing inventory”… yeah more b/s.
BUT … maybe I’m wrong to jump to conclusions. It sounds to me like they messed up and are making excuses, but maybe there are problems with their options management/pricing software. Which is even worse then getting a call wrong.
Somewhere in here Goldman’s lost 1 billion USD. Can anyone help them find it? (This is more fun than “Where’s Wally”)
