The Volcker Rule

clipped from www.minyanville.com For his quick take, we checked in this morning with Peter Morici, a Professor at the Smith School of Business at the University of Maryland and former Chief Economist at the US International Trade Commission. Dr. Morici argues that the President has it all very wrong: Hedge funds, private equity funds, and proprietary securities trading aren’t what got the banks into trouble. Banks went bust or required taxpayer bailouts, he says, because of poorly considered loans and the financial products created from those loans. Prohibiting securities trading by banks and limiting their size, he says, wouldn’t stop those same mistakes from being repeated. “What happened yesterday not only closes the barn door after the horse is out, but it closes the door to the house instead of the barn,” the professor tells us. “This doesn’t do anything. It just creates a nuisance.”

Goldman Sachs Buy Sell or Hold?

I recommended against buying this one on the earnings announcement and now believe it will land in the 135-145 range. No one ever got hurt waiting for a pullback.

clipped from online.barrons.com The selloff in shares of Goldman and its peers last week could represent a buying opportunity. The major firms remain highly profitable and they've already curbed their proprietary trading. Morgan Stanley and JPMorgan are largely out of proprietary trading, while Goldman is believed to have scaled back its Special Situations Group, which invests firm capital around the globe. On a sum-of-the-parts basis, Goldman looks intriguing because of the value of its nontrading operations, including Goldman Sachs Asset Management, which runs $871 billion and could be worth $15 billion. If Goldman's investment-banking advisory were spun off and got the high valuation of banking boutique Greenhill (GHL), it could be worth $15 billion, too. That suggests investors are paying about book value for the rest of the firm, whose market value is $90 billion.