[Annotated] Goldman Sags

Goldman Sags^[각주:1]

For the first time, the famous investment bank has more of a business than an image problem

By Tradition^[각주:2], Goldman Sachs makes risky financial wagers^[각주:3] and stays icy cool^[각주:4] under pressure^[각주:5]. A bad trade on^[각주:6] Treasury bonds in^[각주:7] 1986 almost killed it, but was eventually cauterized^[각주:8]. The firm's "big short" in early 2007, when it bet that subprime^[각주:9] securities^[각주:10] would tumble^[각주:11], helped it to book profits of^[각주:12] $14bn in 2008-09 and to perform relatively well during the worst financial crisis for 80 years. Goldman also values candour^[각주:13], at least inside the firm. In this spirit it is time to acknowledge that the bank's strategic direction^[각주:14] is beginning to feel like a bum trade^[각주:15]. Its defence is that it is no worse than its group of peers, but being average on Wall Street is a mug's game^[각주:16] and the antithesis of^[각주:17] the Goldman way. 

While outside think that Goldman's alumni^[각주:18] run the world, on Wall Street the firm's aura^[각주:19] has dimmed^[각주:20]. Rival banks view it with^[각주:21] indifference^[각주:22], not awe. After shining in the years after the crisis, since 2012 its total return^[각주:23] (share price gain plus dividends) has lagged behind^[각주:24] the average of its four big American rivals by 36%. Other banks have caught up and Goldman's trading arm^[각주:25], which executes deals for clients, is misfiring^[각주:26], with its market share dropping. It has struggled to adapt to^[각주:27] placid markets^[각주:28] and a clampdown on^[각주:29] proprietary trading^[각주:30] (trading for your own profit).

Inevitably that gives rise to doubts about^[각주:31] the firm's strategy, which is to slash costs^[각주:32] and sit tight^[각주:33], hoping the industry's nuclear winter^[각주:34] ends. So while lower bonuses mean the pay bill^[각주:35] is down by 42% since 2007, there has been no wholesale^[각주:36] retreat from^[각주:37] the main businesses - advising and lending to companies, trading securities and asset management^[각주:38]. Meanwhile, the bank is grappling with three problems^[각주:39]: mediocre^[각주:40] profitability^[각주:41], unconvincing^[각주:42] capital allocation^[각주:43] and a tricky management succession^[각주:44]. 

Back when it was a partnership, Goldman was more profitable than Facebook is now. Its return on equity^[각주:45] was 38% in 1998, before it went public^[각주:46]. In 2007 its ROE was 29%, but it fell to 9%^[각주:47] in the most recent quarter. Two-thirds of this drop reflects^[각주:48] tougher capital rules. Its level of ROE matches the average of^[각주:49] JPMorgan, Morgan Stanley, Citigroup and Bank of America. Investors expect a mild recovery^[각주:50], but do not expect Goldman to be exceptional^[각주:51], so its shares do not trade on a notably^[각주:52] superior multiple^[각주:53] of book value^[각주:54], as they usually did in the glory years between 2006 and 2013.

Another gauge^[각주:55] is profits relative to^[각주:56] risk-weighted assets^[각주:57], a measure that^[각주:58] regulators^[각주:59] use to calibrate^[각주:60] bank's risk and size. For every $100 of such assets Goldman made $1.9 of pre-tax profits in^[각주:61] 2016, less than the peer group's^[각주:62] average of $2.0. Each bank has a different mix of businesses, but you can compare Goldman to a best-in-class^[각주:63] "clone" made up of^[각주:64] JPMorgan's investment banking and asset-management^[각주:65] divisions^[각주:66]. The clone made $2.2. (Goldman says that this comparison^[각주:67] is too crude^[각주:68].) 

Mediocre^[각주:69] profitability^[각주:70] reflects unwieldy^[각주:71] asset allocation^[각주:72]. Goldman has toiled to^[각주:73] cut its balance-sheet^[각주:74], particularly in bond-trading^[각주:75]. But it has been hit especially hard by new "Basel 3" rules which determine how its risk-weighted-assets are calculated^[각주:76]. As a result Goldman's have risen by 35%^[각주:77] since 2012. The trading arm ties up^[각주:78] two-thirds of this, especially its derivatives^[각주:79] book^[각주:80]. Its lending operation^[각주:81] has grown, with exposures to^[각주:82] higher-risk firms - those with a credit rating of^[각주:83] BBB or less - rising 151% to $129bn. 

Goldman does not reveal the ROEs of these operating^[각주:84] segments^[각주:85] but they can be imputed^[각주:86]. In 2016 the trading unit^[각주:87] appears to have had an ROE of 7% and its lending unit 5%. Most firms would have wielded the knife deeper^[각주:88]. The bank has new projects, such as its small online consumer bank. It has returned cash to shareholders. But its core strategy^[각주:89] is to wait for trading to^[각주:90] recover^[각주:91]. This may happen. Volatility^[각주:92] may pick up^[각주:93], European competitors might quit the game, or emerging economies could boom^[각주:94]. 

It is less clear how any of these events would lift the trading division's returns to^[각주:95] a punchy level^[각주:96]. There have been highs and lows since^[각주:97] the crisis, but its average ROE has been only 10%, based on current capital rules. If the terrible trio of^[각주:98] Barclays, Deutsche Bank and Credit Suisse quit the the trading division's ROE would be a lukewarm 9%. China's markets are booming but local firms dominate, and Goldman is weak in India.

Goldman's "hang-in-there^[각주:99]" strategy feeds into the discussion over^[각주:100] succession. Lloyd Blankfein has been the boss since 2006, and - it must be said - over the entire period has the best record of any banker other than Jamie Dimon at JPMorgan. But more recently Mr Blankfein may have been too tolerant of^[각주:101] the trading division, where he and several lieutenants^[각주:102] made their names^[각주:103]. 

The problem is that even if he goes, there is no quick fix^[각주:104]. The firm's other businesses - advising companies and asset management - are excellent but mature^[각주:105]. A few romantics^[각주:106] imagine Goldman could return to being a partnership, but that is silly. In 1998 the partners had $6bn of capital tied up in it; now they would need $97bn to buy it. Might Goldman combine with a commercial bank^[각주:107], a model it flirted with^[각주:108] in the 1990s and which JPMorgan has perfected^[각주:109]? The only major lender^[각주:110] without a big investment bank is Wells Fargo, and the combined firm would have $3trn of assets, enough to make regulators ululate^[각주:111]. 

The wonder years

Goldman says that it has a "record of adapting to changing environments" and notes that its average ROE over the past ten years was eight percentage points above the average of its peers. This legacy^[각주:112] means that the board^[각주:113] will probably stick with the plan^[각주:114] and the man for at least a year. After that, mediocre performance would corrode^[각주:115] morale^[각주:116] and upset external shareholders^[각주:117], who own 90% of the bank. If no trading upsurge^[각주:118] comes, Goldman may have to shrink more^[각주:119]. Its reign^[각주:120] has been short. In the 1980s it was not yet top dog on^[각주:121] Wall Street and was a nonentity abroad^[각주:122]. People may look back with^[각주:123] puzzlement^[각주:124] at the two decades when Goldman Sachs was the undisputed king of^[각주:125] the investment-banking industry and investment banking seemed to rule the world. 

1. sag ; 2. 약화되다, (수적으로) 줄어들다 [본문으로]
2. by tradition ; 전통에 의해[의하면], 구전으로[에 의하면] [본문으로]
3. wager ; [명사] (구식 또는 격식) 내기, 도박, 노름 [본문으로]
4. stay[remain, keep] cool ; 냉정을 잃지 않다, 침착하게 행동하다 [본문으로]
5. under pressure ; 2. (…을 하도록) 강요당하는[압력을 받는] 3. 스트레스를 받는[압박감을 느끼는] [본문으로]
6. trade on ;(특히 부당하게) ~을 이용하다 ; [VERB] to exploit or take advantage of [본문으로]
7. treasury bond ; 재무부 발행의 장기 채권, 만기 10년 이상의 국채, (미국의) 재무성 발행의 장기 채권, 국채 [본문으로]
8. cauterize ; [타동사][VN] (의학) (출혈이나 감염을 막기 위해 상처를) 지지다[소작하다] ;; 미국∙영국 [|kɔ:təraɪz] [본문으로]
9. subprime ; [형용사] 최고급 다음가는; 최우대 대출 금리보다 낮은 [본문으로]
10. security ; 5. FOR A LOAN | [U , C] 담보 6. SHARES IN COMPANY | [pl.] securities (금융) 유가 증권 [본문으로]
11. tumble ; 3. [자동사][V] (가치・가격 등이) 빠르게 하락하다[폭락하다] [본문으로]
12. book profit ; A gain on an investment that has not yet been realized. That is, book profit occurs when the current price of a security is higher than the price the holder paid for it, but the holder still owns the security. As a result, there is the possibility that the book profit might be erased if the price goes back down. A book profit represents an increase in one's net worth, but it may or may not affect one's lifestyle. Under most circumstances, one is not taxed for book profit; the government waits until gains and losses are realized. See also: Paper loss. [본문으로]
13. candour ; [U] 솔직함 ;; 미국∙영국 [|kӕndə(r)] ;; 참고 ; candid [본문으로]
14. strategic direction ; 전략적 방향 [본문으로]
15. bum ; [명사 앞에만 씀] (비격식) 보잘것없는 ; 잘못된, ((~·mer; ~·mest)) [속어] 하찮은; 화나게 하는, 불쾌한, 매우 싫은 [본문으로]
16. mug's game ;(영·구어) 바보 짓, 쓸데없는 헛일, 얼빠진[바보 같은] 짓 [본문으로]
17. antithesis ; (pl. an・tith・eses / ӕn'tITəsiːz /), [C , U], (격식) 1. 반대(되는 것) [본문으로]
18. alumni ; [pl.] (특히 美) 졸업생들 ;; [단수형] alumnus [본문으로]
19. aura ; [명사] ~ (of sth) (어떤 사람이나 장소에 서려 있는 독특한) 기운[분위기] [본문으로]
20. dim ; 2. FEELING/QUALITY | (감정・특성이) 약해지다[수그러들다] [본문으로]
21. view ; [vn] 1. THINK ABOUT STH | ~ sb/sth as sth | ~ sb/sth with sth (…라고) 여기다[보다/생각하다] [본문으로]
22. indifference ; [U , sing.] ~ (to sb/sth) 무관심, 무심 [본문으로]
23. total return ; (경제) 투자총수익 [본문으로]
24. lag[fall] behind ; …보다 뒤떨어지다, 뒤(처)지다, (발달이) 낙후되다 [본문으로]
25. arm ; 6. OF ORGANIZATION | [주로 단수로] ~ (of sth) (조직의) 부문 [본문으로]
26. misfire ; [v], (참고: backfire) 1. (계획・농담이) 의도하던 효과를 못 얻다, 불발에 그치다 [본문으로]
27. adapt to ; ~에 적응하다 [본문으로]
28. placid ; 1. (사람・동물이) (쉽게 동요하거나 짜증내지 않고) 차분한[얌전한] 2. 잔잔한 [본문으로]
29. clampdown ; [명사] (주로 단수로) (기습) 단속 [본문으로]
30. proprietary trading ; Proprietary trading occurs when a firm or bank invests for its own direct gain instead of earning commission dollars by trading on behalf of its clients. This type of trading occurs when a firm decides to profit from the market rather than from the thin-margin commissions it makes from processing trades. Firms or banks that engage in proprietary trading believe that they have a competitive advantage that will enable them to earn excess returns. [본문으로]
31. give rise to ; [동사] ~이 생기게 하다. 낳다; 일으키다. ; 동의어 ;; originate; cause. [본문으로]
32. slash ; slash ; 2. [흔히 수동태로,흔히 신문에서] 대폭 줄이다[낮추다] [본문으로]
33. sit tight ; 2. (결심을 하거나 조치를 취하지 않고) 현 상황을 고수하다[때를 기다리며 버티다] [본문으로]
34. nuclear winter ; [명사] 핵겨울(핵전쟁 후에 나타나게 될 것으로 여겨지는 추위 현상) [본문으로]
35. pay bill ; [명사] 급료[봉급] 명세 [본문으로]
36. wholesale ; 2. (특히 안 좋은 것이) 대량의, 다수의, 대규모의 [본문으로]
37. retreat from ; …로부터 후퇴하다[물러나다] [본문으로]
38. asset management ; (금융) 자산 관리 [본문으로]
39. grapple with ; ~을 해결하려고 노력하다 ;; to try to deal with a difficult situation or solve a difficult problem [본문으로]
40. mediocre ; [형용사] (못마땅함) 보통 밖에 안 되는, 썩 좋지는 않은 ;; 미국식 [|mi:di|oʊkər] 영국식 [|mi:di|əʊkə(r)] [본문으로]
41. profitability ; [명사] 수익성, 이윤율 [본문으로]
42. unconvincing ; [형용사] 설득력이 없는, 납득하기 어려운, 비현실적인 [본문으로]
43. capital allocation ; 자본배분 [본문으로]
44. succession of management ; 경영권 승계 [본문으로]
45. return on equity ; [회계] 자기 자본 수익률 ((순이익을 자기 자본으로 나눈 비율; 略 ROE)) [본문으로]
46. go public ; 1. (비밀을) 공개하다 2. 기업이 주식을 공개[상장]하다 [본문으로]
47. fall to ..% ; …(%) 로 떨어지다. [본문으로]
48. reflect ; [타동사] 4. 반영하다, 나타내다 [본문으로]
49. match ; 2. BE THE SAME | 일치하다, 아주 비슷하다 4. BE EQUAL/BETTER | [타동사][VN] 맞먹다, 필적[대등]하다 [본문으로]
50. recovery ; 2. [U , C] [주로 단수로] ~ (in sth) (경제 등의) 회복 [본문으로]
51. exceptional ; 1. 이례적일 정도로 우수한, 특출한 2. 극히 예외적인 [본문으로]
52. notably ; 1. 특히 2. 현저히, 뚜렷이 [본문으로]
53. multiple ;[명사] 1. (수학) 배수 [본문으로]
54. book value ; [회계] 장부 가격 ((略 bv))(opp. market value) ; 1주(株)당 순자산 [본문으로]
55. gauge ; 5. [주로 단수로] ~ (of sth) (평가・판단 등의) 기준 ;; 미국∙영국 [geɪdƷ] [본문으로]
56. relative to ; …에 관하여, 관한 ;; 미국·영국 [|relətɪv] [본문으로]
57. risk-weighted assets ; (경제) 위험가중자산(危險加重資産) ;; Risk-weighted assets are used to determine the minimum amount of capital that must be held by banks and other institutions to reduce the risk of insolvency. The capital requirement is based on a risk assessment for each type of bank asset. For example, a loan that is secured by a letter of credit is considered to be riskier and requires more capital than a mortgage loan that is secured with collateral. [본문으로]
58. measure ; 4. WAY OF SHOWING/JUDGING | [C] (판단・측정의) 척도[기준] [본문으로]
59. regulator ; 1. (산업・상업 분야의) 규제[단속] 기관[담당자] [본문으로]
60. calibrate ; [타동사][VN] (전문 용어) (계기 등에) 눈금을 매기다 ;; 미국∙영국 [|kӕlɪbreɪt] [본문으로]
61. pretax profit ;[명사] (회계세무) 세전 이익, 세 공제전 이윤, 세 포함 이윤[이익] ;; 참고 ; after-tax [본문으로]
62. peer group ; [명사] (나이・사회적 신분이 같은) 또래[동배] 집단, 동종 업자들, 업계 [본문으로]
63. best-in-class ; 동종 업계에서 최고인 [본문으로]
64. be made up of ; ~로 구성되다 ;; 참고 ; be composed of [본문으로]
65. asset management ; (금융) 자산 관리 [본문으로]
66. asset management division ; (법률) 자산운용과 [본문으로]
67. comparison ; 1. [U] ~ (with sb/sth) (~와) 비교함 [본문으로]
68. crude ; (cruder , cru・dest) 1. 대충의, 대강의 2. (물건이나 예술 작품이) 대충 만든 [본문으로]
69. mediocre ; [형용사] (못마땅함) 보통 밖에 안 되는, 썩 좋지는 않은 ;; 미국식 [|mi:di|oʊkər] 영국식 [|mi:di|əʊkə(r)] [본문으로]
70. profitability ; [명사] 수익성, 이윤율 [본문으로]
71. unwieldy ; [형용사] 1. (사물이) (크기・모양・무게 때문에) 다루기 불편한[거추장스러운] 2. (시스템・사람들 집단이) (너무 크거나 복잡해서) 통제[조직]하기 힘든 ;; 미국∙영국 [ʌn|wi:ldi] [본문으로]
72. asset allocation ; (자산의 안전과 고수익을 위한) 자산 배분 [본문으로]
73. toil ; [v], (격식) 1. (장시간) 힘들게[고생스럽게] 일하다 2. [자,타동사][+ adv. / prep.] (힘겹게) 느릿느릿 움직이다 [본문으로]
74. balance sheet ; [명사] (금융) 대차 대조표, 재정 증명서 [본문으로]
75. bond-trading ; [명사] (증권) 채권 거래(미국 채권 매매시장의 주체는 장외시장이다. 채권매매 값의 단위는 액면가의 퍼센트임. 예컨대 92라고 하면 액면가의 92%를 의미하며, 액면 1, 000달러 채권인 경우라면 매매시세는 920달러가 된다) [본문으로]
76. calculate ; 2. 추정하다, 추산하다 [본문으로]
77. rise by ; …(%) 만큼 오르다. [본문으로]
78. tie up ; 3. (흔히 수동태로) (돈을 쉽게 쓸 수 없도록) 묶어 두다 [본문으로]
79. derivatives ; (시사경제용어) 파생상품 ;; In finance, a derivative is a contract that derives its value from the performance of an underlying entity. This underlying entity can be an asset, index, or interest rate, and is often simply called the "underlying". Derivatives can be used for a number of purposes, including insuring against price movements (hedging), increasing exposure to price movements for speculation or getting access to otherwise hard-to-trade assets or markets. Some of the more common derivatives include forwards, futures, options, swaps, and variations of these such as synthetic collateralized debt obligations and credit default swaps.... Derivatives are one of the three main categories of financial instruments, the other two being stocks (i.e., equities or shares) and debt (i.e., bonds and mortgages). The oldest example of a derivative in history is thought to be a contract transaction of olives, entered into by ancient Greek philosopher Thales, and attested to by Aristotle, who made a profit in the exchange. [본문으로]
80. book ; 5. ACCOUNTS | [pl.] books (회계) 장부 [본문으로]
81. lending operation ; 대출, 융자 업무 [본문으로]
82. exposure ; 1. TO STH HARMFUL | [U] ~ (to sth) (유해한 환경 등에의) 노출 [본문으로]
83. credit rating ; [명사] 신용 등급[평가] [본문으로]
84. operating ; 2. 경영[운영]상의 [본문으로]
85. segment ; 1. 부분 [본문으로]
86. impute ; 1. <죄·불명예 등을> …에게 돌리다, 씌우다, 전가하다, …의 탓으로 하다(ascribe) ((to)) 2. <성질·속성 등을> (…에게) 있다고 생각하다, 귀속시키다 ((to)) 3. (법) <사람에게> (타인의 행위에 대해 감독 책임자로서) 대리 책임을 지우다 4. (경제) <관념적 가치를> 귀속시키다 [본문으로]
87. trading unit ; (경제) 거래단위(去來單位) [본문으로]
88. wield ; 2. (무기・도구를) 휘두르다[들다] [본문으로]
89. core strategy ; 핵심 전략 [본문으로]
90. wait for ... to ; ...가 ~하기를 기다리다 [본문으로]
91. recover ; 2. FROM STH UNPLEASANT | [자동사][V] ~ (from sth) (곤경 등을 벗어나 정상 상태로) 회복되다 3. MONEY | [타동사][VN] ~ sth (from sb/sth) (손실 등을) 되찾다[만회하다] [본문으로]
92. volatility ; [U] 휘발성, 휘발도; 변덕 [본문으로]
93. pick up ; 1. 회복되다[개선되다]; 더 강해지다 ;; 참고 ; pickup [본문으로]
94. boom ; 3. OF BUSINESS/ECONOMY | [자동사][V] 호황을 맞다, 번창[성공]하다 [본문으로]
95. lift ; 10. INCREASE | (양・수준을) 올리다, 인상하다; 올라가다, 인상되다 [본문으로]
96. punchy ; [형용사] punch・ier , punchi・est 연설・노래 등이 (간명하면서도) 아주 효과적인 [본문으로]
97. highs and lows ; [명사] 고저(高低), 기복. [본문으로]
98. trio ; (pl. -os) 1. [C+sing./pl. v.] 3인조, 3개가 한 조로 된 것 ;; 참고 ; duo [본문으로]
99. hang in there ; [동사] (구어) 버티다, 견뎌내다. ;; 동의어 ; hang on, hang tough, endure. [본문으로]
100. feed into ; ~에 반영되다 [본문으로]
101. be tolerant of ; …에 대해 관대한, …을 견뎌 내다, …을 관용하다, 내성이 있다 [본문으로]
102. lieutenant ; 4. (직위를 나타내어) 부(副)– ;; 미국식 [lu:|tenənt] 영국식 [lef|tenənt] [본문으로]
103. make one's name (as) ; 유명하게 되다, …로서 명성을 얻다, 이름을 날리다 [본문으로]
104. quick fix ; [구어] 일시 모면하는[미봉적인] 해결(책), 응급조치; 즉효약 [본문으로]
105. mature ; 4. NO LONGER YOUNG | 원숙한 (더 이상 젊지 않음을 정중하게 또는 유머러스하게 표현한 것) [본문으로]
106. romantic ; [명사] 1. 로맨틱한[낭만적인/몽상적인] 사람 [본문으로]
107. commercial bank ; 시중[보통] 은행, 상업 은행 [본문으로]
108. flirt with ; 1. ~을 장난[재미]삼아 생각해보다 2. ~도 무서워하지 않고 덤비다 [본문으로]
109. perfect ; [타동사][VN] 완벽하게 하다 ;; 동사 [美pər|fekt] [본문으로]
110. lender ; [명사] (금융) 빌려주는 사람, 대출 기관 ;; 참고 ; borrower, moneylender [본문으로]
111. ululate ; [자동사][V] (문예체) (길게 소리 내어) 울다, 울부짖다 ;; 미국식 [|ʌljʊleɪt] 영국식 [|ju:ljʊleɪt ; |ʌljʊleɪt] [본문으로]
112. legacy ; 2. (과거의) 유산 [본문으로]
113. board ; 4. GROUP OF PEOPLE | [C+sing./pl. v.] 이사회, 위원회 [본문으로]
114. stick with ; to continue to do something in spite of difficulties [본문으로]
115. corrode ; [동사] 부식시키다; 좀먹다 ;; 미국식 [kə|roʊd] 영국식 [kə|rəʊd] [본문으로]
116. morale ; [U] 사기, 의욕 미국식 [mə|rӕl] 영국식 [mə|rɑ:l] [본문으로]
117. external ; 3. 외국의, 대외적인 [본문으로]
118. upsurge ; [명사] (주로 단수로) ~ (in/of sth) (격식) 급증 [본문으로]
119. shrink ; 2. (규모・양이[을]) 줄어들다[줄어들게 하다] ;; 참고 ; shrunken [본문으로]
120. reign ; 1. (왕의) 통치 기간, 치세 2. (어떤 사람이 어떤 기관・팀 등을) 책임 맡는[담당하는] 기간 [본문으로]
121. top dog ; [명사] (주로 단수로) (비격식) (경쟁의) 승자[우세한 쪽] ;; a person, group or country that is better or more powerful than all the others [본문으로]
122. nonentity ; [명사] pl. -ies (못마땅함) 별 볼일 없는[보잘것없는] 사람 [본문으로]
123. look back ; (과거를) 되돌아보다 ;; to cast one's mind to the past [본문으로]
124. puzzlement ; [U] (격식) 어리둥절함, 얼떨떨함 [본문으로]
125. undisputed ; 1. 반박[이론]의 여지가 없는 2. 모두가 인정하는[받아들이는] [본문으로]