Slumping Goldman Sachs faces questions

NEW YORK: A slump in Goldman Sachs’s long- dominant trading business has sharpened questions about the Wall Street kingpin’s strategy as technological change

“Goldman Sachs has run out of steam,” said Richard Bove, analyst

new management, new businesses,

Goldman’s t r ava i l s are something of a surprise given its unparalleled prestige in

Long associated with the super rich and powerful, Goldman Sachs has been involved in complex and sometimes controversial transac

Its global alumni includes European Central Bank head Mario Draghi and several current White Secretary Steven Mnuchin and National Economic Council director Gary Cohn, who is attempting to shepherd a major tax reform bill

Gregori Volokhine, president of Meeschaert Capital markets, said the 148- year- old firm

Goldman reported an unprecedented 40 percent plunge in - come, commodities and currencies (FICC) in the second quarter, a performance that lagged that of rivals JPMorgan Chase and Mor

center at Goldman and helped launch the rise of top brass such as chief executive LLoyd Blankfein, president and co-chief operating

the role of trading desks has eroded as powerful automated trading algorithms have gobbled up more transactions and as more investors have embraced exchange traded

And competitors like Morgan Stanley slashed jobs in that busi-

- aged by tougher regulations on speculative activities, especially the Volcker rule which restricts

Around 70 percent of volumes on the New York Stock Exchange now are on automated trading

Analysts are eager to hear how Goldman plans to right the ship, - dress investors at a conference next

- edge that many high-risk transactions that once boosted results are no longer bankable and it sees new

that Goldman is going to be “doing more trading with Procter & Gamble and less trading with XYZ hedge fund and that this quarter

Surprise slump

So far, Goldman Sachs has argued that trading remains a viable business, which will pick up in times - pany also said business should be boosted by deregulatory moves -

CEO Blankfein has spoken of opportunities to serve as a “full- service” bank, but acknowledged in an interview last We know what we have to do it

Still, he said, “we have a good reputation for resiliency

Bove said Goldman should shift to more conventional lending, an area it has begun to embrace with the creation of GS Bank, which has savings accounts, and Marcus, an

And Goldman should consider

companies make money is loans,”