Congress, Fed helped save Goldman Sachs from Glencore fate
Review of Wall Street banks' physical commodities units triggered sales of assets before broad commodity rout
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IN October 2011, things were looking bleak at Goldman Sachs Group Inc's commodities business. Revenue was down, competition was up, employee attrition was at an all-time high and new regulations were on the horizon.
Beyond the usual rivalries with Morgan Stanley and JPMorgan Chase & Co, Goldman Sachs executives saw an upstart doing deals they couldn't do and throwing lots of cash at traders: Glencore plc. The commodities company wasn't tied down by rules that applied to banks and had become even more of a presence since a US$10 billion initial public offering earlier that year. It boasted strong growth and higher stock multiples than Goldman Sachs was receiving for its commodities unit.
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