The Institutional Risk Analyst

“Since the start of the Iran war, base rates are up 48 bps and spreads (the six rates I use) are up 80 bps, for a total impact of 128 bps. The impact on EBITDA to support equity is roughly $5 billion per bp. At an EBITDA multiple of 8-1, each bp reduces equity valuations by $40 billion. SIMPLY STATED, the “cost” of the war now stands at $5.12 trillion in reduced “fair value” of US investments. ARE WE HAVING FUN YET?”

When Sidney Weinberg and Gus Levy ran GS, they had not yet achieved the wealth and public acclaim that the firm has today. GS was still a tiny non-bank brokerage firm compared to the giant behemoths of Wall Street, which financed the Goldman business and still do today. GS is too small as a bank and too large as a securities firm to be a non-bank.