Goldman Sachs wants to lend you money. Is this banking 2.0 or a complete mistake?

3~5 years ago Goldman Sachs started lending money through their "Marcus" online-lending platform that provides instant lending. So basically they want lend you money to renovate home and take care of your existing loans and etc. Name Marcus comes from founder of Goldman Sachs "Marcus Goldman"

Reason I bring this up is because this is a deviation from it's core business of Investment Banking. Some people say this is Financial Service 2.0. Some say this is a complete mistake. Has any one used Goldman's "Marcus" platform? What do you think? Should Goldman Sachs even be lending to consumers?

For me, I don't think it's looking too good. I think it hurts their prestige. What do you guys think?

Comments (4)

May 4, 2017

OP - Please tell me your thoughts on this question:

Do you believe the U.S. government would ever allow Goldman Sachs to fail?

May 4, 2017

Do I believe whether US Government will allow GS to fail?
I don't know, well it's complicated. It is probably difficult. However, in special circumstances such as in a state of war, it can be done.
What point are you trying to make?

Best Response
May 4, 2017

I think it will provide some nice debt to hold for repo during periods when there is not liquidity in the market. But since they are doing this now probably some good yields expected to be had. I would say that this is a positive for the market inferring that Goldman expects interest rates to rise and wages along with it to some extent or else they would be left holding another worthless pile on poop.

Also I have a friend who works for a company which does consumer debt/personal debt. Investing in the fund/company pays a nice 6-10% yield for prime consumer lending. Here is their philosophy cut and pasted:

'If you look at the trends, you will notice that the banking system is shrinking and becoming increasingly regulated. On the Asset Management side, between the increase in perceived liquidity and what the central banks have done to interest rates, there is no "income" in fixed income anymore - it's a commodity. So, with large, heavily regulated banks not lending and "fixed-income" lacking income, there is a structural need for both lending and owning loans to create income. Fintech firms have taken innovative approaches to matching the borrower and investor and the availability of credit data.

The marketplace lending opportunity addresses these issues and should be a long-term investment opportunity, which is a lot to be excited about.'

May 5, 2017
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