Financial Instruments Owned, at Fair Value and Financial Instruments Sold, But Not Yet Purchased, at Fair Value

12 Months Ended

Dec. 31, 2012

Financial Instruments Owned, at Fair Value and Financial Instruments Sold, But Not Yet Purchased, at Fair Value [Abstract]

Financial Instruments Owned, at Fair Value and Financial Instruments Sold, But Not Yet Purchased, at Fair Value

Note 4.

Financial Instruments Owned, at Fair Value and Financial Instruments Sold, But Not Yet Purchased, at Fair Value

Financial instruments owned, at fair value and financial instruments sold, but not yet purchased, at fair value are accounted for at fair value either under the fair value option or in accordance with other U.S. GAAP. See Note 8 for further information about the fair value option. The table below presents the firm’s financial instruments owned, at fair value, including those pledged as collateral, and financial instruments sold, but not yet purchased, at fair value. The firm held $9.07 billion and $4.86 billion as of December 2012 and December 2011, respectively, of securities accounted for as available-for-sale related to the firm’s reinsurance business. As of December 2012, such assets were classified as held for sale and were included in “Other assets.” See Note 12 for further information about assets held for sale. As of December 2011, all available-for-sale securities were included in “Financial instruments owned, at fair value.”

	As of December 2012				As of December 2011
in millions		Financial Instruments Owned	Financial Instruments Sold, But Not Yet Purchased			Financial Instruments Owned	Financial Instruments Sold, But Not Yet Purchased
Commercial paper, certificates of deposit, time deposits and other money market instruments		$    6,057	$         —			$  13,440	$         —
U.S. government and federal agency obligations		93,241	15,905			87,040	21,006
Non-U.S. government and agency obligations		62,250	32,361			49,205	34,886
Mortgage and other asset-backed loans and securities:
Loans and securities backed by commercial real estate		9,805	—			6,699	27
Loans and securities backed by residential real estate		8,216	4			7,592	3
Bank loans and bridge loans		22,407	1,779	3		19,745	2,756	3
Corporate debt securities		20,981	5,761			22,131	6,553
State and municipal obligations		2,477	1			3,089	3
Other debt obligations		2,251	—			4,362	—
Equities and convertible debentures		96,454	20,406			65,113	21,326
Commodities 1		11,696	—			5,762	—
Derivatives 2		71,176	50,427			80,028	58,453
Total		$407,011	$126,644			$364,206	$145,013

1. Includes commodities that have been transferred to third parties, which were accounted for as collateralized financings rather than sales, of $4.29 billion and $2.49 billion as of December 2012 and December 2011, respectively.

2. Net of cash collateral received or posted under credit support agreements and reported on a net-by-counterparty basis when a legal right of setoff exists under an enforceable netting agreement.

3. Primarily relates to the fair value of unfunded lending commitments for which the fair value option was elected.

Gains and Losses from Market Making and Other Principal Transactions

The table below presents, by major product type, the firm’s “Market making” and “Other principal transactions” revenues. These gains/(losses) are primarily related to the firm’s financial instruments owned, at fair value and financial instruments sold, but not yet purchased, at fair value, including both derivative and non-derivative financial instruments. These gains/(losses) exclude related interest income and interest expense. See Note 23 for further information about interest income and interest expense.

The gains/(losses) in the table are not representative of the manner in which the firm manages its business activities because many of the firm’s market-making, client facilitation, and investing and lending strategies utilize financial instruments across various product types. Accordingly, gains or losses in one product type frequently offset gains or losses in other product types. For example, most of the firm’s longer-term derivatives are sensitive to changes in interest rates and may be economically hedged with interest rate swaps. Similarly, a significant portion of the firm’s cash instruments and derivatives has exposure to foreign currencies and may be economically hedged with foreign currency contracts.

	Year Ended December
in millions		2012		2011	2010
Interest rates		$  4,366		$  1,557	$ (2,042	)
Credit		5,506		2,715	8,679
Currencies		(1,004	)	901	3,219
Equities		5,802		2,788	6,862
Commodities		575		1,588	1,567
Other		1,968	1	1,245	2,325
Total		$17,213		$10,794	$20,610

1. Includes a gain of approximately $500 million on the sale of the firm’s hedge fund administration business, which is included in “Market making” revenues.