A Preliminary Look at Our 213 Outlook November 28, 212 Strategy Group This material represents the views of the Strategy Group ( ISG ) in the of Goldman Sachs. It is not a product of Goldman Sachs Asset ( GSAM ) or Goldman Sachs Global Research. The views and opinions expressed herein may differ from those expressed by other groups of Goldman Sachs. 1
Today s Call I. Outlook for the Global Economy - US - Eurozone - Emerging Markets II. Outlook for Global Markets - US - Eurozone - Emerging Market Equity - Emerging Market Local Debt Please note that we will provide our final 213 outlook for all major regions and asset classes in early January. 2
3 Outlook for the Global Economy
Index (Business Cycle Trough = 1) US: Moderate Recovery to Continue 1. Real GDP in Selected Recoveries 1 Through Q3 212 2. Housing Starts & Homebuilders Sentiment Through October 212 (Starts); November 212 (NAHB) 1958 1974 1981 Current Cycle 9 NAHB Sentiment Index (LHS) Housing Starts (RHS) 3 118 Business Cycle Trough 8 7 25 113 6 2 18 ISG Range 5 4 15 3 1 13 2 1 5 98-6 -5-4 -3-2 -1 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 17 18 Quarters to/from Business Cycle Trough 85 88 91 94 97 3 6 9 12 Years A moderate recovery is likely to continue in 213 (GDP growth of 1.5-2.5%) Fiscal policy will be a drag on growth Continued improvement in housing will support consumption and residential investment. (Exhibit 2) A potential source of upside surprise could be business investment growth if corporate sentiment improves more decisively (1) Quarter marks the trough of selected recessions since 195 (Q2 1958, Q1 1975, Q3 198, current cycle: Q2 29), measured as the low point in GDP. Sources: Strategy Group, Datastream. 4
US: 213 Outlook 213 ISG Outlook Good Case (15%) Central Case (6%) Bad Case (25%) Real GDP Growth > 2.5% 1.5-2.5% < 1.5%..25%. -.25%..25% Monetary Policy - End 213 QE3 ends late 213 Fed to loosen policy further (options include stepping up asset purchases and communicating a later rate hike) More aggressive loosening 1Y Bond Yield - End 213 > 2.25% 1.75-2.25% < 1.75% Inflation (Core CPI) - avg 213 > 2.25% 1.5-2.25% < 1.5% Inflation (Headline CPI) - avg 213 > 2.5% 1.5-2.5% < 1.5% GDP growth to remain around 2% in 213 (1.5-2.5%). Recession probability remains at 25%. Inflation should remain moderate, close to historical norm. The Fed is likely to step up QE3, as growth remains moderate. Treasury yields should remain low, though increase slowly. Sources: Strategy Group. 5
% of GDP Index, Q1 28 = 1 Euroland: Incremental Progress on Sovereign Crisis; Continued Shallow Recession 1. Adjustment from Peak Budget Deficit 1 Through 212 2. Fixed in Core and Peripheral Eurozone Countries Through Q2 212-2 -.7 15 Eurozone Core Periphery -4-6 -4.3-2.6-5.4-4.5-4.5-4.5-5.6 1 95-8 -1-12 -1.2-7.6-7. -7. -11.2-8.3 9 85 91 83-14 Peak deficit 212 (IMF forecast) 8-16 -15.6 75-18 -2 Ireland: -31.3 7 7 65 Mar-8 Sep-8 Mar-9 Sep-9 Mar-1 Sep-1 Mar-11 Sep-11 Mar-12 Euroland has made slow, incremental, yet significant progress in addressing its sovereign crisis. For example, all European countries having cut budget deficits significantly (Exhibit1). We expect Euroland to continue to make progress in addressing its crisis. Yet, we expect it will continue to do so only slowly and incrementally. The Euroland recession will likely continue, ending in late 213. Yet, it should remain shallow. The low cyclical starting point (investment is near its post-lehman trough Exhibit 2) and Germany s good health make a deep contraction unlikely. (1) The budget deficit peaked in 21 for Germany, and in 29 for the other countries included in the chart. Source: Strategy Group, Datastream, IMF. 6
Euroland: 213 Outlook 213 ISG Outlook Good Case (15%) Central Case (6%) Bad Case (25%) Real GDP Growth >.25% (.75) -.25% < (.75)% Monetary Policy - End 213 >.75%.25 -.75% <.25% German 1Y Bond Yield - End 213 > 2.25% 1.75-2.25% < 1.75% Inflation (Core CPI) - 213 Avg > 2.25% 1.5-2.25% < 1.5% Inflation (Headline CPI) - 213 Avg > 2.5% 1.5-2.5% < 1.5% GDP is likely to stagnate or contract mildly in 213. Inflation should remain moderate. The ECB will likely act to ease private sector funding costs in the periphery. German bund yields should remain low, though increase moderately as the sovereign crisis eases incrementally. Source: Strategy Group 7
Real GDP Growth (YoY%) CPI (%YoY) Emerging Markets A Tepid Recovery 1. Real GDP: EM versus DM PPP weighted, in percent, 1995-213E 1 2. EM: Inflation (% YoY) 12% 1% 8% 6% US and Eurozone Emerging Markets BRICs Average of GIR and IMF Forecasts ISG Midpoint 1% F'cast 9% 8% 7% 6.6% 5.6% 6% 16% 14% 12% 1% Headline Food Non-Food Forecast 4% 5% 8% 2% % 4% 1.1% 3% 2% 6% 4% -2% 1% 2% -4% % 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 13 % 2 3 4 5 6 7 8 9 1 11 12 13 With developed market growth expected stabilize, the drag from net exports on emerging market growth will be reduced (Exhibit 1). Continued accommodative monetary and fiscal policies will support a modest acceleration in GDP growth in emerging markets next year from 212. Inflation pressures in EM have eased as a result of weaker growth and lower food price inflation (Exhibit 2). The expected recovery in GDP growth in EM is modest and should not cause inflation pressures to rise sharply. (1) Average of GS GIR and IMF forecasts. Source: Strategy Group, CEIC, Datastream, IMF 8
% YoY %YoY BRICs On a Slow Path to Normalization 1.BRICs: GDP Projections 212-213 (% YoY) 2. ISG BRICs Inflation Forecasts 212-213 (% YoY) 12 21 211 212 213 Avg last 4 quarters Avg of forecasts* 12 21 211 212 213 Avg last 12m Avg of forecasts* 1 1 8 8. 8.5 8 8. 7.8 6 4 2 1.4 9.2 7.5 7.5 7.5 2.7 2. 3.8 2.8 1.6 7.5 6. 5. 6.5 5.5 4.3 4.3 4.5 4.3 3.5 3.3 6 4 2 3.3 5.4 3.5 3.5 2.5 2.5 5. 6.6 5.5 4.5 6.3 5.3 9.6 7. 6.8 8.7 8.5 6.9 5.5 4.5 6.8 5.8 1. China Brazil India Russia China Brazil India Russia After slowing in 212, GDP growth in the BRICs is projected to improve modestly in 213, underpinned by continued policy stimulus. Our projections are in line with or slightly below-consensus forecasts (Exhibit 1). Inflation in the BRICs should remain under control in 213, as we expect demand pressures to be modest and central banks to take action if needed (Exhibit 2). * Average of different forecasts (IMF, IIF, consensus and a series of brokers). Source: Strategy Group, IMF, Datastream, CEIC 9
China Bottoming Out 1.China: GDP Forecasts Through 213 (% YoY) 2.China: CPI Inflation (% YoY) 16% 14% 12% Projection 8 7 6 5 Food Non-food Headline CPI 1% 4 8% 6% 7.4 ISG range 3 2 1 4% 2% GDP - Actual GDP - Projection (BB consensus) % Mar-7 Jan-8 Nov-8 Sep-9 Jul-1 May-11 Mar-12 Jan-13 Nov-13 GDP growth has slowed notably, but is now stabilizing and expected to improve modestly in 213 (Exhibit 1). The 213 growth outlook is based on the following assumptions: Reduced headwind from the external environment; Removal of uncertainty and policy stasis related to the leadership change; Continued policy support for domestic demand. -3 Jan/9 Jul/9 Jan/1 Jul/1 Jan/11 Jul/11 Jan/12 Jul/12 With inflation largely in check and GDP slowly recovering, the new leadership will likely keep monetary policy on hold in 213 (Exhibit 2). Policy support will mostly come in the form of fiscal stimulus and bank lending, absent negative surprises. -1-2 Source: Strategy Group, GS Global Research, CEIC, Datastream, IMF, Bloomberg 1
11 Outlook for Global Equity Market Price Target Ranges
Returns Implied by Valuations US Equities: 213 Outlook We expect the market to follow the path of earnings higher in 213 1. Valuation 1 Implied Upside vs. Downside of US Equities 2. S&P 5: Price vs. Operating Earnings Through November 212 4% 3% Upside to 75th Percentile 34.7% Downside to 25th Percentile Price Level 1,6 1,5 1,4 1 9 2% 19.2% 1,3 8 1% 1,2 1,1 7 % 1, 6-1% -2% -3% -13.% End of 211 Today -22.6% 9 US Recessions 8 S&P 5 Price (LHS) 7 Operating EPS (TTM - RHS) 6 97 98 99 1 2 3 4 5 6 7 8 9 1 11 12 5 4 3 Valuations still have scope for upside, but the riskreward is no longer asymmetric. Recessions, not the independent force of mean reversion, drive downturns in earnings and equities. We expect continued global expansion and increased buybacks to support higher US earnings in 213, with the market ultimately following suit. (1) Price to peak earnings and price to trend earnings based on data since 1957. Price to forward earnings based on data since 1985. Source: Strategy Group, Bloomberg, Datastream, Robert Shiller GS Global Research. 12
US Equities: 213 Outlook Moderate EPS growth and some multiple expansion underpin our central case 213 Year-End Good Case (25%) Central Case (55%) Bad Case (2%) End 213 S&P 5 Earnings Op. Earnings $112 Rep. Earnings $16 Trend Rep. Earnings $83 Op. Earnings $12-17 Rep. Earnings $93-98 Trend Rep. Earnings $83 Op. Earnings $8 Rep. Earnings $68 Trend Rep. Earnings $83 S&P 5 Price to Trend Reported Earnings Multiple End 213 S&P 5 Fundamental Valuation Range End 213 S&P 5 Price Target (based on a combination of trend and forward earnings estimate) 18.5-2.x 15.5-18.5x 11-14x 1542-1667 1292-1542 917-1167 165 145-1525 115 Flat margins, mid-single digit earnings growth and some multiple expansion are the key drivers of our equity outlook. With reported earnings already above trend, further equity upside will increasingly rely on multiple expansion. While multiples rose this year as central banks truncated tail risks, additional rerating will require some uptick in growth and further clarity on key developments in US, China and Europe. A fiscal grand bargain is a notable source of upside, while a recessionary fiscal drag and/or significant shift in dividend / cap gains rates (above 25%) are key risks. The primary difference between the ISG and GIR forecasts is the assumed valuation multiple, not EPS growth. Source: Strategy Group 13
Outlook for Euro Stoxx 5: 213 Year-End Potential for earnings growth, multiple expansion and attractive dividend yield 1. Euro Stoxx 5: Decomposition of Returns 2. Euro Stoxx 5 Price Level & ISG s 213 Base Case Range 212 (YTD) 213 (ISG Base Case) Sales Growth 7% -1% 48 43 2-Day Moving Avg 5-Day Moving Avg 48 43 Profit Margin 7% 7% 2-Day Moving Avg Earnings Growth -3% -1% 38 Euro Stoxx 5 Price Index 38 Multiple Change 13% 6% Price Return 1% 6-16% Dividend Yield 5% 4% Total Return 14% 1-2% 33 28 213 Target Range: 27-29 33 28 Volatility Since 1988 2.4% 23 23 18 7 8 9 1 11 12 13 18 Following a slight earnings contraction in 212, we expect Euro Stoxx 5 earnings to grow in 213 against a backdrop of stable US growth and a slight growth acceleration in Europe and Asia. This earnings growth, combined with moderate multiple expansion from depressed levels, suggests that the Euro Stoxx 5 will end 213 in the 27-29 range, implying an 11% price return and 15% total return. This return potential seems reasonable for a year when earnings growth is expected to resume, sovereign crisis fears may further subside, and the starting backdrop is one of very attractive valuations. Source: Strategy Group, Bloomberg, Datastream 14
213 Earnings Growth Forecast Outlook for Emerging Markets: 213 Year-End 213 Earnings Growth Estimates 1 14% ISG Consensus GIR 12.5% 12% 11% 1% 8-9% 8% 7% 7% 6% 5% 4% 2% % EM Equity US Equity Based on next year s expectations for global growth of ~3-3.5% which is only a slight acceleration from 212 levels, EM earnings growth is likely to be in the mid-to-high single digit territory as margins are unlikely to expand meaningfully. The median gap between US and EM earnings growth also suggests a similar outlook. However, should growth surprise to the upside, margins could recover more rapidly and earnings growth could be closer to or even higher than consensus expectations. We expect 213 earnings growth of 5-1% with a midpoint of ~8%. (1) GIR estimate for EM is for MSCI Asia ex-japan. Source: Strategy Group, Datastream 15
EM Equity Price to Cash Flow Premium/Discount to US Equities Outlook for Emerging Markets: 213 Year-End 1. EM Price to Cash Flow - Through November 212 2. EM Price to Cash Flow Prem/Disc vs. US Through November 212 14 EM P/CF Historical Average 1 Year Average 1% EM vs. US P/CF 5Y Average 1Y Average 12 % 1 8 8.6 8.5 7.8-1% -2% -3% -13.3% -16.3% -21.4% 6-4% 4-5% 2 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11-6% -7% 95 96 97 98 99 1 2 3 4 5 6 7 8 9 1 11 EM equities are somewhat undervalued relative to their own history but fair value relative to US equities. Modest multiple expansion is likely as monetary and fiscal policy is likely to be more accommodative than in the last few years. However, significant multiple expansion is unlikely unless global growth accelerates in a meaningful way and investors risk appetite increases. In our base case, earnings growth of ~8%, combined with moderate multiple expansion suggests that EM equities could have a1-15% price return and 13-18% total return in 213 (EM volatility is ~17%). Source: Strategy Group, Datastream 16
Average into EMLD Strategic Allocations (213) ISG US Taxable Investor Model Portfolios, 213 Targets Low Volatility Conservative Moderate Aggressive Grade Fixed Income 7.% 5.% 3.% 14.% US Grade Municipal Bonds 2. 5. 3. 14. US Grade Short Duration Municipal Bonds 5. - - - Other Fixed Income 3.5% 4.5% 6.5% 5.5% US High Yield Municipal Bonds 2. 2.5 3.5 1.5 Emerging Market Local Debt (EMLD) 1.5 2. 3. 4. Public Equity 14.5% 26.5% 36.5% 53.5% US Large Cap Growth 3. 6. 8.5 12.5 US Large Cap Value 3.5 7. 9.5 14. US Small Cap Growth.5.5 1. 1.5 US Small Cap Value 1. 1.5 2. 3. Non-US Developed Equity 4. 7. 9.5 13.5 Emerging Market Equity 1.5 3. 4. 6.5 Infrastructure Master Limited Partnerships 1. 1.5 2. 2.5 Hedge Funds 4.5% 5.% 7.% 5.% Event Driven - - 1. - Equity Long/Short 1.5 1.5 2. 1.5 Macro/Tactical Trading 3. 3.5 4. 3.5 Private Equity/Debt 4.% 1.% 14.% 18.% Buyout and Secondaries 2. 5.5 7. 9. Mezzanine - 1. 1. 1. Distressed - - 1. 1. Venture - - - 1. Energy Private Equity 1. 2. 3. 3.5 Emerging Market Private Equity 1. 1.5 2. 2.5 Real Estate 3.5% 4.% 6.% 4.% Global Public REITs 1.5 2. 3. 4. Private Real Estate (Core) 2. 2. 3. - TOTAL 1.% 1.% 1.% 1.% Source: Strategy Group 17
26 Week Rolling We Remain Tactically Overweight EMLD for Now 1. EMLD Performance by Component Through November 27, 212 2. Beta & Correlation of FX Component of EMLD to S&P5 FX Local Bond Price Coupon Total 1. Correlation Beta 22%.2 2% 18% 16% Reduced to 1.5%.18.16.8.84 14% 12% 1% 8% Raised to 2% Reduced to % Removed.5% EUR hedge.14.12.1.6.4.43 6% 4% 2%.8.6.2 % -2% -4% Raised to.5% with EUR hedge.4.2. -6% Jan/1 May/1 Sep/1 Jan/11 May/11 Sep/11 Jan/12 May/12 Sep/12 -.2 3 4 5 6 7 8 9 1 11 12 EMLD s 13.9% return this year was mainly driven by its coupon and bond price appreciation while EM currencies, the main driver of volatility of the index, are only up 1.7% YTD, and down 4.1% since early 21. We recommend clients maintain their tactical exposure to EMLD as its coupon (5.7%) and moderate currency appreciation driven by a positive outlook in global equity markets provide an attractive expected return. Source: Strategy Group, Bloomberg, Datastream, JPMorgan 18
Important Information Strategy Group. The Strategy Group (ISG) is focused on asset allocation strategy formation and market analysis for Private Wealth. Any information that references ISG, including their model portfolios, represents the views of ISG, is not research and is not a product of Global Research or Goldman Sachs Asset, L.P (GSAM). The views and opinions expressed may differ from those expressed by other groups of Goldman Sachs. If shown, ISG Model Portfolios are provided for illustrative purposes only. Your asset allocation, tactical tilts and portfolio performance may look significantly different based on your particular circumstances and risk tolerance. Your actual asset allocation, tactical tilts and portfolio performance may look significantly different based on your particular circumstances and risk tolerance. The model performance calculation assumes that (1) each asset class was owned in accordance with the recommended weight; (2) all tactical tilts were implemented at the time the recommendation was made; and (3) the portfolio was rebalanced every time a tactical tilt change was made and at the end of every quarter (unless a tactical tilt was made within a month of quarter-end). Performance is calculated using the daily returns (actual or interpolated) of indices that ISG believes are representative of the asset classes included in the model. Results shown reflect the total return but generally do not take into account any investment management fees, commissions or other transaction expenses, which would reduce returns. The results shown reflect the reinvestment of dividends and other earnings. All returns are pre-tax and are not adjusted for inflation. Additional information about the model portfolio performance calculation, including asset class benchmarks used for modeling performance and a history of tactical tilts, is available upon request. Forecasts. Economic and market forecasts presented herein reflect our judgment as of the date of this material and are subject to change without notice. These forecasts are estimated, based on assumptions, and are subject to significant revision and may change materially as economic and market conditions change. Goldman Sachs has no obligation to provide updates or changes to these forecasts. Case studies and examples are for illustrative purposes only. Indices. Any references to indices, benchmarks or other measure of relative market performance over a specified period of time are provided for your information only. S&P Indices (S&P 5 Index). Standard & Poor s and S&P are registered trademarks of Standard & Poor s Financial Services LLC ( S&P ) and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC ( Dow Jones ) and have been licensed for use by S&P Dow Jones Indices LLC and sublicensed for certain purposes by Goldman, Sachs & Co. The S&P 5 Index is a product of S&P Dow Jones Indices LLC, and has been licensed for use by Goldman, Sachs & Co. Goldman, Sachs & Co. is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P, their respective affiliates, and neither S&P Dow Jones Indices LLC, Dow Jones, S&P, or their respective affiliates make any representation regarding the advisability of investing in such product(s). Dow Jones Indices (DJ Industrial Average). S&P is a registered trademark of Standard & Poor s Financial Services LLC ( S&P ) and Dow Jones, [DJIA ] [Dow Jones Industrial Average ] are trademarks of Dow Jones Trademark Holdings LLC ( Dow Jones ). The trademarks have been licensed to S&P Dow Jones Indices LLC and its affiliates and have been sublicensed for use for certain purposes by The Goldman Sachs Group, Inc. The Dow Jones Industrial Average is a product of S&P Dow Jones Indices LLC and/or its affiliates, and has been licensed for use by The Goldman Sachs Group, Inc. The securities are not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P, or any of their respective affiliates (collectively, S&P Dow Jones Indices ). S&P Dow Jones Indices make no representation or warranty, express or implied, to the owners of the securities or any member of the public regarding the advisability of investing in securities generally or in the securities particularly or the ability of the Dow Jones Industrial Average to track general market performance. MSCI Indices (MSCI EAFE Index). The MSCI indices are the exclusive property of MSCI Inc. ( MSCI ). MSCI and the MSCI index names are service mark(s) of MSCI or its affiliates and are licensed for use for certain purposes by the Issuer. These securities, based on such index, have not been passed on by MSCI as to their legality or suitability, and are not issued, sponsored, endorsed, sold or promoted by MSCI, and MSCI bears no liability with respect to any such notes. No purchaser, seller or holder of the notes, or any other person or entity, should use or refer to any MSCI trade name, trademark or service mark to sponsor, endorse, market or promote the notes without first contacting MSCI to determine whether MSCI s permission is required. Under no circumstances may any person or entity claim any affiliation with MSCI without the prior written permission of MSCI. The prospectus contains a more detailed description of the limited relationship MSCI has with the Issuer and any related securities. Russell Indices (Russell 2 Index). The Russell 2 Index is a trademark of Russell Group ( Russell ) and has been licensed for use by The Goldman Sachs Group, Inc.. The securities are not sponsored, endorsed, sold or promoted by Russell, and Russell makes no representation regarding the advisability of investing in the securities. 19
Important Information Indices. Any references to indices, benchmarks or other measure of relative market performance over a specified period of time are provided for your information only. Certain s / Strategies. Alternative s. Private investment funds and hedge funds are subject to less regulation than other types of pooled vehicles. Alternative investments may involve a substantial degree of risk, including the risk of total loss of an investor s capital and the use of leverage, and therefore may not be appropriate for all investors. Please keep in mind that liquidity may be limited. Investors should review the Offering Memorandum, the Subscription Agreement and any other applicable disclosures for risks and potential conflicts of interest. Commodities. Commodity investments may be less liquid and more volatile than other investments. The risk of loss in trading commodities can be substantial due, but not limited to, volatile political, market and economic conditions. An investor s returns may change radically at any time since commodities are subject, by nature, to abrupt changes in price. Commodity prices are volatile because they respond to many unpredictable factors including weather, labor strikes, inflation, foreign exchange rates, etc. In an individual account, because your position is leveraged, a small move against your position may result in a large loss. Losses may be larger than your initial deposit. Investors should carefully consider the inherent risk of such an investment in light of their experience, objectives, financial resources and other circumstances. No representation is made regarding the suitability of commodity investments. Emerging Markets Securities. Emerging markets securities may be less liquid and more volatile and are subject to a number of additional risks, including but not limited to currency fluctuations and political instability. Tactical Tilts. Tactical tilts may involve a high degree of risk. No assurance can be made that profits will be achieved or that substantial losses will not be incurred. Distributing Entities. This material has been approved for issue in the United Kingdom solely for the purposes of Section 21 of the Financial Services and Markets Act 2 by GSI, Peterborough Court, 133 Fleet Street, London EC4A 2BB; by Goldman Sachs Canada, in connection with its distribution in Canada; in the United States by Goldman, Sachs & Co.; in Hong Kong by Goldman Sachs (Asia) L.L.C.; in Korea by Goldman Sachs (Asia) L.L.C., Seoul Branch; in Japan by Goldman Sachs (Japan) Ltd; in Australia by Goldman Sachs Australia Pty Limited (ACN 92 589 77); in Singapore by Goldman Sachs (Singapore) Pte (Company Registration Number: 19862165W); and in Brazil by Goldman Sachs do Brasil Banco Múltiplo S.A. Tax Information. Goldman Sachs does not provide legal, tax or accounting advice. Any statement contained in this presentation concerning U.S. tax matters is not intended or written to be used and cannot be used for the purpose of avoiding penalties imposed on the relevant taxpayer. You should obtain your own independent tax advice based on your particular circumstances. No Distribution; No Offer or Solicitation. This material may not, without Goldman Sachs' prior written consent, be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorized agent of the recipient. This material is not an offer or solicitation with respect to the purchase or sale of a security in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation. This material is a solicitation of derivatives business generally, only for the purposes of, and to the extent it would otherwise be subject to, 1.71 and 23.65 of the U.S. Commodity Exchange Act. 212 Goldman Sachs. All rights reserved. 2