When it comes to dividends, Goldman Sachs seems to be thinking a bit differently than other Wall Street firms. It is stocking up cash and near-cash securities--to the tune of $170 billion in excess capital--to be able to move quickly when it sees toxic assets at the right price, reports the Financial Times. It bought $8 billion in mortgage-backed securities from State Street in December and remains on the hunt for similar deals.

This stands in contrast to other banks, which are aiming to return excess capital to shareholders in the form of dividends, assuming that they pass various stress tests and win Fed approval.

While Goldman Sachs aims to invest, it may be forced to follow suit. The CFO recently said if the bank could not invest profitably in certain assets then it would consider returning more to shareholders.

The surge in assets values is an issue for a lot of investment funds, not just Goldman. Many distressed asset funds have been set up, and there's a lot of capital to be deployed. But the run-up in prices is giving people pause. At some point, we may see certain funds give in and return funds to investors. In some ways, this is not a terrible problem for the industry, as it shows these markets are recovering.

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