Chillin' out till it needs to be funded
You are sitting on your deck chair, lolling around, absorbing the tick by tick dullness of the trading room after Egypt has settled, a decade long terrorist saga is forgotten, government shutdowns and the snow are done with and suddenly as soon as all the Europeans finish reporting you wake up and there is so much ready to break the trend. Everyone knows or imagines the volatility of a trader’s life, no one understands where the next wooden dowel pin will fall out of the mechanism. Yes that is the turning point we just witnessed, where strong markets like India termed over priced but lasted a good 5-6 months without really falling through and where Goldman Sachs was singled out unfairly but had no one vouching for it in the three – four months the discussion has gone on. thought the US market equities might not go down from here the room on the upside will be reached in aa torturous circuitous way across the next 5-6 quarters and EMs are still good
It is time for me to share my position also, as the last traders have decided on taking a ride with the short treasuries and yet many know to hold back instead.. Paulson himself has won this Olympic marathon since 2008 on penny pinching buying Lehman at $0.13 cents to $0.17 cents a share and selling it for a likely 50 cents even. Goldman Sachs as always has delivered good trading days , with one loss day in the Quarter where 32 out of 62 trading days were gains of $100 mln plus. But unless you have no need for the cash you cannot stay with the big 4 Financials this decade as trimming revenues will pop up at least 3 more quarters in the next 7 and BofA is as good as lost to the seas.
The CFTC complaint itself is going to be material but it took Dick bove to sound that turning point for GS despite its good deeds. The point is that this is a glaring unfair practice which everyone does comes after March accounting ( Repo 105s) and Inter Bank trading for Capital (cut by Basel 3 and raising demands of $100s of billions in fresh capital form 4-5 banks across the pond)
Also with Dodd Frank still in scrutiny, CFPRA still to deliver and SIFI already a bone of contention as no one wants to be paying extra charges and having the government sitting on its board all the time, it may get tough for the debates to clearly enunciate anyone in the sector to be on the winning side among the big plays. J P Morgan and HSBC however have cut down their Litigation bills or likely losses from the same and have moved on. GS thus is in a bind from which it has probably chosen to come out slowly and despite it being difficult even attempt being on the government’s side without its trading wings etc.
A big let down for traders and up in the nook businesses like me but they the KRW banking sector could be big instead. I am just holding Silver and even Treasuries as the yield and the price is good after the positive tick on inflation. But Lloyd Blankfein probably knows that this is seriously the last chance ffor Goldman Sachs to do better than whine and assume everything’s already done and a PR department would help
Glencore’s $8 billion and KKR’s muted billions look more critical to me right now than following my all time fave. And no Bob Diamond songs please..even the Scots are splitting now.