Goldman Beats, Profits Surge As Trading Revenues Jump; Average Banker Comp Hits $338,600

Goldman once again surprised to the upside, reporting Q4 Revenues of $8.17BN, higher than the $7.76BN estimated, translating to EPS of $5.08, also above the $4.73 estimate, and nearly 4 times the $1.27 reported a year ago. Net revenues from the institutional client services division were up 25% from a year earlier to $3.6bn, led by a 78% jump in revenues from the fixed-income, currencies and commodities unit.

Frontrunning: January 18

  • Business euphoria over Trump gives way to caution, confusion (Reuters)
  • Biden Lashes Out at Trump Over Comments on NATO (WSJ)
  • Number of House Democrats Skipping Inauguration Grows (WSJ)
  • Rising U.S. shale-oil output threatens OPEC’s production pact (MW)
  • China urges U.S. to bar Taiwan delegation from Trump inauguration (Reuters)
  • IEA Sees Significant Gains in U.S. Shale Oil as Prices Rise (BBG)

Trump Warns Canada, Mexico He Will Begin NAFTA Renegotiation "Within Days Of Inauguration"

Trump's Commerce Secretary pick, Wilbur Ross, has informed Canadian officials that he plans to reopen NAFTA talks within days of his inauguration, and that rules of origin and independent dispute tribunals will be central in negotiations of North American Free Trade Agreement. Ross has indicated new administration will send a formal letter notifying Canada and Mexico of plans to renegotiate Nafta within days of Trump’s inauguration.

Target Tumbles After Cutting Guidance, Reports Poor Comps; Drags Wal-Mart Lower

Target now expects fourth quarter comparable sales in the range of (1.5) percent to (1.0) percent, compared with prior guidance of (1.0) percent to 1.0 percent. In fourth quarter 2016, Target expects both GAAP EPS from continuing operations and Adjusted EPS of $1.45 to $1.55, compared with prior guidance of $1.55 to $1.75.

Deutsche Bank To Scrap Bonuses For 2016: As Many As 90% Of Bankers, Traders Affected

Deutsche Bank employees are facing more bad news, following reported from the Post and Bloomberg that the largest German lender will tell senior employees as soon as this week that they probably won’t get a bonus for 2016 because of the lender’s performance last year. The post adds that Deutsche may hold back on giving out bonuses to as many as 90% of bankers and traders.

"Everything Is A Partial Reversal Of Yesterday" - Stocks, Dollar Rebound Following Trump Scare

European shares decline led by a plunge in Pearson shares, S&P futures were modestly in the green as Asian and EM stocks gained. The dollar rebounded against most major currencies after retreating 1.3% on Tuesday to the lowest in a month following Trump's "strong dollar" comments and halted a seven-day drop against the yen. "Everything is just a partial reversal of the price action yesterday," RBC Capital Markets currency strategist Adam Cole said.

The Dangers Of A "Universal Basic Income"

As has always been the case, it is necessary to create wealth before it is possible to redistribute it, and policies that encourage movement toward less productive types of work will fail to produce the wealth that government planners would like to spread around.

Here's Why America's Drug War Has Been An Epic Failure

If the goal is to put an end to the illicit drug trade, the federal government is embracing the very opposite of what they ought to, allowing their attempts to restrict drugs to empower black market entities taking advantage of anti-drug laws. Increasing the budget of law enforcement agencies and adding to the ever-growing burden on the U.S. taxpayer is not going to do anything to fix it.

Trump Could Go Down As The Worst President... (But It Will Not Be His Fault)

History books remember Herbert Hoover as one of the worst American presidents. Hoover inherited a stock market bubble near its peak - fueled by the Fed’s easy money policies. Trump has, too. And he knows it. Trump is the perfect scapegoat. If new shantytowns sprout up, they won’t be Hoovervilles - they’ll be “Trump Towers.” All this is why what happens after Trump’s inauguration could change everything... in sudden, unexpected ways.

US F-16 Photographed In Mock Dogfight With Russian Su-27 Above Area 51

"The Flanker is rumoured to have been flying from Groom Lake for nearly 20 years, but no-one has ever managed a definitive photograph to prove it does exist. This sequence of photos is the first proof that the Americans are flying this aircraft, which is the premier Air Defence Fighter in use with the Russian and Chinese Air Forces."

The Dallas Pension Fiasco Is Just The Beginning

The recent blow-up of the Dallas Police and Fire Pension System was entirely predictable. The combination of overpriced financial markets, inadequate contributions and overly generous pension promises mean dozens of US local and state government pension plans will end up in the same situation.

A Violent Inauguration? A Call For Peace On Inauguration Day

Should violence occur on inauguration day, a story which will quickly spread will be one of a divided America, an inauguration with a violent and extreme reaction to a “divider president”, Donald Trump. But it is not Donald Trump who has been sitting in the seat of power over the past eight years using veiled encouraging statements like this to his SJW audience;  that one falls squarely into the lap of the sitting president.

Trader Warns: The "Cure-Through-Greater-Inequality" Paradigm Just Snapped

For years, post-financial crisis policy was conducted on the self-serving belief that it works best by propping up asset (especially equity) prices, which will then cause some of the goodies to trickle down... known in the non-official journals as “cure through greater inequality." But, if global politics turn decidedly ugly, it should not be profound to believe that could act as a drag on world growth...

"Common Sense" - Addressed To The Inhabitants Of 2017 America

The election of Trump did not mark the end for the Deep State, but just the beginning of the end. Just as Paine’s Common Sense denoted the beginning of a long string of bloody trials and tribulations, Trump’s ascendency has marked the beginning of a battle – with the outcome dependent upon our response to the clashes ahead. It's unclear if Trump supporters realize how abnormal, deviant, and despicable their opponents are. Blood will be spilled. Violence will beget violence. The country is already split and the divide will only grow wider. Someone will win and someone will lose. Our choices will matter.