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Goldman Apologizes For Abysmal FX Recommendations

Tyler Durden's picture





 

The FX recommendations of Goldman's Thomas Stolper have, over the course of this year, been the butt of every joke on Zero Hedge, and we actively recommended readers do precisely the opposite of whatever Goldman advised clients. End result: Zero Hedge readers: 100%; Goldman clients: -100%. We were delighted to read that in his yesterday letter, Stolper admitted that his clients would have done better off siding with our cynical view of events than paying Goldman tens of millions in soft dollars (oops, did we just say soft dollars). To wit: "The performance of our FX top trades this year has been unsatisfactory." Nuf said.

From Goldman's Thomas Stolper:

The performance of our FX top trades this year has been unsatisfactory. We recommended a long PLN/JPY position as a variation of the EM versus G3 theme but implicitly assumed a lot of long EUR/$ risk, which was the primary source of under-performance. US weakness and a substantial rally in US bond markets translated into additional JPY strength as a result of rate correlations. Including carry this trade idea recorded a negative performance of 15.6%. We also recommended long GBP/NZD based on the idea that strong UK activity will ultimately translate into stronger Sterling, compared to weak activity in New Zealand, which also remains exposed to large external imbalances. Unfortunately, persistently dovish UK monetary policy fully offset the impact from growth, while the NZD got a commodity related lift from the AUD. We posted a potential loss of 12.5% on this trade, including carry. Finally, our view that growth differentiation would remain an important generic theme for FX markets turned out to be true, though performance was slightly disappointing as many of the fast growing countries in Asia prevented appreciation through unprecedented intervention, limiting the return to +1.8% on our GS FX Growth Current.

Of course, when a trader admits weakness, it's pretty much game over. We hope Thomas has very thick skin in 2011.

 


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Wed, 12/01/2010 - 22:40 | Link to Comment RobotTrader
RobotTrader's picture

Hilarious.

Goldman Sachs is no different than the sports wagering "experts" who have weekend shows on FOX and ESPN Sports Radio here in Los Angeles.

Just take the "Stone Cold Lock" and "Guaranteed Lead Pipe Cinch" NFL picks they throw out for free every weekend and bet the exact opposite.

Here, want some free money?

What ever team these guys pick, bet the opposite side:

http://www.blowoutwinner.com/

 

Wed, 12/01/2010 - 22:47 | Link to Comment Arius
Arius's picture

except GS has the game already fixed as proven over and over on this site...

Wed, 12/01/2010 - 22:42 | Link to Comment eigenvalue
eigenvalue's picture

Goldman Sachs recently predicted that Gold would top at1750 in 2012.

Wed, 12/01/2010 - 22:42 | Link to Comment Cursive
Cursive's picture

No apology for ABACUS, yet?

Wed, 12/01/2010 - 23:04 | Link to Comment Missing_Link
Missing_Link's picture

'Course not.  They assume we've forgotten.

Wed, 12/01/2010 - 22:45 | Link to Comment onlooker
onlooker's picture

sic em Tyler, get um

Wed, 12/01/2010 - 22:46 | Link to Comment Threeggg
Threeggg's picture

RobotTrader I found one for you !

Is that you at the other scanner ??

You didnt say you were TSA !!

http://www.liveleak.com/view?i=31a_1291234348

Have a good night

Wed, 12/01/2010 - 22:47 | Link to Comment liberal sodomy
liberal sodomy's picture
The Kol Nidre is the holiest Jewish prayer and is recited several times on Yom Kippur, the Day of Atonement. It means "all vows" and is a flat statement that no promise of any kind will be kept for the coming year. It is also sung by the cantor in synagogue, accompanied on the violin and goes like this:
 
"All vows, obligations, oaths or anathemas, pledges of all names, which we have vowed, sworn, devoted, or bound ourselves to, from this day of atonement, until the next day of atonement (whose arrival we hope for in happiness) we repent, aforehand, of them all, they shall all be deemed absolved, forgiven, annulled, void and made of no effect; they shall not be binding, nor have any power; the vows shall not be reckoned as vows, the obligations shall not be obligatory, nor the oaths considered as oaths."
Wed, 12/01/2010 - 22:50 | Link to Comment TheGreatPonzi
TheGreatPonzi's picture

Quite adapted to the situation, indeed ;-)

Wed, 12/01/2010 - 23:19 | Link to Comment DisparityFlux
DisparityFlux's picture

Spiritually convenient.

Likewise, devout Catholics have the Sacrament of Reconciliation -- though not specifically for addressing a posteriori broken promises. 

Wed, 12/01/2010 - 23:54 | Link to Comment liberal sodomy
liberal sodomy's picture

I think people ought to know the sociopathic race cult of atheist poles and russians masquerading as a religion are taught that it is smart and expected to lie, and that they get satan's blessing one year in advance.

Those whacky "jews".  They're incorrigable.

Thu, 12/02/2010 - 00:24 | Link to Comment DisparityFlux
DisparityFlux's picture

 

There seems to be many positive personal and social benefits for religion.  Just can't get everyone to agree on what to preach and to practice what is preached.

Thu, 12/02/2010 - 01:40 | Link to Comment trav7777
trav7777's picture

be clear here:  Judaism is an ethnicity that just happened to have its own god and tribe religion.

What is clear is among western whites, there is absolutely NO concept of ethnicity or clan.  We are more nationalists, which in europe, rose out of clan identifications and aristocracies that ruled them.  But who in America has any sense of Irishness beyond some happy times on St. Patrick's day?  We're taught from day one that those types of things are bad.

The UFC HW champ can have "brown pride" tattooed across his chest but any clan identification by whites is verboten.

Thu, 12/02/2010 - 02:16 | Link to Comment scratch_and_sniff
scratch_and_sniff's picture

Thats because white clans are always too fucking dangerous, its better off for everyone if they dont exist.

Thu, 12/02/2010 - 07:46 | Link to Comment liberal sodomy
liberal sodomy's picture

110 countries and counting have come to the same conclusion about the kikes.

This is a war to the death.  Which way Western Man?

Thu, 12/02/2010 - 04:08 | Link to Comment GeoffreyT
GeoffreyT's picture

What bollocks... folks like Avgidor Liberman (and Joe Same), Ariel Sharon and BibbidyBoppidy 'Combover' NathanYahoo are about as Semitic as I am Eskimo.

They are descendants of Slavic hovel dwellers who converted en masse in the 8th century. Here's the thing that gives it away: blue eyes & fair skin are ill suited to the Judean countryside (or life in Egyptian bondage).

Fuck's sake, man - you should give nop credence to anyone who wants to be associated with the sister-fucking nomad who got trolled by a space man (promised to be fountainhead of the Herrenvolk, if he would snip the end off his cock and every male cock from his clan, in perpetuity).

 

Cheers

 

 

GT

Thu, 12/02/2010 - 04:12 | Link to Comment EscapeKey
EscapeKey's picture

I don't think nationality is as significant as it used to be, even here across Europe. Sure, every 2 years, we dress up in our national colours, drink tons of beer, and celebrate every time one of our players score a goal or two. But once the match is over, we're happy to drink together, laugh together, celebrate together, and fuck eachother, regardless of whether we're Spanish, German, Scandinavian or Polish.

What made a significant impression on me was when the wall came down, and young Czechs, Poles, Hungarians, Russians, ... were more than happy to join the party, and didn't hold any deep grudges against any of us (regardless of what our propaganda arms told us).

Wed, 12/01/2010 - 22:54 | Link to Comment DisparityFlux
DisparityFlux's picture

I wonder if GS employee performance evaluations take into account analysis failure and ZH ridiculed analysis.  Is it considered street cred at GS to be slammed on ZH?

Wed, 12/01/2010 - 23:06 | Link to Comment Caviar Emptor
Caviar Emptor's picture

GS didn't anticipate the rate of recovery of the global bank Ponzi. They assumed offshore banks would remain impaired for a lot longer when governments announced "austerity". 

However events in the last couple of weeks in Europe have upped their assessment of how quickly global banks can resume their biggest business: building a new global pyramid scheme using securities and derivatives, traded between member banks that are in on the deal. Just like that chain letter that you get in the mail, promising riches if you send money and convince 8 friends to get 8 friends to send money. Banks are now in the business of backing other banks, not lending into the productive economy. The crisis and its handling made this a permanent condition.

Wed, 12/01/2010 - 23:34 | Link to Comment TheGreatPonzi
TheGreatPonzi's picture

You have resumed in simple words the most horrendous economic developments of modern times. Couldn't say better.

Wed, 12/01/2010 - 23:28 | Link to Comment cocoablini
cocoablini's picture

Hi asshole-- keep up the great work- i have made money on all my FX trades going 180 on blowjobs like yours. don't stop- whatever you are doing is ...Gold!

Wed, 12/01/2010 - 23:34 | Link to Comment Hephasteus
Hephasteus's picture

Oh my. Are people getting their expectations of not being bold faced lied to managed again by goldman sachs.

Wed, 12/01/2010 - 23:48 | Link to Comment lsbumblebee
lsbumblebee's picture

Wow. That's a two hanky-panky apology. Okay GS. Here's another big wad-o cash. Please be careful with it.

Wed, 12/01/2010 - 23:56 | Link to Comment Coldfire
Coldfire's picture

The Big Secret to future prices is that there is no secret. Goldman doesn't have a crystal ball. And neither does anyone else. So Goldman's guesses were wrong. They were only guesses after all. They apologised but the people who should be doing the apologising - to their portfolios and the god of common sense - are those who risked precious capital on Goldman's guesses. Like someone would tell you if they knew.

Thu, 12/02/2010 - 00:01 | Link to Comment omi
omi's picture

Uhm, bonus time?

Thu, 12/02/2010 - 01:26 | Link to Comment gwar5
gwar5's picture

GS still made money off their head fakes while they laugh.

Thu, 12/02/2010 - 01:41 | Link to Comment trav7777
trav7777's picture

What is this GS "we" lost 12.5%?  THEY didn't lose shit, their clients stupid enough to take their trades did while Goldman Squids surely bet against them

Thu, 12/02/2010 - 04:15 | Link to Comment EscapeKey
EscapeKey's picture

No, no, you misunderstand - for every trade you take a side, to which there is a willing counterparty, and Goldman Sachs seeks to provide the best service in the business by acting as counterparties in the name of speed of transaction, thereby servicing their customers as efficiently as possible.

It has nothing to do with creaming their customers. GS, in fact, would be happy to take a loss in order to service their sucke^H^H^H^H^H business partners.

Thu, 12/02/2010 - 02:20 | Link to Comment scratch_and_sniff
scratch_and_sniff's picture

I must say, I am sceptical that GS would purposely give out wrong ideas as a matter of policy, what i am not so sceptical about is that they would purposely employ some eternally stupid enough man to make all the silly calls in the world, and then take the other side. Its worked, highfive GS.

Thu, 12/02/2010 - 05:10 | Link to Comment Azannoth
Azannoth's picture

How does Goldman explain to it's clients that IT is capable of 100% Quarter but can't get a 10% correctness for it's 'clients' ?

 

Are Goldman clients the biggest deadbeats ever or what ?

Thu, 12/02/2010 - 08:36 | Link to Comment bania
bania's picture

I'm a week early with this but it's relevant to the article.  In June 2010 ZH wrote an article about Goldman's 'do the opposite of what I say' approach so I made a reminder to see how their recommendation would work out in 6mo.  Here is the reminder:

"ALERT REMINDER FOR DEC 9, 2010:Full blown capitulation from the Goldman FX (strategic not tactical) team: the firm goes from a $1.35 target on EURUSD to $1.15. Score one more golden star for Goldman-Client relations. On the other hand, Thomas Stolper is officially advising clients to sell their euros to Goldman. There is no clearer signal to buy the beaten down currency.

On June 9 2010 it is 1.1990

Question, was ZH right to go long?

Answer: Euro currently 1.3166.  9.8% gain in 6mo, almost 20% annualized.

ZH -1 : Goldman(and sucker clients) - 0

Thu, 12/02/2010 - 10:06 | Link to Comment PolishHammer
PolishHammer's picture

Anyone recommending long PLN/*** is a moron and whoever follows such advice deserves to lose thier money.

 

LONG PLN!  WTF  Go to Poland and see what the government there is up to lol.  Whole PLN is worth whatever the currency migrants send back home.  With unemployment in Western Europe and USA surging there's nothing to inflate PLN with.

 

PLN is losing TO EUR while EUR is going down parabolic...no small feat

Thu, 12/02/2010 - 17:18 | Link to Comment ZeroPower
ZeroPower's picture

Not true. 

$ coming back home from expats aside, FDI is high and the country itself is in a decent position, not to mention the WIG being a primary Central European exchange (only behind that 4 joint-country exchange).

Official adoption of the EUR has apparently been moved back. Only downside to the PLN is its unfortunate tie to that very currency. However a nice pair trade would exist shorting EURUSD and long PLNUSD - hoping for PLN outperformance relative to the EU, which is indeed feasible as it was the only nation in the region to post a positive GDP year in 09, not to mention one of the highest forecasted growths in 2010.

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