Prop Trading

Tyler Durden's picture

Goldman Earnings Plunge 55% In Worst Quarter Since 2011; Average Compensation Crashes





There was some hope that after a better than expected result from JPM and, to a lesser extent MS and WFC, that Goldman would surprise to the upside. That did not happen even though the company moments ago reported EPS of $2.68 beating expectations of $2.48, which nonetheless was a 55% plunge in earnings from a year ago.  But the real story was in the company's revenue which printing at $6.4 billion was not only a huge miss to expectations of $6.7 billion, but a massive slide of 40% from Q1 2015 driven by top-line weakness across the board. This was the worst revenue quarter for Goldman since Q4 2011.

 
Tyler Durden's picture

Peak Online Lending? SoFi Starts Hedge Fund Just To Buy Loans From Itself





Concerns about the health of the US economy and the true state of the labor market will likely mean that demand for marketplace-backed paper won’t exactly be what one would call “robust” going forward. Of course that’s a problem for lenders like SoFi, which pools its loans and sells them to free up space on the books for still more loans. But don’t worry, because SoFi - which originates billions in personal loans - has an idea...

 
Tyler Durden's picture

Goldman Posts Worst Q4 Revenue Since 2011; Average Comp Rises To $344,511





Looking at Goldman's topline, we found that in the fourth quarter the bank had generated only $7.3 billion in revenue, a 5.4% drop from a year ago, and underscoring just how difficult the environment is even for the bank that does god's work, this was the weakest Q4 revenue from Goldman since 2011.

 
Tyler Durden's picture

The Fixed Income Bloodbath Continues: Wall Street Harbinger Jefferies Reports Another Terrible Bond Trading Quarter





Earlier today Jefferies reported another quarter in which its Fixed Income revenue could best be described as dismal: Fixed Income posted a nominal $8.4 million in revenue: a whopping 83% collapse from the already subdued $48.6 million a year ago.  The biggest irony is that while other banks are clamoring to be allowed to "prop trade" again, Jefferies which has had the green light to do just that as it never got an FDIC bailout and remains the only sizable pure-play investment bank, just got crushed precisely due to its junk bond prop trading.

 
Tyler Durden's picture

China Unleashes Perfect Storm Of Bad News Prompting Stock Market Plunge





From witch hunts to corporate defaults to abysmal data, Friday marked a rather unceremonious end to the week for China, as a veritable perfect storm of bad news sent the SHCOMP reeling. Unfortunately for China's day trading masses the plunge protection team was, like Guotai Junan International Holdings’ CEO Yim Fung, "missing" in action.

 
rcwhalen's picture

On Credit Default Swaps





"This is legal?" Stephanie Ruhle on CDS after watching "The Big Short" (Bloomberg TV) 

 
Tyler Durden's picture

How We Got Here: The Fed Warned Itself In 1979, Then Spent Four Decades Intentionally Avoiding The Topic





At least parts of the Fed all the way back in 1979 appreciated how Greenspan and Bernanke’s “global savings glut” was a joke. Rather than follow that inquiry to a useful line of policy, monetary officials instead just let it all go into the ether of, from their view, trivial history. But the true disaster lies not just in that intentional ignorance but rather how orthodox economists and policymakers were acutely aware there was “something” amiss about money especially by the 1990’s. Because these dots to connect were so close together the only reasonable conclusion for this discrepancy is ideology alone. Economists were so bent upon creating monetary “rules” by which to control the economy that they refused recognition of something so immense because it would disqualify their very effort.

 
Tyler Durden's picture

Morgan Stanley Q3 Earnings Crash, Revenues Miss By $1.2 Billion; Volatility And Burst Chinese Stock Bubble Blamed





While the big TBTF banks managed to hide much of their ugly balance sheet exposure, and prevent it from hitting the income statement in Q3 as reported previously, while covering up prop trading losses as well as they possibly could, the banks without trillions in deposits were less able to do so: first it was Jefferies, then Goldman posted its worst quarter in years, and now here comes the bank also known as Margin Stanley, which moments ago reported Q3 EPS of $0.34, which even if adjusted for various "one-time" items, at $0.48, not only missed consensus of $0.63 wildly, but it also missed the lowest range of the estimate range ($0.53-$0.70).

 
Tyler Durden's picture

Goldman Suffers Terrible Quarter After FICC, Prop Trading Revenues Plunge; Banker Comp At Five Year Lows





Once again, Jefferies' one-month early glimpse at Wall Street trading revenues proved to be spot on. After the boutique mid-market banks reported a total collapse in fixed income trading revenues (which ended up negative following massive charge offs), everyone was looking at the biggest hedge fund among the TBTF banks - Goldman Sachs - to see just how bad the trading environment really is. The answer came moments ago, and the answer is bad. Very bad.

 
Tyler Durden's picture

World's Largest Leveraged ETF Halts Orders, Citing "Liquidity Constraints"





First The Bank of Japan destroyed the Japanese bond market, and then, back in May we warned that The Bank of Japan had 'broken' the stock market. Now, it appears the all too obvious consequences of being the sole provider of buying power in an antirely false market are coming home to roost as Nomura reports the "temporary suspension" of new orders for 3 leveraged ETFs - the largest in the world - citing "liquidity of the underlying Nikkei 225 futures market."

 
Tyler Durden's picture

Spoofer Complains About Spoofing, Is Ignored, Starts Spoofing, Gets Busted





This is the story of a veteran NYSE specialist who noticed manipulation in the NYSE market open Imbalance, loudly complained to the NYSE, was ignored, then decided to profit from said manipulation himself... and got busted.  And that's where the story begins...

 
Tyler Durden's picture

As SEC Rolls Out Liquidity Risk Plan, Here Are The Bond Funds That May Be Most Vulnerable In A Meltdown





With the SEC moving to head off the risk of a bond market meltdown triggered by a dangerous combination of illiquidity and bond fund proliferation, WSJ decided to see which fund providers are the most at risk in a crisis. The list may surprise you...

 
Tyler Durden's picture

Jamie Dimon's Stark Rate Hike Warning: Treasurys "Will Be Violently Volatile" When Rates Rise





"The one thing I do worry a little bit about, by the way, is Treasuries. So I wouldn’t be shocked to see 10-year Treasuries, when rates are going up, people change their mind, they change direction, that they will be violently volatile and go up much faster than people think."

 
Tyler Durden's picture

Fixed Income Bloodbath: Jefferies Reports Negative Revenue On Junk Bond Prop-Trading Fiasco





Earlier today, Jefferies which is now a part of Leucadia, provided this much anticipated glimpse into how the rest of Wall Street is doing. The answer, if Jefferies is any indication, is "quote horribly" because just like two of the past four quarters, Q3 was also a disaster and indicative of nothing short of a trading bloodbath on Wall Street in the past three months of trading and especially August. In fact, it was so bad for Jefferies, it reported a massive 31% plunge in total revenues down to $579 million resulting in net income of a tiny $2.5 million as a result of what may be only its first negative fixed income revenue print since the financial crisis.

 
Tyler Durden's picture

Was Monday's ETF Collapse Just A Warmup?





During Monday's flurry of tripped circuit breakers and flash crashing mayhem, ETF investors learned the hard way that Howard Marks was precisely correct when he warned that ETFs "can't be more liquid than the underlying and we know the underlying can become highly illiquid." The question now, is whether subsequent flash crashes will trigger even more spectacular divergences between fair value and ETF unit prices on the way to proving, once and for all, that ETFs may indeed be the new financial weapons of mass destruction.

 
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