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Goldman Blames Fed For Creating "Abnormal" Trading Enviornment

Tyler Durden's picture


First it was JPM, then it was, surprisingly, none other than NY Fed chief Bill Dudley - the head of the trading desk that proudly boasts trader extraordinaire Kevin Henry, then it was Citi yesterday, and now joining the chorus of banks and Fed presidents blaming all that is wrong in the banking system on near record low volatility resulting in a collapse in trading is none other than Goldman Sachs, whose president Gary Cohn spoke at a Sanford Bernstein conference earlier today, said that fixed income volumes - the bread and butter of Goldman's juggernaut FICC division - are under significant pressure, and blamed low interest rates and, drumroll, the Fed's QE on the drop in volatility, summarizing the current trading environment as "Abnormal." It appears increasingly more are voicing their displeasure with the New Centrally-Planned Abnormal... but only after their balance sheets are full to the brim with some $2.8 trillion in fungible reserves.

Some other soundbites from Cohn:

  • Cohn says economic factors are biggest driver of slow trading; economic fundamentals bigger driver than regulation

Translated: the bond market has realized what is happening to the economy, which means stocks not so much.

  • Cohn says market is perhaps overly influenced by ‘recency’

Translated: the last crash was caused by the Fed; therefore everyone knows who will be the reason for the next crash.

  • Cohn: We believe strongly trading volume will return to normal

Translated: at some point QE will end and all hell will break loose (yes, the Lehman deflationary collapse "recenecy" is still there, and everyone remembers who the biggest winners were from the Lehman and AIG collapse). We will be sure to profit again.

  • Cohn says Goldman Sachs is taking market share in trading; says market share gains may not translate to revenue yet

Translated: it worked for Amazon for 5 years, why shouldn't it work for us too?

  • Cohn: ‘environment for all of the firms is quite difficult’

Translated: It's not just who are getting tired of the Fed's endless manipulation of every asset class.


  • Cohn says M&A pickup may be followed by trading pickup

Translated: he may be right, he may be wrong. One thing is certain: M&A pickup with be followed by a pinkslip, pardon synergy, pickup.

And the main slides from Cohn's presentation. Note the absolute collapse in FX volumes as regulators have finally clamped down on  foreign exchange market manipulators and all that's left are the robots.

Source: Goldman


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Wed, 05/28/2014 - 10:50 | 4801756 dontgoforit
dontgoforit's picture

Well, duh.

Wed, 05/28/2014 - 10:54 | 4801777 insanelysane
insanelysane's picture

No one, I mean no one, we have some of the smartest people on the planet working on Wall Street, and no one could have seen it coming.

- everyone in MSM 5 seconds after next crash

Wed, 05/28/2014 - 10:56 | 4801794 alien-IQ
alien-IQ's picture

If they couldn't see that coming, then they will surely not notice the crowd approaching with a freshly sharpened guillotine.

Wed, 05/28/2014 - 10:57 | 4801806 THX 1178
THX 1178's picture

The fingerpointing begins in earnest. Goldman sez, "Its not our fault, don't hang us from the streetlamps."

Wed, 05/28/2014 - 11:14 | 4801901 cowdiddly
cowdiddly's picture

Goldman did not have a problem quickly applying for a bank charter to get in on the fed feed trough when the money was passed out. I did not know God would be such a hypocrite.

Wed, 05/28/2014 - 11:22 | 4801933 fockewulf190
fockewulf190's picture

Looks like the tits are running out of milk.

Wed, 05/28/2014 - 11:36 | 4801994 BC6
BC6's picture

In other words, the junkie blames the dealer. This junkie should have died in 2008.

Wed, 05/28/2014 - 15:21 | 4802752 Againstthelie
Againstthelie's picture

GS giving support for winding down QE.

Wed, 05/28/2014 - 11:37 | 4802002 espirit
espirit's picture

What?  No Moar Muppets?


Wed, 05/28/2014 - 11:52 | 4802064 disabledvet
disabledvet's picture

They're the muppets now.

Wed, 05/28/2014 - 12:02 | 4802109 dontgoforit
dontgoforit's picture

He who is least prepared is the worst Boy Scout.

Wed, 05/28/2014 - 12:25 | 4802197 More_sellers_th...
More_sellers_than_buyers's picture

I blame Goldman

Wed, 05/28/2014 - 12:32 | 4802223 Headbanger
Headbanger's picture

THX:  That's what I've been saying for months now about the back pedaling done by the Fed and banksters lately.

They KNOW the whole financial system is about to collapse and are fearful as hell about it.

This has me thinking that Obozo may be bringing home troops from Afghanistan to quell the civil riots when it all implodes.

Wed, 05/28/2014 - 12:48 | 4802273 dontgoforit
dontgoforit's picture

The armed services will be with the mob on this one - their paychecks will be worthless and they're not a drafted army any more.

Wed, 05/28/2014 - 11:16 | 4801914 ACP
ACP's picture

Looks like the HFTs are taking the lead from the world's best criminals at the Sachs. Can't let that happen.

BTW, WTF is up with the pullback today? The S&P is down 0.5 points! What is this world coming to??? I thought this market is only supposed to go up!

Wed, 05/28/2014 - 11:42 | 4801967 JRobby
JRobby's picture

Pike em' Just like the middle ages. Up and down the streets of lower Manhattan. Birds and bugs need to eat, same as worms.


Wed, 05/28/2014 - 11:14 | 4801870 Al Huxley
Al Huxley's picture

No, they'll be finger-pointing and blaming each other in a mad attempt to offload responsibility onto somebody else.  I rarely watch CNBC but I did watch it through the course of the big correction back in August 2011 and it was FUCKING HILARIOUS to see everybody telling everybody else how full of shit they were.

Wed, 05/28/2014 - 11:09 | 4801888 agstacks
agstacks's picture

"The people that 'saw it coming' are the cause for the collapse.  People who spoke of free markets, sound money, limited gov, have undermined the foundations of faith and trust in our currency. I think it is clear who is responsible and what must be done next."


Wed, 05/28/2014 - 12:04 | 4802119 dontgoforit
dontgoforit's picture

When the system goes ka-put, we can all starve or freeze together.  At that juncture, it won't matter whose fault it was.

Wed, 05/28/2014 - 12:51 | 4802282 dontgoforit
dontgoforit's picture

The smartest people on earth cannot out-smart Satan.  They can only sidestep his temptations and get right with their Creator.

Wed, 05/28/2014 - 11:17 | 4801917 spekulatn
spekulatn's picture

Nothing a "meaningless mantra" won't cure.


(Fookin dooshbags)



Wed, 05/28/2014 - 11:33 | 4801980 Sisyphus
Sisyphus's picture

Yes, the mantra goes something like this:

Om....mmmore hookers $ blow.

Wed, 05/28/2014 - 10:54 | 4801760 Son of Captain Nemo
Son of Captain Nemo's picture

You gave me too much money!... You told me to lie!... You trusted us!!!...

Definition of a "perfect circle jerk"...

Wed, 05/28/2014 - 10:57 | 4801809 Zirpedge
Zirpedge's picture

So they are expecting Yellen to eat the soggy bisquit for being last to drop a load? 

Wed, 05/28/2014 - 11:00 | 4801822 Son of Captain Nemo
Son of Captain Nemo's picture


Wed, 05/28/2014 - 10:51 | 4801762 LawsofPhysics
LawsofPhysics's picture

Please the PDs are the Fed. 

Execute all these motherfuckers already.  Nothing changes otherwise.

Wed, 05/28/2014 - 11:01 | 4801828 sessinpo
sessinpo's picture

LawsofPhysics    Please the PDs are the Fed. 

Execute all these motherfuckers already.  Nothing changes otherwise.


As if it really changes if you execute anyone? Just another person steps in to fill the role. It's physics.

Wed, 05/28/2014 - 11:22 | 4801926 LawsofPhysics
LawsofPhysics's picture

Bullshit.  You accomplish two things 1) you send a strong fucking message that will change people's behavior (at least for a little while) and 2) you have one less asshat to feed or burn oil in his fancy cars, hence, saving a shitload of calories.


That's a "win-win" in my book motherfucker.

Wed, 05/28/2014 - 10:52 | 4801772 Son of Captain Nemo
Son of Captain Nemo's picture

This is what comes next. And it's not just Rob Kirby who's seein it!

Wed, 05/28/2014 - 11:23 | 4801936 Winston Churchill
Winston Churchill's picture

Great interview,I  had already seen it.

Highly recomended for everyone on ZH.

Wed, 05/28/2014 - 10:54 | 4801779 alien-IQ
alien-IQ's picture

Is this a joke?

Wed, 05/28/2014 - 10:58 | 4801790 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

What would happen if you rigged an election and no one bothered to show up and vote?

What would happen if you rigged a stock market and no bothered to show up and trade?

What would happen if.......

Non participation bitchez. Fighting the beast only enables it.

Stockman aka Voteman is coming next.

Wed, 05/28/2014 - 11:06 | 4801868 sessinpo
sessinpo's picture

Dewey Cheatum Howe    What would happen if you rigged an election and no one bothered to show up and vote?

What would happen if you rigged a stock market and no bothered to show up and trade?

What would happen if.......

Non participation bitchez. Fighting the beast only enables it.

Stockman aka Voteman is coming next.


Who controls the information? If no one showed up, how would you know except for what is reported. Non participation means you have given up and they have won, which is what they want. How you particpate is the difference. We have yet to see the correct type of participation, which I believe is a direct non violent confrontation with DC. And that ain't going to happen until things get much worse because people are to busy just trying to scrape by.

Wed, 05/28/2014 - 11:13 | 4801898 agstacks
agstacks's picture

They will make sure it is a violent confrontation and your group is the one labeled the domestic terrist.  The sheeple will appluad when they're all rounded up.  You know, "DC STRONG" or something like that. People love it. 

Wed, 05/28/2014 - 11:32 | 4801972 PeeramidIdeologies
PeeramidIdeologies's picture

A society outside of their means of control, namely money and law, would have them on their knees within a couple years. Once some of the bigger players start playing hard ball it won't seem so impossible.

Wed, 05/28/2014 - 10:55 | 4801791 kliguy38
kliguy38's picture


Wed, 05/28/2014 - 10:56 | 4801795 disabledvet
disabledvet's picture

Ummmmm...."nice knowin' ya."

Wed, 05/28/2014 - 10:56 | 4801799 slaughterer
slaughterer's picture

Cohn says that if Kevin Henry went on a lengthy vacation volatility would pick up.  With Kevin Henry active on the NYFED trading desk, GS has no hope of seeing much trading revenue this quarter.  

Wed, 05/28/2014 - 10:56 | 4801800 ssp2s
ssp2s's picture

Translation: The market is about to tank and there must be a suitable target for the blame.

Wed, 05/28/2014 - 12:24 | 4802133 daemon
daemon's picture

" Translation: The market is about to tank and there must be a suitable target for the blame. "

Definitely. Another translation may well be : " we have refilled our coffers with precious metals, we own a sufficient amount of assets (land, agencies, ...) to effectively take control of the country, and it's time for us to get rid of dead organisms,like the FED, and finalize the implementation of what is soon to officially become USAristocracy. "

Wed, 05/28/2014 - 13:41 | 4802450 SDShack
SDShack's picture

Yep, all these "leaks" are just TPTB telegraphing to each other that the big shoe is about to drop. The next edition of Pump & Dump is about to happen. You can bet a gold double eagle that the next "sacrificial lamb" has been identified and the wolves are just circling it. Que the deer in the headlights. When the attack happens, it will be so fast and violent, most will not have time to react. Plan accordingly.

Wed, 05/28/2014 - 10:57 | 4801803 mt paul
mt paul's picture

dog ate

my loosing trades....


Wed, 05/28/2014 - 11:08 | 4801879 CPL
CPL's picture

Somehow with AIG burning down they couldn't lose either.

Wed, 05/28/2014 - 10:56 | 4801804 Hacked Economy
Hacked Economy's picture

Totally OT, but I had to post this at the first chance I got.

This morning as I was getting coffee on the way to work, a SWAT team from Farmington, CA strolled in. They were in uniform and armed, and apparently stopping for a break while on a drive to some destination.

Here's the kicker...according to Wikipedia and City-Data, the area of Farmington has only 207 residents(!) as of the 2010 census, and is actually shrinking! What the hell?? So what's next for that tiny town, a free MRAP from the Feds?

I'm telling you, people, this $hit's getting real. It's not just online rumor anymore...all the towns and cities are arming themselves for some future contingency.

Wed, 05/28/2014 - 11:03 | 4801844 BeetleBailey
BeetleBailey's picture

Probably on some training op....

....using live targets....

Wed, 05/28/2014 - 11:18 | 4801918 Chupacabra-322
Chupacabra-322's picture

Yup. When all hell breaks loose, & it eventually will. It will be open season with anyone wearing GI Joe costume.

Wed, 05/28/2014 - 11:13 | 4801905 buzzsaw99
buzzsaw99's picture

i saw the fugliest suv on the planet today. it said "homeland security" on it but clearly it was designed for riot control.

Wed, 05/28/2014 - 11:14 | 4801906 Bananamerican
Bananamerican's picture

"I'm telling you, people, this $hit's getting real. It's not just online rumor anymore...all the towns and cities are arming themselves for some future contingency"
I think in that case it just shows how far down the rabbit hole; the "take", the "vig", the "mordita", the "Mission Creep" of wasted tax dollars go....

After all," heroic 1st responders" gotta eat...

Wed, 05/28/2014 - 11:37 | 4802000 JRobby
JRobby's picture

Training Exercises

Wed, 05/28/2014 - 10:57 | 4801808 BeetleBailey
BeetleBailey's picture

Akin to a cojoined Siamese twin blaming their other half for farting.


Wed, 05/28/2014 - 11:00 | 4801817 orangedrinkandchips
orangedrinkandchips's picture

SHUT THE FUCK UP AND BUY MORE GS....fucking cocksucker

Wed, 05/28/2014 - 10:59 | 4801818 CPL
Wed, 05/28/2014 - 11:00 | 4801820 youngman
youngman's picture

I wonder if GM is selling CDS now????  They know what AIG got after they failed..a big government bailout.....GM could use another one..and Goldman will get paid off too....its a win win for everyone...

Wed, 05/28/2014 - 11:02 | 4801840 kchrisc
kchrisc's picture

Just more of, "I shot the sheriff, but I did not shoot the deputy."

Sorry, still only one way off the guillotine list.

Wed, 05/28/2014 - 11:03 | 4801848 Al Huxley
Al Huxley's picture

Sorry, was that 'blames' or 'thanks' FED for creating abnormal trading environment?

Wed, 05/28/2014 - 11:04 | 4801850 Eagle Keeper
Eagle Keeper's picture

The new normal....

Wed, 05/28/2014 - 11:04 | 4801852 marathonman
marathonman's picture

So let's see, Goldman and JPM are 'saved' from obliteration by Paulson, the Fed, and Congress and now they want to bite the hand that feeds them?!  Go for it big dog.  Go out there and build that Ponzi on your own Cohn.  What a joke...

Wed, 05/28/2014 - 11:06 | 4801865 quasimodo
quasimodo's picture
  • Cohn says market is perhaps overly influenced by ‘recency’


Is all these assholes have left are catchy phrases? Really, it is pathetic how they keep up this charade with all the word wizardry and tomfoolery. Does he drink his coffee with his pinky sticking out?


Wed, 05/28/2014 - 11:59 | 4802093 disabledvet
disabledvet's picture

These clowns assume people are as tripod as they are.

Not a bad assumption mind you...most are that stupid...but that's not what they're paid to be.

And with a war effort "the time to take our Von Clauswitz is now.

Wed, 05/28/2014 - 12:29 | 4802216 detached.amusement
detached.amusement's picture

they already changed the meaning of all the normal words, time to start making up new ones

Wed, 05/28/2014 - 11:08 | 4801880 the 300000000th...
the 300000000th percent's picture

You just can't make this shit up, for a minute I thought I was reading the Onion. 

Wed, 05/28/2014 - 11:09 | 4801889 I Write Code
I Write Code's picture

Interesting.  I expect that the sun rises in the east only if the Fed requests it, so I assume the low volatility is an artifact of the Fed, and maybe even Ms. Yellen's very own contribution to their record of brilliance, but I have been puzzled as to "why"?  And this must be the answer!  It is her social conscience at work, a way to rein in the rent-seeking banksters!

I am, however, still trying to work out wtf is going on with the bond rates plunging.  Either that too is just how the Fed planned it - or else isn't.  And if it isn't, then they screwed up royally somewhere.  And if it isn't, then they can cut the QE crap right now.  Or else, the Goldmans saw that the Fed screwed up and they are leveraging the heck out of the tiny rally in prices it could ever be, confident that Yellen will not suddenly reverse it AND PUT IT BACK ON TRACK, Goldman planning on unloading (and probably shorting) everything to the muppets on the day the bell rings.  That, y'know, is a guaranteed disaster.  Hey I'm just working this out as I type.  Shazbat.

Wed, 05/28/2014 - 11:23 | 4801937 Dr. Engali
Dr. Engali's picture

The bond rally is due to the fact that the fed has taken enough out of the system where they can control the rates. The bottom line is this is a highly leveraged collateral based system and U.S treasuries are the collateral.When the fed has loaded up it's balance sheet with treasuries that leave little else for institutions and hedge funds to use. That is why the over night reverse repo was put in place. It's also very telling that it get's it's most use when it's the end of the quarter and funds have to report.

Wed, 05/28/2014 - 12:02 | 4802108 disabledvet
disabledvet's picture

No. That's called "the entire Federal Government" not the Fed.

We're building easily the biggest war effort in human history...and we are using it. It's long past time for Putin to take Kiev now. That war alone is a trillion in debt issuance.

Wed, 05/28/2014 - 11:11 | 4801895 Doom and Dust
Doom and Dust's picture

The tribe always plays both sides.

Wed, 05/28/2014 - 11:11 | 4801897 RazvanM
RazvanM's picture

The problem is really of fleecing the state through frontrunning easy money, fleecing everybody through visible and hidden taxes and fleecing the investors through volatility indexes. NOW they complain that there is no volatility. Maybe they want more suckers to fleece?

Should start stealing directly from everybody. I mean continue.

Wed, 05/28/2014 - 12:03 | 4802112 disabledvet
disabledvet's picture

The only suckers now are them.

Wed, 05/28/2014 - 11:15 | 4801910 buzzsaw99
buzzsaw99's picture

so then for the squid 2009 was the good old days?

Wed, 05/28/2014 - 11:15 | 4801911 Al Huxley
Al Huxley's picture

Talk about biting the hand that feeds you - what a bunch of fucking ingrates.

Wed, 05/28/2014 - 11:51 | 4802054 Bananamerican
Bananamerican's picture

Hey, Goldman's Sicks were best buds with AIG (even discussed merger) before taking them down...
It's what GS does.....They cheat people.

Wed, 05/28/2014 - 12:04 | 4802118 disabledvet
disabledvet's picture

Wait 'till you see what AIG does.

Wed, 05/28/2014 - 11:19 | 4801921 Last of the Mid...
Last of the Middle Class's picture

"It's not our fault, don't hang this on us"  How about we hang them all then let God sort them out. Sounds like a fresh start, the next group won't be quite so. . . glib.

Wed, 05/28/2014 - 11:23 | 4801938 OC Sure
OC Sure's picture



So counterfeiting is essentially the means by which central bankers facilitate a bear raid on wall street and mainstreet?

Wed, 05/28/2014 - 11:28 | 4801942 NuYawkFrankie
NuYawkFrankie's picture

re Goldman Blames Fed...

Whatever happened to  'Honor Among Thieves' ?

Wed, 05/28/2014 - 11:31 | 4801968 pndr4495
pndr4495's picture

...... all , ALL , of the current chaos , inefficiency , lopsided advantages , making not for profit exchanges for profit business entities , implementing the maker / taker model , HFT  and don't forget about the propensity for human beings to be corrupt and unethical , the whole magilla - was created when HUMAN BEINGS were removed from the fundamental operations of financial markets. A lot of people continue to suffer every day as a result of that development. 

Wed, 05/28/2014 - 11:55 | 4802080 Bananamerican
Bananamerican's picture

...... all , ALL , of the current chaos , inefficiency , lopsided advantages , making not for profit exchanges for profit business ... was created when BANKS were created..

Wed, 05/28/2014 - 11:33 | 4801976 Waterfallsparkles
Waterfallsparkles's picture

No traders to scalp.  Without Traders no profit.

Wed, 05/28/2014 - 12:05 | 4802124 disabledvet
disabledvet's picture


Wed, 05/28/2014 - 11:35 | 4801987 teslaberry
teslaberry's picture

goldman owns the fed. they are a member/owner. their boy tim geitner was the fed head of the ny fed. 


where the fuck do these goldman guys get off thinking the rest of the world is a bunch of morons who don't know this?


Wed, 05/28/2014 - 11:36 | 4801996 PeeramidIdeologies
PeeramidIdeologies's picture

Makes sense when you consider what the ultimate mandate of the fed really is.

Wed, 05/28/2014 - 11:37 | 4802001 RaceToTheBottom
RaceToTheBottom's picture

I remember early in the crisis all the WS Bankster firms were screaming for NYPD protection.  

They assumed that people (sheep) would figure the theft out immediately.  


It took a while, but it is slowly sneaking into peoples minds.  Expect the NYPD presence on WS to increase...

Wed, 05/28/2014 - 11:37 | 4802007 Z_End
Z_End's picture

The music is about to stop... pick your chair quickly...

Wed, 05/28/2014 - 11:49 | 4802045 RaceToTheBottom
RaceToTheBottom's picture

How long is the title of this article going to remain mispelled?


Was it written by a WS'er?

Wed, 05/28/2014 - 12:00 | 4802099 Seasmoke
Seasmoke's picture

I have 250,000 cash I would to deposit. Can anyone direct me to Goldman Sachs nearest branch office ??

Wed, 05/28/2014 - 12:03 | 4802113 pndr4495
pndr4495's picture

33 Liberty Street , NY, Ny 10045

Thu, 05/29/2014 - 10:21 | 4802232 RaceToTheBottom
RaceToTheBottom's picture

Save yourself the postage:

1)  Withdraw the money from your bankstering institution; ask for cash.

2)  Build a fire in your front yard.  Don't do the back yard, it will impress your neighbors, trust me.

3)  In case you have never built a fire, follow this technique:

3A) First remove your lawn in a small circle; get some rocks to outline the circle.  

3B) Place some materials in the center of the circle in the following order:  Large wood intermixed with the Wall Street Journal (WSJ) wadded up in a random fashion.

3C)  Add small dry wood on top of the WSJ.  

3D)  Douse and I mean douse the wood paper mixture with liberal amounts of lighter fluid.  If you don't have lighter fluid, use gasoline from your local gas station.

4)  Step back from the circle and toss a few lit matches into the paper wood mixture.  Be careful not to burn yourself as flames should burst quite high.

5)  By this time your neighbors should be looking out your windows and walking to their front yards.   If not throw a few leftover firecrackers into the flames.

6) Run back into your house and change into your best suit.  Don't bother with the tie as you will not need it.

7)  While wearing your suit with the 250,000 in your nicest briefcase, run around the fire, first clockwise and then counterclockwise chanting and raising your hands to the sky.

8)  I personally think that you should scream the names of Greenspam, Paulson, Geitner, etc.  Be sure and scream that you are doing Gods work.

9)  Take off your suit top and your white shirt while continuing this until the entire neighborhood is out on the street watching, but not long enough that they have entered your yard with restraints.

10) Open you briefcase and throw the contents into the fire.  By this time the flames should have reduced to a full roar but allow you to get close to make sure all the bills burn.

11) Congratulations, you are a Goldman Sachs customer.

Wed, 05/28/2014 - 12:13 | 4802152 Ban KKiller
Ban KKiller's picture

"FUNGIBLE" assets? When you start with a comes back to bite, big time eh? If those assets really were fungible there wold not be a problem! 

Wed, 05/28/2014 - 12:21 | 4802180 russwinter
russwinter's picture

Vampire squid must be thinking picking up nickels in front of steamrollers is no longer worth it? 

Wed, 05/28/2014 - 13:26 | 4802405 yogibear
yogibear's picture

It will be fun to see the sharks on Wall Street point fingers and eat each other once the Fed loses control. 

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