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Goldman Is Baaack: Slide In Trading Volume Offset By Second Highest "Prop" Trading Revenue Since Lehman

Tyler Durden's picture




 

Moments ago Goldman Sachs surprised Wall Street by trouncing expectations of a $3.09 EPS print with a beat over $1, printing at $4.10, coupled with a surge in revenue which declined from Q1's $9.3 billion by far less than consensus (Est. $7.98 billion) had expected, printing at $9.125 billion. What drove this? Clearly not a pick up in trading volumes: FICC declined 10% Y/Y and 22% from a quarter ago, while total Institutional Client Services dropped 11% Y/Y. Investment Banking did pick up modestly, up 15% from last year's $1.552 billion to $1.781 billion but this too did not explain the difference. The answer: Goldman's prop trading group is baaaaack.

With total revenue for the "Investment and Lending" group, aka "Prop", this was a whopping 46% surge in revenue Y/Y and up 36% from past quarter. In fact, Q2's prop trading revenue was the highest since Q1 of 2011! Putting this in context: the Goldman prop trading revenue in Q2 was the second highest since Lehman, lower only than the $2.705 billion in Q1 2011. Rest in piece Volcker Rule.

Surely, the fact that Goldman repurchased $1.25 billion of its stock didn't hurt the bottom line either.

As a result, average Goldman comp rose from $376,840 to $385,988: the highest since Q2 2013.

A great job well done, FDIC-insured hedge fund traders!

 

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Tue, 07/15/2014 - 08:21 | 4958482 GetZeeGold
GetZeeGold's picture

 

 

 

What drove this?

 

Looks like we just found all that hot QE cash.

Tue, 07/15/2014 - 08:50 | 4958563 MeMongo
MeMongo's picture

Booze, coke, whoores all around! What's not to love? 

Sarc\

Tue, 07/15/2014 - 09:56 | 4958754 Richard Chesler
Richard Chesler's picture

Crime does pay.

 

Tue, 07/15/2014 - 09:21 | 4958656 DavidC
DavidC's picture

Don't know, but I'm still trying to open a deposit account with them...

DavidC

Tue, 07/15/2014 - 08:24 | 4958489 FightingtheFed
FightingtheFed's picture

Kill'em All!

Tue, 07/15/2014 - 08:24 | 4958490 TeamDepends
TeamDepends's picture

Times is tough.  Unless you are Sacs o' Gold, Man!

Tue, 07/15/2014 - 08:26 | 4958495 LawsofPhysics
LawsofPhysics's picture

It also helps to have a direct line to The Fed and all the majority of the political puppets in your fucking pocket too....

Tue, 07/15/2014 - 08:31 | 4958502 TeamDepends
TeamDepends's picture

Indeed, and not just here but abroad.  Probably other planets as well.

Tue, 07/15/2014 - 08:39 | 4958533 eclectic syncretist
eclectic syncretist's picture

Trading on inside information is profitable, as this report demonstrates.

Tue, 07/15/2014 - 08:25 | 4958492 LawsofPhysics
LawsofPhysics's picture

Moar gambling with someone else's money...

 

Even further from "fixed" than ever before.

 

Do I really have to say it again?

 

Roll the mother fucking guillotines, nothing changes otherwise.

Tue, 07/15/2014 - 08:35 | 4958498 GetZeeGold
GetZeeGold's picture

 

 

We can lend you our tank.....we're not doing anything with it. Hell, we didn't even ask for it...but we've got one.

Tue, 07/15/2014 - 08:25 | 4958493 firstdivision
firstdivision's picture

Anytime GS Prop losses money, it's just for PR purposes.  When you have the keys to every CB and relevant government official, you never really lose.

Tue, 07/15/2014 - 08:25 | 4958494 youngman
youngman's picture

Of course they are back..they pay for that privledge....The Politicians will be at their door soon for more.....elections coming up...

Tue, 07/15/2014 - 08:34 | 4958504 ekm1
ekm1's picture

Prop Trading?

Goldman has money to trade with?

 

Primary dealers are all insolvent, where did they find their own money for prop trading?

 

Ah, yes. They use excess reserves parked at the Fed.

 

So, if GS made money, then who lost money?

That is a zero sum game.

 

Who else is trading large money?

 

It is impossible that all traders make money. I haven't seen large money firms losing money.

Tue, 07/15/2014 - 08:35 | 4958518 fonzannoon
fonzannoon's picture

Say it isn't so. Have you decided to grace us with your presence again? 

Tue, 07/15/2014 - 08:36 | 4958524 ekm1
ekm1's picture

What's up fonz?

Tue, 07/15/2014 - 08:43 | 4958539 fonzannoon
fonzannoon's picture

Hey! good to see you around! How the hell you been? People are always on here looking for you. what have you been up to? You were missed.

You are not going to believe how much things have  changed since you left. the market has gone up. Also......actually that's about it.

Tue, 07/15/2014 - 08:54 | 4958576 ekm1
ekm1's picture

No the market did not go up. No trading took place.

 

NY Fed comes in at the end of the day marks up digits on computers at will.

 

You want dow at 18k. Pronto. Next month they will type in 18k

Tue, 07/15/2014 - 09:01 | 4958599 fonzannoon
fonzannoon's picture

I am too happy to see you again to break your balls right now. Welcome back.

Tue, 07/15/2014 - 09:07 | 4958619 Dr. Engali
Dr. Engali's picture

Exactly. The BernakenYellenStein already know where the 'markets' are going to end the year. The rest is just optics.

Tue, 07/15/2014 - 09:10 | 4958630 ekm1
ekm1's picture

Doc, nobody is trading much.

There is no market, no major buying and selling to move anything.

These are just digits on computers NY Fed types in at the end of the day.

Tue, 07/15/2014 - 09:15 | 4958640 fonzannoon
fonzannoon's picture

Alright I can't help myself. Yes there are very very few people trading. Creating very low volume. Those few people trading however are buying. retirement fund contributions keep getting plowed into funds along with the few retail that believe there is a recovery. If a significant amount of headbangers (pun intended) insist on shorting the market the fed welcomes the opportunity to make them cover and help drive it higher. 

 

Tue, 07/15/2014 - 09:22 | 4958662 ekm1
ekm1's picture

So, you are telling me that retirement funds brought up Dow from 7k to 17k?

 

Even after world central banks admited they are buying stocks?

 

What is left to buy? Who is selling if all retirement funds are buying?

Tue, 07/15/2014 - 09:33 | 4958689 fonzannoon
fonzannoon's picture

You speak in absolutes. I did not say that. I said that there are people buying. There are people selling. There are pension funds buying. There are pension funds selling. There are Central banks buying....and probably not selling. There is actual activity. It is not so simple as the fed just creating digits at the end of the day. Give it 5 more years of this and I think that may be entirely possible. 

Volume is anemic, agreed. But there are buyers and sellers and the fed is just there to nudge it all in the right direction. It's beautiful man. Central planning nirvana has arrived.

Tue, 07/15/2014 - 09:44 | 4958713 ekm1
ekm1's picture

yes, central planning is here, that's why world is abandoning USD.

Tue, 07/15/2014 - 08:43 | 4958540 Dr. Engali
Dr. Engali's picture

Welcome back to the shitshow EKM.

Tue, 07/15/2014 - 08:55 | 4958580 ekm1
ekm1's picture

thx a lot, humbled

Tue, 07/15/2014 - 09:56 | 4958750 Cathartes Aura
Cathartes Aura's picture

ahhh yes, I too welcome you back ekm.

the more plain speak the better for the coming days, as what was once apparently "hidden" becomes increasingly obvious to those not invested in their own outcomes, and the fate of the system makes itself known.

look forward to reading your words.

Tue, 07/15/2014 - 08:51 | 4958565 BeetleBailey
BeetleBailey's picture

spot on +1,000

Tue, 07/15/2014 - 08:34 | 4958515 Everybodys All ...
Everybodys All American's picture

And here I thought Dodd Frank banned all bank holding companies from prop trading.

Tue, 07/15/2014 - 08:36 | 4958521 buzzsaw99
buzzsaw99's picture

prop trading = muppet dicking. tell me how this is any different from darklays?

Tue, 07/15/2014 - 09:29 | 4958681 csmith
csmith's picture

darklays...good one

Tue, 07/15/2014 - 09:29 | 4958682 csmith
csmith's picture

darklays...good one

Tue, 07/15/2014 - 08:39 | 4958531 orangegeek
orangegeek's picture

prop trading record on miniscule volumes

 

looks like GS is short squeezing the last of the herd

 

enjoy the ride down boys!!

Tue, 07/15/2014 - 08:42 | 4958537 Dr. Engali
Dr. Engali's picture

Clearly the squid is in need of another bail out. Pucker up tax payers.

Tue, 07/15/2014 - 08:50 | 4958560 AdvancingTime
AdvancingTime's picture

It seems no suggestion of weakness no matter how subtle can exist because it may begin to unravel the already fragile consumer confidence. They don't want to enter the weekend or a holiday with a bad market. While I think the market is way to high and distorted it is difficult to time a top. More on the reason for bears to be cautious in the article below.

http://brucewilds.blogspot.com/2014/04/bears-have-little-reason-for-conf...

 

Tue, 07/15/2014 - 08:54 | 4958574 Hubbs
Hubbs's picture

So that's where all the "shovel ready" jobs went.... to Goldman's traders who are shoveling FED backed money flows into their prop trading feed bins.

Tue, 07/15/2014 - 09:17 | 4958646 Catullus
Catullus's picture

Selling SPY puts

Tue, 07/15/2014 - 10:46 | 4958953 SillyWabbits
SillyWabbits's picture

"A business that makes nothing but money is a poor business."
Henry Ford

"Where every something, being blent together turns to a wild of nothing."
William Shakespeare

 

“The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight-of-hand that was ever invented. Banking was conceived in inequity and born in sin... But if you want to continue to be slaves of the bankers and pay the cost of your own slavery, then let the bankers continue to create money and control credit .”

 Josiah Charles Stamp quotes (English Economist President of the Bank of England in the 1920's and the 2nd richest man in Great Britain, 1880-1941)

 

I would add that today, Evil is the root of all money!
SillyWabbits

 

 

Tue, 07/15/2014 - 11:17 | 4959131 chinaboy
chinaboy's picture

Great! The <del>squid</del> firm can front run itself through a 'Prop B trade front runs Prop A trade' algorithm.

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