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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.
First the headline numbers: both headline EPS of $2.90 and adjusted EPS of $2.64 missed the consensus estimate of $3.00, which was the first Goldman EPS miss in 12 quarter, while Goldman's revenues did no better, printing at $6.86 billion, below the $7.07 billion estimate, revenue which was not only an 18% drop from a year ago, but also matches the worst quarterly revenue Goldman has generated since 2011!
Amazing how things change when one can't simply frontrun central banks with impunity, and yes - Tepper was right.
The chart below lays out the details:
First the good news: both Investment banking, at $1.6 billion in revenue and institutional equities, at $1.75 billion, posted Y/Y increases of 6.3% and 9.4%, respectively. The banking rise was to be expected, with Goldman remaining the underwriter of choice for most IPOs and debt offerings, as well as the go to advisor for M&A deals and various corporate buybacks.
The bad news however was dramatic: everyone expected FICC would be down, but plunging 33% to $1.46 billion from $2.2 billion a year ago was certainly a surprise. Because if even Goldman can't make commissions on moving bonds, commodities and currencies, then the environment has gotten beyond illiquid. Thank the HFTs and the central banks.
Even worse, however, was Goldman's own prop book (yes, the FDIC-insured hedge fund still has a prop trading operation despite the Volcker Rule, only it calls it Investing and Lending now instead of by its old name "Prop trading"), which plummeted by a whopping 60% from $1.7 billion a year ago to a paltry $670 million. This was the lowest revenue Goldman's prop trading group has generated since Q2 2012 and bodes very badly for the future of not only banks but hedge funds. Because if Goldman, which has spawned more central bankers than any other bank, can't make money trading its own book in this environment, nobody else can.
This is what Lloyd Blankfein had to say about the disappointing results:
“We experienced lower levels of activity and declining asset prices during the quarter, reflecting renewed concerns about global economic growth,” said Lloyd C. Blankfein, Chairman and Chief Executive Officer. “We continue to see strong levels of activity in Investment Banking and growth in Investment Management, and looking ahead, are encouraged by the competitive positioning of our global client franchise. Our focus on serving our clients and improving operating leverage puts us in a strong position to generate superior returns for our shareholders.”
At least Lloyd didn't sugar coat it too much unlike his CEO peers at BofA and JPM. And, he also promptly took it out on his employees: accrued compensation expense plunged to $2.35 billion, down 16% from a year ago, leading to a compensation margin of just 34% the lowest in 2015, even as the bank added another 2000 employees, bringing its total staffing level to 36,900, up from 33,500 a year ago.
Which means that on a trailing 12 month basis, the average Goldman banker compensation has tumbled from $373,181 to just $340,759 - this is the lowest compensation accrual per average banker in the pat five years.
And yes, while for the average American this is still a whopping amount, that even Goldman is now suffering wage deflation is hardly good news for the rest of the economy.
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Fuck Goldman
Goldman Suffers Terrible Quarter
A moment of silence please.....OK....that's enough.
While I could care less about Goldman, the GS earnings speak volumes about the policies the FED and this fool in the White House have pursued and their impact on our ecomomy.
You know things are bad when the guys running the casino are losing money.
It's going to be okay, though. We taxpayers will backstop our good buddies at Goldman.
Learn to fucking read past the headline. GS made an insane amount of money, just a little less than last year.
Now we know why the kenyan nigger is out trying to drum up wars and perpetuate the fake climate change narrative -- the banks need more baby blood. As always.
They are making billions per quarter...not losing...rofl!
When market dynamics change the banks always have a rough time navigating. That's the difficult part of trading with billions. Much harder to be as quick and nimble as smaller firms or individuals. You combine that with the fact that half there traders started trading after QE1 began and have absolutely no clue what they are doing when they can't just short vol all day.
EAT SHIT, GOLDMAN!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
More Goldies moving into public service.
Many positions will need new blood in the last year of the Obama Era.
And vice versa.
Hopefully Goldman Sucks goes down the drain.
Are we absoluely, positively sure it's the big banks that are in charge of the world? I mean absolutely sure?
All evidence points to the banks being one of several coordinated administrative arms of world management. The banks are not solely in charge of the world, but they currently hold the most power.
The question is: Who or what is the coordinating power behind the administrative arms and once they are out in the open, what to do about it?
wow, when the jooooooos can't even make enough money with yours and my free money, you know sum ting wong. don't worry, they'll still make money, just not as much as theyve become accustomed to . . . .
Why are you so focused on the "jooos"?
(did they hurt you?)
(cut you deep?)
Equity futures don't seem to care. Imagine that. I'd sell some VIX just to be safe.
You are surprised by that?
Take the money back from Blankfien to keep the Jewish sewer system operational. When he is broke, shut the sewer down!
Can't the Fed just give Goldman Sachs more free money to invest? What's to stop the Fed from doing stealth QE??
Goldman, like Coke and Toyota is a "means to an end."
Its "profitability" makes no difference.
Its goal is social control as a behavioral "fence" for society.
The same thing is true of the other "society makers."
McDonalds, GE, Apple, etc.
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Unless you make your own society.
Please expound. I'd like to better understand your premise.
It's easy to see from the numbers, the GS compensation pool largely remained the same. The total compensation pool was merely divided among a greater number of employees.
GS is doing just fine by that reckoning. More employees at GS is probably a sign something is in the works requiring the increased staffing.
Maybe god spoke to Blankfein and told him to build an ark.
Dunno if you saw, ZH gets a mention on MarketWatch. They laugh, but you can hear the pheer in their voices...
http://www.marketwatch.com/story/get-ready-for-panic-signals-from-the-fe...
(many here said rates were going nowhere dude, wasn't a hard call unless you're trying to kid yourself about teh overhangzzzzz....)
LOL...
this too, is bullish
Companies like Goldman are nothing more than Jewish mafia organizations cloaked in respectability. They hide behind the facade of a banking institution when in fact they literally steal from investors and the US taxpayer on a regular basis. Blankfein should have been rotating over a spit some time ago.
To the disapproval vote, ask yourself this. Let's assume that all of these major US banks were being run by Chinese Americans. The Federal Reserve was also made up almost exclusively of Chinese Americans, with the head of the Fed being Chinese American. Do you think you might view the situation a little differently? After all, Chinese Americans make up a larger percentage of the US general population than Jewish Americans. Amazing what a little tweek will do to one's perspective, doesn't it?
I'm laughing on the bus while reading this and I am quite sure everybody thinks I'm reacting to something on Facefuck.
God's work.
Well.. i actually expecting this. How long your ASSMEREEKAA companies doing shits.
1. Your Ass'd govt put ZIRP.
2. Where those free money go?
3. China & EM.
4. Once these China & EM show sick symptom?
5. Those U-Ass companies panicking. And hastily dumped their investment in CN & EM.
6. Now you got back some of your investment (why some? Xause they dumped it together. So you habe to incur loss, caused by flooding of this stocks floods at the same time)
7. Now these U-Ass have back their doollah. And what next?
8. Invest in JA, EU, U-Ass? They have ZIRP & NIRP. Go back to CN & EM? Are you nuts. See the last riots?? Sigh!!
9. You have money that doesn't give you handsome ROI anymore. So aren't you supposed to "invest that damned printed money for a return"?
10. It's time Q-report!! What the helli could do anymore? Cost cutting? DONE! Cut jobs? DONE! Cut assets? DONE!! So, what the FUCK that i can do anymore??
So i expect (those exposure to the idiocy of central bank)? To start showing the cancerous blob!!
That's why when you based your economy in delusion..
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This ain't over yet!!
Remember the companies in CN & EM thar you bailout your investment? Those companies bexoming insolvent because of yor retractions. So now they can't payout THE INTEREST OR MATURED CORPORATE DEBT PAPERS, that they issued during the golden happy times.
Now, this is my question that i patiently wait to BLOW UP in U-Ass corporates, hedge funds, pension funds, mutual funds, banks, and any other investment institutions.
WHO HOLD THESE DE FACTO DEFAULTED CORPORATES DEBT PAPERS??
You do know corporates debt papers are usually much BIGGER than their stocks CAPEX, right? So, the last money lost just in chinese alone, from last crash? >4 T$!!
Now, HOW MUCH DEBT PAPERS ISSUED BY CN & EM? AND WHO THE ISIOTS THAT'S HOLDING THEM??
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I'm not economists. However, it doesn't takes genius to read what trouble you DM would have to face. Bwahahahahaha...
Don't worry they have informed Yellen what to do...and made the appropriate bets. Until this rackeetering organization is broken up....nothing will change.
Since when is making many billions in rackteering terrible. When they make a negative profit of $5 Billion a quarter...that will be terrible. manipulation and fraud for many billions in profit...is terrible...but for US!