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Goldman Closes Long Russell 2000 Recommendation At A Loss

Tyler Durden's picture




 

And so the latest Goldman recommendation to muppets is now officially a dud.

Closing our Long Russell recommendation with a modest potential loss

 

We are closing our long Russell 2000 recommendation with a modest potential loss, initiated on March 15 following the better-than-expected data in the first of the regional surveys. The recommendation was predicated on (i) still friendly, if not accelerating, US macro data, (ii) supportive monetary policy, and (iii) better insulation that Russell offers against global concerns, including Europe and China, relative to some other implementations (S&P 500 index and Wavefront GDP Growth Basket).

 

Since then, the macro data (both US and global) have come in more mixed than we would like, with Friday’s non-farm employment growth report clearly disappointing. Furthermore, last week’s “guts” of the ISM were weaker than the headline reading, and the momentum of our Global Leading Indicator (GLI) stalled. Combined with the fact that the Fed may be further away from a fresh round of easing than we had expected, two out of three pillars supporting the recommendation were compromised. And as the risk/reward of backing the US growth upgrade worsened, Euro area sovereign risks resurfaced yet again. With an upcoming “lull” in the US macro calendar and a significant batch of Chinese data forthcoming, we think it is prudent to step back and re-evaluate our overall tactical trading view.

Unclear if Goldman, which top ticked the market to the penny, with its "once in a lifetime" opportunity to rotate out of bonds and into stocks, has yet given the all clear to buy stocks, i.e., tell muppets to short equities. As a reminder here is what we said then:

Roughly at the same time Francesco Garzarelli fired the first warning shot against Treasurys on January 23, 2012, telling 'clients' that "We are now of the view that a break to the upside, to 2.25-2.50%, is likely and recommend going tactically short. Using Mar-12 futures contracts, which closed on Friday at 130-08, we would aim for a target of 126-00 and stops on a close above 132-00" a trade which has largely worked which means that the Goldman counter-axe is hurting big (although following the trade snap yesterday this may be over for now), the firm's Peter Oppenheimer started drafting a magnum opus, making a 40 page case, chock full of graphs, charts, bullet points, and footnotes, iPad optimized and likely coming to a Kindle near you, desperate to convince clients to sell their bonds to Goldman, and to buy all of Goldman's inventory of stocks from the firm because "After more than a decade of de-rating, equities are implying unrealistically large declines in growth and returns into the future." As a reminder, this is a deja vu repeat of precisely the same trade that Goldman enacted back in 2011... and then back in 2010... and each of those times was accompanied by lots of pretty charts and fancy bullets. Will this time be different, and is the proper call, as usual, to trade alongside Goldman (sell equities, buy bonds), or to do what Goldman tells the muppets to do? You decide.

For those who never had a chance to decide, the end result is the 10 Year is now back to just over 2%, down from nearly 2.40% when Goldman skewered its clients on this the latest occasion.

 

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Sun, 04/08/2012 - 19:24 | 2326780 devo
devo's picture

The FED and Goldman are like reality TV

Sun, 04/08/2012 - 19:36 | 2326808 Silver Bug
Silver Bug's picture

What a surprise! Once again remember the Goldman rule, never listen to Goldman!

 

http://jimrickards.blogspot.ca/

Sun, 04/08/2012 - 19:54 | 2326831 ihedgemyhedges
ihedgemyhedges's picture

Cut 'em a break.  They're only trying to help their "clients"......................

Sun, 04/08/2012 - 20:27 | 2326878 Stax Edwards
Stax Edwards's picture

OT:

Ran across this on CR and had to share it.  Pretty funny stuff. 

Yoram Bauman: Stand Up Economist

http://www.calculatedriskblog.com/2012/04/stand-up-economist-yoram-bauma...

Enjoy!

Sun, 04/08/2012 - 20:32 | 2326893 Stax Edwards
Stax Edwards's picture

He is really funny!  Here is some more:

http://www.standupeconomist.com/videos/#aea2012

 

Mon, 04/09/2012 - 00:35 | 2327265 Nobody For President
Nobody For President's picture

Better rule - fade Goldman. I took the opposite side with some judious in and outs of TZA and have done reasonably well.

Sun, 04/08/2012 - 19:24 | 2326781 HelluvaEngineer
HelluvaEngineer's picture

Oooops.  Our bad.  Sorry Kermit.

Sun, 04/08/2012 - 19:26 | 2326788 YesWeKahn
YesWeKahn's picture

The futures are down, Goldman must know that, they closed their positions last thursday.

Sun, 04/08/2012 - 19:29 | 2326789 asteroids
asteroids's picture

How much you want to bet the IWM will be down at least 2% on the open? I wonder if we might see a mini-crash tomorrow.

Sun, 04/08/2012 - 19:50 | 2326823 distopiandreamboy
distopiandreamboy's picture

Ben will sneeze and we'll all wake up to stories about Quantiative sn-easing

Sun, 04/08/2012 - 19:51 | 2326827 TradingJoe
TradingJoe's picture

If I were you, which I'm not, (thank god), I wouldn't bet ON IT!!!

Mon, 04/09/2012 - 01:52 | 2327312 Non Passaran
Non Passaran's picture

I placed my bets last week and I'm good to go, short Russell and SPX, long PMs and the miners (ugh).

Sun, 04/08/2012 - 19:33 | 2326794 SwingForce
SwingForce's picture

Yeah, The Long Good Buy report can be used for toilet paper. (for about 2 weeks)

Sun, 04/08/2012 - 19:49 | 2326809 ExploitTheMarket
ExploitTheMarket's picture

Has GOLDMAN SLAGS given any recommendations recently that have not resulted in a loss?

*(disclaimer: It was discovered a few days ago that the NY investment bank, Goldman Slags, owns 16% of a prostitution ring/business called Backpage.com)

Sun, 04/08/2012 - 20:14 | 2326858 knukles
knukles's picture

Horizontal Diversification

Sun, 04/08/2012 - 21:30 | 2326998 WonderDawg
WonderDawg's picture

Excellent!

Sun, 04/08/2012 - 19:39 | 2326812 dow2000
dow2000's picture

Muppets lose again....who the hell still does business with these crooks?

Sun, 04/08/2012 - 19:42 | 2326819 gatorengineer
gatorengineer's picture

Well.... Wait a second, if Goldmansucks says close the long, then it means QE3 is closer than we think and now its time to go LONG.  Bullish!!!!!

 

<Sarc off> not sure of anything anymore however....... Position Long Canned Food and Shotgun shells.............

Sun, 04/08/2012 - 19:44 | 2326821 ThisIsBob
ThisIsBob's picture

A win-win for Goldman.  Comish in, comish out.

Sun, 04/08/2012 - 19:56 | 2326832 rokka
rokka's picture

I can't imagine anybody trading iwm would listen to these clowns. 

Sun, 04/08/2012 - 20:06 | 2326849 TooBearish
TooBearish's picture

Fuk Goldman and their stoopid clients- IBs that have access to FED discount window and public capital markets to raise both debt and equity  NEED TO GO AWAY , TBTFs NEED TO GO AWAY - this system is busted - fuk it

Sun, 04/08/2012 - 20:28 | 2326881 banksterhater
banksterhater's picture

I think it was Bullard that whispered "I don't see why we need Primary Dealers" did anyone catch that? End of CNBC interview last time. He even lowered his voice, the COWARD.

Sun, 04/08/2012 - 20:06 | 2326850 CryingBear
CryingBear's picture

LOL

Sun, 04/08/2012 - 20:11 | 2326854 theTribster
theTribster's picture

How about sell bonds AND sell equities? Pull the trigger on hard assets, especially those that can "produce" some type of ongoing value like real estate. Unfortuantely, the markets are so completely manipulated its hard to really understand what is going on - what would we do without ZH? Shit, don't even think about it -:)

Sun, 04/08/2012 - 20:22 | 2326870 Cheshire
Cheshire's picture

Goldman recommends selling everything and burning the cash to beat the inflation curve.

Sun, 04/08/2012 - 20:23 | 2326873 PolishHammer
PolishHammer's picture

How about Bubba Watson on the 10th? How about that nerds?

Sun, 04/08/2012 - 20:30 | 2326886 banksterhater
banksterhater's picture

Bubba hit some fantastic shots. I think we have a new phrase "The Bubba Sling" (or Bubba Banana?)

Sun, 04/08/2012 - 21:17 | 2326967 sabra1
sabra1's picture

Bubba Shrimp?

Sun, 04/08/2012 - 20:27 | 2326879 monopoly
monopoly's picture

GS has a lot of wealthy clients. I cannot understand why they have not figured this out yet. Why do they leave their accounts with a company that steals, rapes, and consistently takes money away from clients. Why is this bloated piece of shit not on the pink sheets.

Sun, 04/08/2012 - 20:33 | 2326894 Hansel
Hansel's picture

Because they extorted a bailout for their derivative counterparties... but you knew that :)

Sun, 04/08/2012 - 20:31 | 2326891 streetcrawler
streetcrawler's picture

I don't know what the problem is. The new "long" is three weeks.

Sun, 04/08/2012 - 21:06 | 2326952 disabledvet
disabledvet's picture

yeah, no shit. now is the "lifetime play"? we're up 100 percent! how about "50 percent ago" morons? oh, that's right. you were making all your money on the short side! OOPS! Forgot all about "showing some muscle at the bottom." anywho..."the rock bottom price for natural gas must be a sign of a collapsing economy" (in places) since unlike oil which is consumer related nat gas activity actually tracks business activity...and can't be manipulated in yet another insane scheme concocted by Wall Street "to blow another trillion." I mean..."extension of credit to everyone and everything" was the plan? REALLY? and of course "having failed there now we'll stand in the way of superior products and technology at all costs!" unbelievable. Hoover-ville ing the USA still isn't good enough. Anywho "stick with those utilities." They're shutting down coal mines in Kentucky. Honda has a had a wonderful kick of the Fukushima lows...and as the sole producer of a purely natural gas powered vehicle FOR YEARS i sense a "revolution" of the real kind is upon us as the hopelessly expensive gasoline powered ICE (internal combustion engine) is left in the dust for the vastly more economical and soundly designed and engineered sibling. As the saying goes "there's more American in a Japanese car than in an American one."

Sun, 04/08/2012 - 20:35 | 2326898 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Do you really want to know what goes on in their board room ?

http://www.funnyordie.com/videos/0431c2b257/muppets-vs-goldman-sachs

Sun, 04/08/2012 - 22:19 | 2327074 Marginal Call
Marginal Call's picture

I chuckled, but it's far away from the Wu.

 

http://www.comedycentral.com/video-clips/tw2ltp/chappelle-s-show-wu-tang...

 

 

Old dirty bastard sends his regards.   Yo.

Sun, 04/08/2012 - 20:40 | 2326909 SAME AS IT EVER WAS
SAME AS IT EVER WAS's picture

Damn! I'm long 50 shares of tza.

This could be just as bad as dennis "I'm full of bs on cnbs" gartman going long gold.

Mon, 04/09/2012 - 00:10 | 2327242 luckylogger
luckylogger's picture

hey--- I have been trading for quite a while and have tried to use tza before. My recomendation is to get out as soon as possible. You may come out in the morning. Which will be a blessing--- take it. Tza is a day trading instrument only. If you read the prospectus you will understand. Personnally I have lost 5k in a down market with tza. it sucks and that is for real. I am not full of shiot they will fuk you as fast as tvix will. get out until u understand the product!!!!!!!

Mon, 04/09/2012 - 01:37 | 2327308 SAME AS IT EVER WAS
SAME AS IT EVER WAS's picture

thx- I planned on dumping this a.m.- its a total pos!

Sun, 04/08/2012 - 21:21 | 2326980 anynonmous
Sun, 04/08/2012 - 21:30 | 2326996 buzzsaw99
buzzsaw99's picture

Quick! To the FAZmobile!

Sun, 04/08/2012 - 21:45 | 2327018 CvlDobd
CvlDobd's picture

How many browbeatings does one need?

 

I just watched Total Recall BTW.

Sun, 04/08/2012 - 22:21 | 2327077 buzzsaw99
buzzsaw99's picture

I think the term you are searching for is "ass reaming" not "browbeating". I would like to buy some options from the bankers to bet against the, er, bankers please.

 

Thank you sir, may I have another?

 

http://www.youtube.com/watch?v=qdFLPn30dvQ

 

[/seven degrees to kevin bacon]

 

 

Sun, 04/08/2012 - 21:51 | 2327025 l1b3rty
l1b3rty's picture

i guess taxes will be raised.

http://silvervigilante.com

Sun, 04/08/2012 - 22:15 | 2327054 El Oregonian
El Oregonian's picture

"Never let a good crisis go to (the panty)waist". I believe this is Barry's new campaign motto by His Muppets...

Sun, 04/08/2012 - 22:11 | 2327060 fadgadget
fadgadget's picture

silver just flashed up to almost $33.

Sun, 04/08/2012 - 22:55 | 2327137 HardAssets
HardAssets's picture

WTF ?

Sun, 04/08/2012 - 22:53 | 2327129 cnhedge
Sun, 04/08/2012 - 23:00 | 2327143 Yen Cross
Yen Cross's picture

 Subsidiary of General Dynamics Tyler, " Gulf Stream"

Mon, 04/09/2012 - 00:09 | 2327238 JohnKing
JohnKing's picture

MuPPet Power ^/^

Do NOT follow this link or you will be banned from the site!