Goldman Slays Muppets Again

Tyler Durden's picture


The muppet slaying shall continue until no clients remain.

From April 10, via Francesco Garzarelli, two weeks into Q2:

Our recommendation to be short 5-yr Spanish bonds (Oct-2016) against their Italian counterparts (Sept-2016), initiated on March 14 at a yield differential of -6bp, is now at -24.9bp, against our target of -50bp. We would now close the trade, with a potential period total return of 0.35%. in light of the re-pricing that has already occurred, we advise investor to close this particular trade as markets tensions originated on concerns over Spain are now also affecting Italian rates and we do not see much more room for Italian rates to further outperform Spanish ones.

And of course this from June, which just happened to be was a tag-end in June:

We recommend being long an equally-weighted basket of benchmark 5-year Spanish, Irish and Italian government bonds, currently yielding 5.9% on average, for a target of 4.5% and tight stop loss on a close at 6.5%.

In other words, Goldman advised clients to be buying Italian bonds exiting Q1 and heading into Q2, as well as exiting Q2 and heading into Q3.

Enter the company's Q2 10-Q filing. Via Bloomberg:

Goldman Sachs Cut Italy Debt Holdings 92% Last Quarter


Goldman Sachs Group Inc. (GS), the fifth- biggest U.S. bank by assets, cut its holdings of Italian sovereign debt by 92 percent in the second quarter after boosting them in the first three months of the year.


“Market exposure” to Italian government bonds fell to $191 million at the end of June from $2.51 billion at the end of March, the New York-based firm said in a quarterly regulatory filing today. Goldman Sachs also increased its credit-derivative positions on Italy in the quarter, pushing its total market exposure to Italian government and non-government securities to negative $977 million from positive $2.4 billion in March.

And there it is again: Goldman was telling its client muppets to engage in precisely the opposite action of what its own prop traders were actually doing. Because as Goldman itself was selling Italian bonds with both hands, it was telling the remaining muppets to buy Italian bonds, as a hedge to a short Spain position (incidentally, a pair trade on which Goldman also lost money as it was buying Spanish bonds).  If nothing else, it sure makes us feel better about the 15th consecutive long "EURUSD" fade of Tom Stolper. He has never let us down in the previous 14 times. We are confident 15 will again be the charm.

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Thu, 08/09/2012 - 12:06 | 2691372 strongband
strongband's picture

On a short or long enough timeline, Stolper's success rate is always zero.

Thu, 08/09/2012 - 12:11 | 2691388 Pladizow
Pladizow's picture

Goldman's clients are sado-masochists!

Thu, 08/09/2012 - 12:15 | 2691398 Arius
Arius's picture

i might be wrong, but I am putting my neck out there ...

my understanding is that there are chinese walls between departments dealing with client advise and the traders who perform the important function of providing liquidity and taking the other side of the trade.... so, might be a diversion of opinions ... that is my take anyway ... and i will be the first to admit that i might be wrong...

Thu, 08/09/2012 - 12:17 | 2691411 Precious
Precious's picture

"... these fucking muppets are like herpes ..."

Thu, 08/09/2012 - 13:18 | 2691583 Thomas
Thomas's picture

These guys will hang from lamp posts someday.

Thu, 08/09/2012 - 15:32 | 2691724 Precious
Precious's picture

... again the metaphor ...

Thu, 08/09/2012 - 14:14 | 2691727 AldousHuxley
AldousHuxley's picture

back in 2011 insiders bought MF GLobal's Italian bonds at a firesale discounted prices. 5% off of market rate.


I guess they are trying to off load that turd since then.


Forget Spanish side of the trade....Goldman also made French bond pair trade with Italians....anything to get rid of Italians.


They just want that 5% profit by selling at market price.


Also ZH should disclose full net position of GS including any CDS offsets...otherwise ZH is turning to businessinsider I'm afraid.

Thu, 08/09/2012 - 12:17 | 2691416 Getting Old Sucks
Getting Old Sucks's picture

You forgot to add: /sarc

Thu, 08/09/2012 - 12:19 | 2691429 Arius
Arius's picture

makes it more fun that way :-)

Viva muppets ... god knows somebody has to separate the fools from their hard earned money ... doing Gods work on planet earth ..

Thu, 08/09/2012 - 12:45 | 2691507 cougar_w
cougar_w's picture

So all God ever wanted was ... all the money?

And suddenly so many inexplicable things make so much more sense.

Thu, 08/09/2012 - 12:45 | 2691508 odatruf
odatruf's picture

Seriously.  It's like the Darwin Awards of Finance.  Following GS guidance is about the same as this:


Thu, 08/09/2012 - 12:33 | 2691469 kliguy38
kliguy38's picture

correct.......its the same chinese wall i have between my neighbors commode and my commode.....funny thing is i can hear them shit and i can smell their shit just like its in my commode .......funny how that works

Thu, 08/09/2012 - 12:14 | 2691403 old naughty
old naughty's picture

They really know how to pick terms like "muppets".


Thu, 08/09/2012 - 16:52 | 2692202 MillionDollarBoner_
MillionDollarBoner_'s picture

You are 50% right.

They are masochists.

Thu, 08/09/2012 - 12:25 | 2691447 vast-dom
vast-dom's picture

Again and again and again.

Thu, 08/09/2012 - 12:28 | 2691455 Carl Spackler
Carl Spackler's picture

But Stolper's bonus check is always signed by LLoyd.

Why anyone continues to trade through Goldman is beyond me.

Thu, 08/09/2012 - 14:18 | 2691736 slaughterer
slaughterer's picture

GS re-affirmed their conviction buy on RL today in PM with a price target of $200 uising some convoluted logic that defies the headwinds RL is facing.  Result: stock down 2$  Muppets are getting wise.  

Thu, 08/09/2012 - 12:07 | 2691373 govttrader
govttrader's picture

Did I just say its AAAAALLLLLL about positioning??

Thu, 08/09/2012 - 12:07 | 2691374 cougar_w
cougar_w's picture

Snatching up the loot with both hands, here at the end of the world.

Thu, 08/09/2012 - 12:28 | 2691457 fuu
fuu's picture

Leaving the tentacles free to...

Thu, 08/09/2012 - 12:42 | 2691495 cougar_w
cougar_w's picture

to ... to ... no. i'm not going to go there. and later i will scrub that visual from my mind. after i've enjoyed it for a little while first.

Thu, 08/09/2012 - 12:07 | 2691375 malikai
malikai's picture

Can't wait to see Stolper's next bloodbath.

Thu, 08/09/2012 - 12:20 | 2691433 PontifexMaximus
PontifexMaximus's picture

But he still has his job!

Thu, 08/09/2012 - 12:22 | 2691439 malikai
malikai's picture

Just wait until he's Treasury Secretary.

Thu, 08/09/2012 - 12:07 | 2691376 Jlmadyson
Jlmadyson's picture

Saw this earlier this morning.

They took a big fat dump on Italian notes heh.

Euro 1.30 anyone?

Smartest guys in the room alright.

Thu, 08/09/2012 - 12:07 | 2691377 alien-IQ
alien-IQ's picture

How is it even legal to so blatantly lie to clients?

Thu, 08/09/2012 - 12:09 | 2691385 Abraxas
Abraxas's picture

The clients obviously like it. Otherwise they wouldn't be coming back for more.

Thu, 08/09/2012 - 12:10 | 2691392 NotApplicable
NotApplicable's picture

It's not a lie, but rather an opinion.

Thu, 08/09/2012 - 12:36 | 2691476 insanelysane
insanelysane's picture

fine print


I believe their fine print reads something like:  Our clients are our business.  We make money front running our clients but we make more money being on the other side of trades from our clients.   

Thu, 08/09/2012 - 12:09 | 2691391 doc_in_the_house
doc_in_the_house's picture

the muppets deserve it !!

that's bc they have the "safe" illusion..just like madoff's client...what did they have in common with madoff? same race, same religion !! just like the subprime mess, it was mexican mortgage brokers raping mexicans, blacks raping blacks....oh well not my problem !! btw = i steered clear of any home purchases....haven't yet bought my first home...LOL !! waiting for a series of MAJOR drops !!!

spx @ 1399, eur @ 1.227

but, but just minutes ago @ 1407 and 1.233 = STUPID PERFORMANCE CHASERS !!

me = JUST RIDING my spx 1401 avg price shorts and eur SHORTS avg price 1.24

how's that "eur to 1.30" call working out?? you piece of SAC OF FECAL GARBAGE GS !! = me short !!!!! and RIDE !!!!

10 yr treasury toilet paper selling off, its up 7 basis points..and casino spx is NOT being pumped !! i guess the lemmings woke up !!


ok back to watching something more productive than those STUPID PERFORMANCE CHASING CHEERLEADERS, with their "insightful insight" = STUPID REPORTERS from bloomberg and cnbc...back to watching looney tunes and curious george and others.

Thu, 08/09/2012 - 12:17 | 2691419 disabledvet
disabledvet's picture

You forgot to add "KISS MY SHINY METAL ASS." Other than that I'd say spot on.

Thu, 08/09/2012 - 13:16 | 2691579 doc_in_the_house
doc_in_the_house's picture

i'd wait for gold to sub $300/oz

= convert all my monopoly funny money to the meantime, accumulate as much monopoly money = by shorting the pumped up casino, and covering on major sell-offs !

Thu, 08/09/2012 - 12:21 | 2691435 alien-IQ
alien-IQ's picture

dude...really. when the fuck are you going to stop with your ridiculous "performance chaser" (in bold no less) psychobabble?

Nobody is going to sign up for your "picks" for many reasons, not the least of which being that you come across like a complete moron who is coming totally unglued.

take your fucking lithium and give it a fucking rest. PLEASE.

Thu, 08/09/2012 - 13:14 | 2691573 doc_in_the_house
doc_in_the_house's picture

my avg SHORT EUR price = 1.24

(1.2373 last week and 1.2425 early this week)..its now @ SUB 1.23...

STUPID PERFORMANCE CHASERS = MUPPETS, were buying it last week @ 1.244 !!! LOL !!!

Thu, 08/09/2012 - 13:55 | 2691665 Metalredneck
Metalredneck's picture

I for one, would miss his pithy insight and wis...


Sorry.  Even full /sarc is not happening today.

Thu, 08/09/2012 - 12:26 | 2691452 Meesohaawnee
Meesohaawnee's picture

doc go to yahoo finance. thats some serious comedy central there. Get a load of the nesto/mackey clown hour... Oh and they tagged teamed up with bubblevision. Double your pleasure baby

Thu, 08/09/2012 - 12:10 | 2691393 tu-ne-cede-malis
tu-ne-cede-malis's picture

Do as I do, not as I say.  Right?

Thu, 08/09/2012 - 12:46 | 2691510 cougar_w
cougar_w's picture

Wrong. That would ruin everything.

Thu, 08/09/2012 - 12:15 | 2691405 disabledvet
disabledvet's picture

I have a sudden urge to go long media plays. Which side is Berlusconi on this time?

Thu, 08/09/2012 - 12:17 | 2691415 Gadocat99
Gadocat99's picture

Amazing lemming group think.  There must be a steady stream of nouveau riche.

Thu, 08/09/2012 - 12:18 | 2691418 sawman
sawman's picture

Seriously - Impossible to have any sympathy with anyone still following the advice/opinion of this bunch of theives. Remaining clients need to return to their villages before the idiot vacancy is filled.

Thu, 08/09/2012 - 12:20 | 2691432 disabledvet
disabledvet's picture

"Goldman ask." and that is a diiference indeed. What was that thing where the Freak Traders never actually have to take delivery?

Thu, 08/09/2012 - 12:19 | 2691425 firstdivision
firstdivision's picture

why people/companies continue to do business with them is beyond me.

Thu, 08/09/2012 - 12:49 | 2691520 NotApplicable
NotApplicable's picture

Easy, OPM.

If failure is all but guaranteed (which it is in ZIRP World), then what can one do other than take the advice of "the best of the breed."

That way, when you fail, you can point to the fact that "Hey, how could I do any better, if the "experts" are failing too?"

OPM kills the risk/reward equation. Instead of properly judging risks of investments, they judge the risk of being caught outside of the status quo.

Yet another case of "safety" in numbers. In this case, the safety of job security.

Thu, 08/09/2012 - 12:19 | 2691427 bigwavedave
bigwavedave's picture

Seriously. I have ways of taking this firm down. I am not joking. It MIGHT be illegal. I am not so sure.  But I can take them out. It involves magnets. 

Thu, 08/09/2012 - 12:23 | 2691444 DOT
DOT's picture

"Making a market"    The word "make" now means..........

Thu, 08/09/2012 - 12:24 | 2691445 ebworthen
ebworthen's picture

Goldman Sachs and the U.S.S.A. Government:

"Do as we say, not as we do".

Thu, 08/09/2012 - 12:25 | 2691450 mammoth mo
mammoth mo's picture


From the movie Stripes


- I'm gonna fold.
- Okay.

Well, I'm still in.
Cruise, how about you?

Maybe I should fold.

Well, let me see.
Let me see first.

No, not with a hand like that.
Come on.

Dare me. Go on, bluff me.
Come on.

How much should I bet?

If it were me, I'd bet everything.

But that's me. I'm
an aggressive gambler. Mr. Vegas.

Come on. Go for it. Go for it.

Yes, yes, there we go. I'm in.

- What do you got?
- Well, I got a full house.

Three threes and two sixes, that's
a full house. What have you got?

- Two fours, I got an ace.
- You got an ace, an eight and a seven.

Well, you lose. If you would've had
four fours, you would've won.

- You're getting good.
- Starting to get the hang of it.

Isn't this fun? You're pretty good
for a first time, really.

Thu, 08/09/2012 - 12:31 | 2691463 daz
daz's picture

you know... it's the market....


Thu, 08/09/2012 - 12:31 | 2691466 Getting Old Sucks
Getting Old Sucks's picture

See Benny?  Since you took a break from buying everyone's shit........

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