goldman sachs

goldman sachs

Goldman Warns 67% Odds Of A 10% Market Decline In Next Year

While quick to explain how next year will be better (even though he keeps his year-end 1900 target for the S&P 500), Goldman's chief US equity strategist David Kostin warns there is a good chance of a 10% drop sometime in the next 12 months. The recent 6% pullback (sparked by EM concerns) is only one-third of typical historical corrections and as Kostin notes, the market has gone way too long without a so-called correction (10% from peak to trough). It's been 22 months (and 50% gains) since the last 10% drop and, based on Kostin's quant work, there is a 67% probability that we'll see that correction - which would take the S&P to around 1700.

Frontrunning: April 9

  • Top Medicare Doctor Paid $21 Million in 2012, Data Shows (BBG)
  • Separatists build barricades in east Ukraine, Kiev warns of force (Reuters)
  • Greece launches sale of five-year bond (FT)
  • High-Frequency Trader Malyshev Mulls Accepting Outside Investors (BBG)
  • U.S. defense chief gets earful as China visit exposes tensions (Reuters)
  • GM Workers Who Built Defective Cars Fret About Recall (BBG)
  • Kerry, Congress Agree: Superpower Status Not What It Was (BBG)
  • Crimeans Homeless in Ukraine Seek Solace in Kiev Asylums (BBG)
  • JPMorgan's Dimon says U.S. banks healthy, Europe lagging (Reuters)

Triple Whammy Shocker: Goldman Shutting Down Sigma X?

Back on March 21, before the release of Michael Lewis' Flash Boys and before the infamous 60 Minutes interview, when Goldman COO Gary Cohn wrote his infamous WSJ Op-ed bashing HFT, it was clear that something was afoot. That something became promptly clear when it was revealed that Goldman is among the core backers of the pseudo dark-pool IEX exchange popularized as the protagonist in Flash Boys, and juxtaposed to the frontrunning, and faceless, HFT antagonist that Lewis maanged to demonize so well in the span of a few hundred pages, he promptly provoked a renewed investigation by the FBI, the SEC and DOJ into HFT. A few days later, the shocker became a double whammy when Goldman announced that in addition to turning its back on HFT which had served it so well for years, the firm would also say goodbye to the NYSE and its designated market maker post, the last remaining legacy of its $6.5 billion Spear Ledds & Kellogg acquisition from 2000. Moments ago we got the third and final "shocker" in this series of stunning disclosures by Goldman, this time involving Goldman's own "unlit" venue - one involving its own Dark Pool - the infamous, and market dominant Sigma X, which according to the WSJ, is about to be shut down!

Retiring SEC Lawyer Crucifies His Employer: "It's A Cancer" Working On Behalf Of The "Bankster Turnpike"

We wonder: why does the truth about the broken system, as witnessed and experienced by individual employees, always wait until said employee is about to depart their employer or just after? Obviously that is rhetorical. However, it is worth mentioning, because in the latest such revelation, a retiring SEC trail attorney veteran, James Kidney, who had been with the agency since 1986 and retired this month, just crucified his now former employer for doing precisely all those thing that outside critics - notably Zero Hedge - have accused the most coopted, clueless, corrupt and criminal regulators of doing. Only he said it in a way that not even we could have phrased. The SEC has become “an agency that polices the broken windows on the street level and rarely goes to the penthouse floors,” Kidney said, according to a copy of his remarks obtained by Bloomberg News. “On the rare occasions when enforcement does go to the penthouse, good manners are paramount. Tough enforcement, risky enforcement, is subject to extensive negotiation and weakening.”

High Frequency Trading: All You Need To Know

In the aftermath of Michael Lewis' book "Flash Boys" there has been a renewed surge in interest in High Frequency Trading. Alas, much of it is conflicted, biased, overly technical or simply wrong. And since we can't assume that all those interested have been followed our 5 year of coverage of a topic that finally has earned its day in the public spotlight, below is a simple summary for everyone.

 

As The Hedge Fund Slaughter Continues, Here Is Who Is Unwinding And What Stocks To Watch

The hedge fund slaughter continued for a second week in a row, and now we know at least one of the parties that was liquidating - curious which hedge fund is unwinding (the first of many)? Here is the answer: "On an investor call Thursday, Mr. Citrone said Discovery had reduced the amount of risk it was taking and that he remained confident that U.S. growth was accelerating." More importantly, for those curious where the pain will continue to be focused as the HF unwind accelerates, here are the most held long hedge fund positions which if indeed the unwind has begun, will be slaughtered in the coming days.

All The Presidents' Bankers: The Hidden Alliances That Drive American Power

"The global financial landscape was evolving. Ever since World War II, US bankers hadn’t worried too much about their supremacy being challenged by other international banks, which were still playing catch-up in terms of deposits, loans, and global customers. But by now the international banks had moved beyond postwar reconstructive pain and gained significant ground by trading with Cold War enemies of the United States. They were, in short, cutting into the global market that the US bankers had dominated by extending themselves into areas in which the US bankers were absent for US policy reasons. There was no such thing as “enough” of a market share in this game. As a result, US bankers had to take a longer, harder look at the “shackles” hampering their growth. To remain globally competitive, among other things, bankers sought to shatter post-Depression legislative barriers like Glass-Steagall. They wielded fear coated in shades of nationalism as a weapon: if US bankers became less competitive, then by extension the United States would become less powerful. The competition argument would remain dominant on Wall Street and in Washington for nearly three decades, until the separation of speculative and commercial banking that had been invoked by the Glass-Steagall Act would be no more."

ECB "Models" €1 Trillion QE

Update: in direct flashback from the summer of 2011 when the ECB leaked news only to retract it within minutes, this just happened: CONSTANCIO: DOESN'T KNOW ABOUT 1 TLN-EURO QE MODEL REPORT

When in desperate need to crush your currency (being bought hand over fist by the Chinese), so urgently need to boost German exports, since you are unable to actually do QE as per your charter, what do you do if you are Mario Draghi? Well, you leak, leak, leak that you are contemplating QE, and then you leak some more. Such as today.

  • ECB HAS MODELED BOND PURCHASES UP TO 1 TLN EUROS, FAZ SAYS
  • ECB TESTS SHOW INFLATION COULD BE BOOSTED 0.2% TO 0.8%: FAZ

Like US inflation soared on the $1 trillion QEternity? Can't wait. In other news, expect zero reaction from gold on this latest news that another $1.4 trillion in fiat is about to flood the market. If only inbetween Mario Draghi's jaw bones.

Equity Futures Levitate In Anticipation Ahead Of "Spring Renaissance" Payrolls

Today’s nonfarm payrolls release is expected to show a "spring" renaissance of labor market activity that was weighed on by "adverse weather" during the winter months (Exp. 200K, range low 150K - high 275K, Prev. 175K). Markets have been fairly lackluster overnight ahead of non-farm payrolls with volumes generally on the low side. The USD and USTs are fairly steady and there are some subdued moves the Nikkei (-0.1%) and HSCEI (+0.1%). S&P500 futures are up modestly, just over 0.1%, courtesy of the traditional overnight, low volume levitation. In China, the banking regulator is reported to have issued a guideline in March to commercial banks, requiring them to better manage outstanding non-performing loans this year. Peripheral EU bonds continued to benefit from dovish ECB threats at the expense of core EU paper, with Bunds under pressure since the open, while stocks in Europe advanced on prospect of more easing (Eurostoxx 50 +0.14%). And in a confirmation how broken centrally-planned markets are, Italian 2 Year bonds high a record low yield, while Spanish 5 Year bonds yield dropped below US for the first time since 2007... or the last time the credit risk was priced to perfection.

Payrolls Preview: If Lavorgna Is Right, Citi Fears Asset Markets Will React Badly

Goldman Sachs forecasts a 200k increase in non-farm payrolls for March - in line with consensus - and believe last month's 175k print supports the ongoing positive trend (in light of the weather effect). Key employment indicators looked mixed-to-better in March, and despite the continued cold temperatures, less extreme weather conditions overall should give an additional boost to job gains this month. Citi suggests the weather could have knocked 172k off payrolls overall from Dec to Jan and are more hopeful, expecting a 240k print. Their biggest fear, a greater than 275k print (which is the high bar that Joe Lavorgna has set) could see asset markets reacting badly (on the basis of quicker Fed tightening).

 

23 Applicants For Every Open Analyst Position At Goldman Sachs

From Goldman's just released annual shareholder letter:

The quality and breadth of our client franchise are a direct by-product of our ability to attract and retain high-caliber professionals. As an investment bank, our main asset is our people and the advice and solutions that they provide to our clients. Great people build great relationships. And, we are fortunate to have a diverse group of young people from around the world who continue to view Goldman Sachs as a great place to begin and sustain their careers. For our latest analyst class, more than 43,000 candidates applied for 1,900 positions. We accepted about four percent of those applicants and of those receiving offers, more than 80 percent accepted.

Or a lower acceptance ratio than Harvard with 23 applicants for every open position. Something tells us the hourly wage offered at Goldman is higher than that for line cooks, or for anesthesiologists for that matter.