goldman sachs

goldman sachs

Frontrunning: March 7

  • French unemployment rises again to highest since 1999 (Reuters)
  • BoJ rejects call for monetary easing (FT)
  • North Korea threatens pre-emptive nuclear strike against US (Guardian)
  • Firms Race to Raise Cash (WSJ)
  • Time Warner Will Split From Magazine Unit in Third Spinoff (BBG) - slideshows, kittens, "all you need to knows" coming to Time
  • U.S. economy, world's engine, remains in "neutral": Fed's Fisher (Reuters)
  • BOE Keeps QE on Hold as Officials Weigh More Radical Measures (BBG)
  • Jobs start to go as US sequestration cuts in (FT)
  • BofA Times an Options Trade Well  (WSJ)
  • Congress Budget Cuts Damage U.S. Economy Without Aiding Outlook (BBG)
  • Dell’s Crafted LBO Pitch Gets Messy as Investors Circle (BBG)
  • Dell says Icahn opposes go-private deal (Reuters)
  • Portugal Rating Outlook Raised to Stable by S&P on Budget Plan (BBG)
  • China’s Richer-Than-Romney Lawmakers Reveal Reform Challenge (BBG)

Guest Post: Let Them Eat Trinkets

Steven Rattner, investment banker and former member of the Obama Administration, is terrified that under a proposed law companies will be able to raise money without investment bankers: "most troublesome is the legalization of 'crowd funding,' the ability of start-up companies to raise capital from small investors on the Internet..." This is absolutely, classically representative of the technocratic arrogance of the Obama Administration and the investment bankers that inhabit it. Here are three quick thoughts...

Venezuela's Hugo Chavez Is Dead

The most unsurprising news of the day has just hit, and while we have already had some 20+ rumors on this issue previously, this time it is official:

Venezuela's Hugo Chavez has died, says VP Maduro
Chavez who ruled Venezuela since 1999, died from cancer at the age of 58
Venezuela's army chiefs pledge to support President Nicolas Maduro after Hugo Chavez's death
Special deployment of armed forces announced in Venezuela after death of Hugo Chavez

Time to celebrate Hugo's memory with some more currency devaluation? It is unclear if Goldman's record profits on Venezuela exposure (see How The Glorious Socialist Revolution Generated A 681% Return For Goldman Sachs) are about to snap back with a vengeance.

12 Things That Just Happened That Show The Next Wave Of The Economic Collapse Is Almost Here

Are we running out of time?  For the last several years, we have been living in a false bubble of hope that has been fueled by massive amounts of debt and bailout money.  This illusion of economic stability has convinced most people that the great economic crisis of 2008 was just an "aberration" and that now things are back to normal.  Unfortunately, that is not the case at all.  The truth is that the financial crash of 2008 was just the first wave of our economic troubles.  We have not even come close to recovering from that wave, and the next wave of the economic collapse is rapidly approaching.  Our economy is like a giant sand castle that has been built on a foundation of debt and toilet paper currency.  As each wave of the crisis hits us, the solutions that our leaders will present to us will involve even more debt and even more money printing.  And each time, those "solutions" will only make our problems even worse.  Right now, events are unfolding in Europe and in the United States that are pushing us toward the next major crisis moment.  I sincerely hope that we have some more time before the next crisis overwhelms us, but as you will see, time is rapidly running out. The following are 12 things that just happened that show the next wave of the economic collapse is almost here...

So You Want To Short The Student Loan Bubble? Now You Can

Even as the gargantuan $1+ trillion student debt load has been the bubbly elephant in the room that few are still willing to talk about, there have been until now zero opportunities for a the proverbial highly convex "ABX" short in the student debt space. This of course is the trade that was put on by those who sensed the subprime bubble is about to pop in early/mid 2007 and made billions as the yield chasers were summarily punished one by one as first New Century blew up, and then everyone else. Yet while one was able to buy synthetic "hedge" exposure with limited downside and unlimited upside (by shorting synthetic index spreads) in subprime, so far the only way to be bearish on student debt has been to short the equity of various private sector lenders - a trade with very limited upside and unlimited downside, and which in the current idiotic New Normal is more likely to leave one insolvent and crushed in a smoldering heap of margin calls following yet another epic short squeeze as GETCO's stop hunting algo run amok. This may be about to change. As WSJ reports, SecondMarket Holdings, the private-market securities trading firm best known for allowing numerous overzealous fans to buy FaceBook at moronic valuations, on Monday "will roll out a platform allowing lenders to issue securities backed by student loans directly to investors." 

Frontrunning: March 1

  • US braced as cuts deadline passes (FT)
  • U.S. stares down start of steep "automatic" budget cuts (Reuters)
  • Yeltsin-Era Tycoons Sell Resources for Distance From Kremlin (BBG)
  • Italy's center-left leader rules out coalition with Berlusconi (Reuters)
  • Apple Required Executives to Hold Triple Their Salary in Stock (WSJ)
  • BOJ Seen Spiking Punchbowl in April Under New Chief Kuroda (BBG)
  • Diplomatic fallout from EU bonus cap (FT)
  • Italy’s Stalemate Jeopardizes Resolution of Crisis, Finland Says (BBG)
  • Chinese trader accused of busting Iran missile embargo (Reuters)
  • JPMorgan No. 1 Investment Bank Amid a Flurry of New Deals (BBG)
  • Eurotunnel’s Ferry Strategy at Risk as Rivals Cry Foul (BBG)
  • Telepathic rats team up across continents (FT)

Bank Deposits Decline Across Europe In January

There was much press coverage of the December jump in European bank deposits: a veritable litany of pundits said that it was an indication of the recovery in the European financial system, how faith in the banking system is coming back, and that European consumers are so wealthy they actually have excess cash they can deposit at their bank. Perhaps it is not very surprising, then, that we have yet to hear a peep about the fact that overnight the ECB reported that deposits at all key core and peripheral European countries declined. Wait, we know: "it's seasonal."

Gold And Silver Inverse Slamdown

It would appear that someone tripped and flipped the algo switch this morning as the ubiquitous morning slamdown has morphed into a take-off. Perhaps it is no coincidence that every Muppet's favorite banker (cough Goldman Sachs cough) opined on Gold's coming weakness yesterday and that hedge funds are the least exposed to the precious metals on record, which as everyone BUT Goldman knows, is the traditional signal that it is a time to buy. Actually we take that back: Goldman certainly knew it, which is why it has been urgently advising its clients to sell... To Goldman.

Frontrunning: February 26

  • Italy Political Vacuum to Extend for Weeks as Bargaining Begins (BBG)
  • Italian impasse rekindles eurozone jitters (FT)
  • On Spending Cuts, the Focus Shifts to How, Not If (WSJ)
  • Obama spending cuts strategy focused on waiting game (Reuters)
  • BOE’s Tucker Says He’s Open to Expanding Asset-Purchase Program (BBG)
  • Fed Faces Explaining Billion-Dollar Losses in Stress of QE3 Exit (BBG)
  • Carney warns over lack of trust in banks (FT) - here's a solution: moar bank bailouts!
  • Bundesbank tells France to stick to budget (FT)
  • China to tighten shadow banking rules (FT)
  • Saudis Step Up Help for Rebels in Syria With Croatian Arms (NYT)
  • After election win, Anastasiades faces Cyprus bailout quagmire (Reuters)
  • Just for the headline: Singapore’s Darwinian Budget Sparks Employer Ire (BBG)

Is This The Chart That Everyone Is Concerned About?

We have seen this all before... it's never different this time. Of course, you should buy the dip; you invest for the long-term, right? VIX, schmix; Credit, schmedit; Gas prices, schmices; Macro, schmacro...

Goldman Managing Director Snagged In Insider Trading Probe Leaves Firm

With the entire world, and certainly GETCO's ES and EURUSD algos, focused on every single update out of the Italian Senate race, which now appears certain to not bring the necessary 158 seats to the Bersani-Monti coalition leading to a chaotic revote in the coming months, here is some tangential news of the "who could have ever seen this coming variety." Following last week's Heinz insider trading probe, which implicated a Goldman Sachs account in Zurich belonging to some private wealth client, who was so anonymous not even Goldman knows who it belonged to, we now learn that yet another Goldman employee has just left the company in a totally separate insider trading probe.

"No Rotation" - Fund Flows Lag Returns, Not Lead

There is a simple reason why the real money (as opposed to fast money tweakers) has been far less excited about the domestic equity fund inflows than the financial media and their sponsoring commission-takers would suggest. The reason is - as Goldman shows empirically, not anecdotally - fund flows 'lag' performance, 'not lead'! As we have noted previously, the great rotation myth is simply that - a unicorn-like belief that the investing public will sell down their bond portfolios (high-yield, investment-grade, and sovereign) to stake their future on stocks - when the reality is the flows (which are not rotating to stocks 'net' anyway) simply reflect the sheep-like herding of performance-chasing index-huggers hoping to beat the greater fool. There always has to be someone left holding the bag...