Goldman Sachs

Frontrunning: July 17

  • Bernanke Seeks to Divorce QE Tapering From Interest Rates (BBG)
  • China launches crackdown on pharmaceutical sector (Reuters)
  • Barclays, Traders Fined $487.9 Million by U.S. Regulator (BBG) - or a few days profit
  • Barclays to fight $453 million power fine in U.S. court (Reuters)
  • When an IPO fails, raise money privately: Ally Said to Weigh Raising $1 Billion to Pass Fed Stress Tests (BBG)
  • Bank of England signals retreat from quantitative easing (FT) ... Let's refresh on this headline in 6 months, shall we.
  • Russia's Putin puts U.S. ties above Snowden (Reuters)
  • Smartphone Upgrades Slow as 'Wow' Factor Fades (WSJ)
  • Snowden could leave Moscow airport in next few days (FT)
  • New Egypt government may promote welfare, not economic reform (Reuters)

Where Markets Stand Ahead Of Bernanke

Bernanke today testifies on monetary policy before the House Financial Services Committee (formerly the Humphrey-Hawkins). The testimony will be released at 8:30 am NY with Q&A after his testimony. Tomorrow he testifies before the Senate Banking Committee but the prepared remarks are the same for both days. Indeed it’s likely that the Q&A will be where all the fun starts. As DB says, he will likely try to pull off the trick of continuing to prepare the groundwork for tapering but try to give bond markets something to help them fight off the pressure of higher yields. With no post-meeting press conference planned for the July 30th/31st FOMC, and Bernanke not scheduled to speak publicly until he appears at the Global Education Forum event on August 7th, this week’s testimony may well be the only remarks we hear directly from the chairman for some weeks.

Goldman's 5 Questions For Bernanke

Fed Chairman Ben Bernanke will deliver his final semi-annual monetary policy report to Congress tomorrow (July 17), followed by questions from lawmakers. Goldman expects him to strike a similar tone to his comments at last week's NBER conference - "moar of the same." The prepared testimony (released unprecedentedly early at 0830ET) is likely to be uneventful, but here are the five key questions which he would probably cover mostly during the more interesting Q&A part of the testimony.

Pivotfarm's picture

As the trial of Fabulous Fab gets under way in Manhattan, there is someone that will be hearing the clinking of champagne glasses as they celebrate the doubling in profits of the rogue ( well, we love a scapegoat in the story, even though we all know it can’t be true) trader’s former employer, Goldman Sachs.

How RINs Became Gasoline's Four-Letter Word

As the EPA’s RFS mandate has surpassed the industry standard of E10, the demand for RINs has likely increased as refiners/blenders need to show compliance with the RFS mandate to the EPA. This is reflected in ethanol RIN prices, which have surged to the highest levels since the peak in March earlier this year. Higher RIN prices could dissuade refiners from producing finished gasoline, and instead, would incentivize them to send more of the gasoline internationally to minimize their gasoline production with mandated RIN compliance. This gasoline would likely be sent as motor gasoline blending components, which includes RBOB. In theory, this could also help tighten the US gasoline market, however, there are limited markets for this gasoline, so unless it is pricing at a significant discount to world prices, it may be difficult to push this gasoline out of the US market without sufficient demand pull.

Tesla Plunges As Goldman Coils Around $84 Price Target

What goes up appears to come down faster. Thanks, apparently, to a well-timed Goldman Sachs suggestion that the heavily-shorted (28.4% of float) electric-car maker is over-priced (whocouldanode at 303% YTD gains), the shares are down 14.5% today on massive volume (-18% from yesterday's highs) but still notably above Patrick Archambault's $84 target.

Italy's First Black Minister Greeted With "Nooses On Lampposts"

While the US has had its share of race-related social issues in recent days, nothing compares to Italy where not only was the country's first black minister (of integration!) of Congolese origin, Cecile Kyenge, compared to an orangutan two days ago by Roberto Calderoli, vice president of Italy's Senate and a senior parliamentarian in the anti-immigration Northern League, but following a visit to the city of Pescara she was met with a "protest" where nooses were hung from lammposts. And just so the message was not lost, "he nooses appeared on lampposts with posters signed by far-right group Forza Nuova: "Immigration, the noose of the people!" read one of the slogans on the posters. Another said: "Everyone should live in their own country." Nothing like Italy, whose economy has been ravaged by the worst depression in decades, developing its own Golden Dawn movement to really help with integration issues and globalized worker mobility.

Frontrunning: July 16

  • India Joins Brazil to China in Efforts to Tighten Liquidity (BBG)
  • Seven dead as police and protesters clash in Egypt (Reuters)
  • U.S. senators fail to cut deal, head for showdown on filibuster (Reuters)
  • Gasoline Tankers Beating Crude for First Time on Record (BBG)
  • Smithfield's China bidders plan Hong Kong IPO after deal (Reuters)
  • Bitcoin ETF plan struggles to find support (FT)
  • Big Home Builders Gobble Up Rivals Starved for Cash (WSJ)
  • Putin wants Snowden to go, but asylum not ruled out (Reuters)
  • Zimmerman's lawyer calls prosecutors 'disgrace' to profession (Reuters)
  • McDonald’s to bring Big Mac to Vietnam (FT)
  • Korean Pilots Avoided Manual Flying, Former Trainers Say (BBG)

Stocks Maintain Zero Volume Hover Mode Ahead Of Bernanke Speech

Fear not US: with a Q2 GDP of under 1% now all but assured, and with all economic data reporting now a global bizarro day farce, you will have a chance to take the torch from Europe in the ugliest girl category, and push the S&P to a new record intraday high today following what should be assured epic misses in the Industrial Production print (exp. +0.3%), Cap Utilization and the NAHB housing market index which is set to tumble now that any retail demand for housing was promptly killed following the recent spike in rates. In addition to a relatively lite economic docket, we get the all systematically important hedge fund, Goldman Sachs, reporting which is expected to announce a 21% q/q drop in revenues, led by lower gains in Investment Lending (i.e. prop), offset by 12% drop in operating expenses. Of course, nothing fundamental actually matters as markets continue to be on ultra low-volume, "drift higher" autopilot until tomorrow's Ben Bernanke semi-annual muppet show  in Congress, when he is expected to refill the hopium trough once more and finally send the S&P above 1700 on central planning.

Pivotfarm's picture

Fabulous Fab (Fabrice Tourre)

Former Goldman Sachs trader Fabrice Tourre goes on trial this week, accused by the Securities and Exchange Commission of willingly misleading investors while he was vice-president of the bank.

Frontrunning: July 15

  • An actual Bloomberg headline: Granny’s Gold Bars Are Key to Vietnam Push to Boost Dong (BBG)
  • Gay delivers further body blow to troubled sport (Reuters)
  • China Wealth Eludes Foreigners as Stocks Earn 1% in 20 Years (BBG)
  • Bernanke Boom Signaled by Yield Surge as Market Recalculates (BBG)
  • Portugal's Parties Set Deadline for Pact (WSJ)
  • Corporate Spending Set to Surge in U.S. (BBG)... or not at all based on the actual corporate data
  • Legal Fears Slowed Aid to Syrian Rebels (WSJ)
  • A mega-camp adds to the Boy Scouts’ troubles (Reuters)
  • GSK accused of being ‘ringleader’ in China probe (FT)
  • 19 Hospitalized in US-Ukraine Army Exercise - Ministry (RIA)
  • Egypt Islamists march as senior U.S. official visits (Reuters)
  • German spies made use of U.S. surveillance data (Reuters)

10 Reasons Why Sharknado Is Coming To The Global Economy

Have you ever seen a disaster movie that is so bad that it is actually good? Unfortunately, we are witnessing something just as ridiculous in the real world right now.  In the United States, the mainstream media is breathlessly proclaiming that the U.S. economy is in great shape because job growth is "accelerating" (even though we actually lost 240,000 full-time jobs last month) and because the U.S. stock market set new all-time highs this week.  The mainstream media seems to be absolutely oblivious to all of the financial storm clouds that are gathering on the horizon.  The conditions for a "perfect storm" are rapidly developing, and by the time this is all over we may be wishing that flying sharks were all that we had to deal with.