Goldman Sachs Trading Revenue Breaks Records: Hilarity Does NOT Ensue
Ok, enough is enough. Really.
I equate Goldman Sachs to a rapist who has the audacity to leave a $20 on the garbage can in the alley after he's had his way with you. You kids with me? I certainly hope so.
First we hear that Goldman is on track to pay record bonuses this year after paying off their TARP cash, and now what? Record trading revenue? When does it end? Seriously! I'm almost out of words on this.
Bloomberg:
Goldman Sachs Group Inc. is on track to beat its 2007 trading-revenue record, enabling it to boost compensation by an estimated 64 percent from last year, according to Bank of America Corp. analyst Guy Moszkowski.Incredible. Absolutely incredible.
Goldman Sachs has “unmatched risk-taking/risk-management skills in a market that strongly rewards these because of decline in competitor risk appetite,” Moszkowski wrote in a note to investors today. The New York-based firm “appears on track to accrue significantly more comp than ‘08, despite little change in headcount.”
Six months ago, Goldman Sachs was supported by $10 billion from the U.S. Treasury and relied on government guarantees to issue debt. Moszkowski predicts the company will reap $26.45 billion from trading this year, a gain from $25.36 billion in 2007 when the firm shattered Wall Street profit records.
Moszkowski said the firm will set aside 44.2 percent of total revenue to pay compensation and benefits, letting it pay workers $17.92 billion compared with $10.9 billion last year. Goldman Sachs had 27,898 employees at the end of March. If that number remains unchanged and Moszkowski’s compensation estimate is correct, it would mean an average of $642,447 per employee.
Moszkowski raised his recommendation on Goldman Sachs shares today to “buy” from “neutral” after determining that second-quarter earnings will be higher than analysts expect. Moszkowski increased his estimate for Goldman Sachs’s earnings to $3.90 a share from $2.92. The average estimate of analysts surveyed by Bloomberg was for $3.52 per share.
So who exactly is rewarding Goldman's behavior? Icing traders in the open market with their firehose of doom and somehow this equates to record trading revenues? I don't get it, I just don't get it.
Speechless. Just speechless.
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Tags
Goldman Sachs,
investments,
risk management,
TARP,
trading
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5 comments:
>I don't get it, I just don't get it.
In order to 'get it' you need information to process and analyse.
Everything you read about GS is disinformation, in my humble opinion.
You (and many others) will continue to make incorrect judgements due to the information vacuum you inhabit.
With no blame to accrue to you in any circumstance, of course.
Anon,
Thank you for your analysis of my lack of "getting it" but I think you're missing the point. There is no "disinformation" at work here - how could it be that so many intelligent, analytical individuals are confused at once? Mass delusion? Toxic chemicals in the water? What is your explanation?
Just because I do not analyze the data here does not mean that I don't comb through it regardless. So you'll just have to forgive me for jumping to conclusions based on data that I do not point out that pretty clearly points to something incredibly suspicious at work here.
If you have an alternate explanation that is valid, I would love to hear it. You are certainly entitled to your opinion and I will continue to spew mine.
Jr
>There is no "disinformation"
>at work here - how could it
>be that so many intelligent, >analytical individuals are >confused at once?
>Mass delusion?
Information overload can overwhelm the best analyst. How does one choose from a multiplicity of outcomes? One picks what makes the most sense in their view arrived at throughout their process of analysing what is in front of them.
Unfortunately, when truth is sprinkled with semi-truth and outright lies, one can sometimes congratulate ones' self due to the ability to separate the truth from the lies. But that nagging perception of doubt will be there when the truth and the semi truth is parsed.
I'll have to go back to my tried and true poker analogy here. When I hear that someone is the smartest player alive, my natural skepticism kicks in. When I discover that player is so smart because of an advantage no other player possesses, perhaps an unlimited source of chips when every other player has a finite number, then my respect for that player is zero.
>Just because I do not analyze
>the data here does not mean
>that I don't comb through it >regardless.
That implication was never put forward. No matter what you decide is correct, no blame can ever accrue to you because you are interpreting what is in front of you. You pick what you think is interesting and present it. Nothing wrong with that. Nor was I suggesting any conclusion I have read on this blog was inherently wrong.
If you don't 'get' anything, it's likely because you are inside a system of disinformation designed to ensure that outcome. That's an opinion, based on my own analysis.
And no forgiveness is ever required for those attempting a well intentioned public service.
OTOH, I have long gone past incredulity toward the events I see transpiring. Call it irredeemable skepticism.
Anon,
I truly appreciate the clarification.
Have you ever read Robert Anton Wilson's "Cosmic Trigger" series?
If you are not familiar, when he was dropping boatloads of acid with Timothy Leary in the "good old days" somehow they discovered the power of the number 23 (this is BEFORE the Jim Carrey flick that apparently was supposed to touch on the 23 phenomenon but of course put a typical Hollywood spin on it). We won't get into the number itself but the boys wondered in the moments they were not lost on the acid highway whether the number was truly powerful or if it simply became that by way of looking for it they were able to "create" the illusion of the number appearing everywhere they looked. They never did figure out if it was the power of their minds at work instead of conspiracy of the universe to put this number in their paths over and over.
You are exactly right. One can paint whichever picture they care to paint depending on which rabbit hole(s) they choose to climb down. As you can tell if you've been around here beyond this post (it appears as though you have), I have chosen my path. Coincidentally or not, the Fed keeps setting itself up for criticism and Goldman continues to appear to be almost supernaturally immune to financial malaise. Is my conclusion unnatural? No. You yourself said as much.
I wish there were a way to truly remove the bias but it is both human nature and the way of the universe I suppose.
So I'll stick to my rabbit hole and hopefully do so in a way that is as true to "reality" as possible.
I suppose that is difficult when there are as many "realities" at work as there are people on Earth.
Point being, I like how you think and hope you'll stick around. Perhaps you have an alternate perspective to offer?
Jr
>Point being, I like how you think
>and hope you'll stick around.
>Perhaps you have an alternate
>perspective to offer?
Thanks, I love people who don't take themselves too seriously. They are genuinely more intelligent, too.
The next slow motion train wreck unfolds as we breathe. The salient points as I see them -
1.) Japanese election called Aug 30 and the opposition (who are not fans of treasury paper) are ahead in the polls.
2.) This article made me re-examine my short term view. He seems to imply that another panic is necessary to sell a boatload of treasury debt
http://www.silverbearcafe.com/private/07.09/fright.html
3.) Meredith Whitney shills for GS?
Do they really need the pop in their share price?
No I have never heard of Wilson nor studied any of Leary. Call it a result of too little mind enhancement during the 1970's when this material was more timely.
Regarding bias, we are human and that is likely impossible to eliminate. However, being straight up with your readers, bias becomes a non integral part of the experience.
Your example seems to support my contention about the current financial situation, that we are led by appearances to a conclusion. That conclusion has more or less been determined for us in advance. Some of us will resist training, some of us will sense a part of the reality, but the vast majority will accept what they hear, read and see.
Now, as deputies, whether amateurs or professionals, we need to be able to see past what those whose minds are better trained fail to perceive.
Then we need to inform others so that their minds may join the collective and see what our minds fail to perceive. In that way we can unseat this cabal who has corrupted markets everywhere, and places the whole fabric of our society at extreme risk.
Kudos to this blog, Mike Morgan and ZH. This movement gains traction every day.
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