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The Rules Are Changing
Come on, how could that be? Their boss does say that banks "Do God's work." I'm not sure that is a sufficient explanation. When a firm's trading performance challenges not only all preconceptions of realistic trading, but also of statistical distributions, it's worth looking into.
Here's what ZeroHedge has to say about it. Here is a chart that demonstrates Goldman's YTD trading track record: out of 194 trading days in 2009, the firm has made over $100 million on 116 occasions! This alone accounts for at least $11.6 billion in revenue (and is likely much more).
Yves Smith, at Naked Capitalism, adds: maybe I am just hopelessly out of touch, or perhaps more accurately, the Fed has created such a ridiculously favorable environment for banks and traders that if you are moderately competent, making money is like shooting fish in a barrel. But a winning streak this consistent looks like a rigged game. Is this just, ahem, “information advantages”? Greater ease in pushing markets around that have fewer players? Just a function of those monstrously wide bid-asked spreads? I’m curious for a sanity check from people closer to the action.The party line comes in the Financial Times:
There is a suggestion here that banks like Goldman might be taking advantage of the Fed and Treasury (although that might be by design, yet another hidden subsidy).
Let me know what you think about this.
Here is a how there stock is doing.
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Here is a link to a prior Goldman Sachs article worth checking-out.
Posted by Howard Getson at 03:32 AM in Business, Current Affairs, Market Commentary, Trading | Permalink