FYI: Lloyd Blankfein is careful about mentioning the word “cyclical” these days.
“Some people think it makes me sound daft,” the chief executive of Goldman Sachs Group
(ticker: GS) told Barron’s in his Manhattan office, which offers a sweeping view of New York Harbor and the Statue of Liberty.
Interest rates and volatility have been so low for so long that what was once abnormal is starting to look normal. How much of this is a cycle and how much is a lasting change?
This is no mere academic matter to Goldman. Its overall financial results have been strong, and three out of four of its main business units are thriving. But the fourth, trading—which lives or dies on volatility and which sealed Goldman’s reputation as the elite firm on Wall Street—has been reduced to crumbs.
The most important part of trading for Goldman is fixed income, currency, and commodities, known as FICC, a unit that Blankfein once ran. Last quarter, it produced just $1 billion in revenue, down 50% from a year ago. During past peaks, it sometimes made four to five times as much.
Regards,
Ted
http://www.cetusnews.com/business/How-Goldman-Sachs-Is-Regaining-Its-Touch.SkUpDuYHf.html
