Seeking Alpha

Goldman eyeing online brokers as trading business disappears?

  • Significant fixed-income cuts could be coming at Goldman Sachs (GS -0.3%) reports Charlie Gasparino, amid the continuing slowdown in business, with details maybe coming when the bank reports Q2 earnings on July 15.
  • Both CEO Lloyd Blankfein and President Gary Cohn come from fixed-income and they've been reluctant to give up on the business, but the full effect of Dodd-Frank regulations are beginning to kick in, and a big change in the bank's business model could be necessary.
  • During the internet boom, Goldman sniffed around E*Trade (ETFC +2.8%) and Schwb (SCHW +1.9%), and some bankers, according to Gasparino, say Goldman may need to take another look at purchasing an online brokerage name.
Comments (10)
  • deercreekvols
    , contributor
    Comments (5137) | Send Message
     
    Did I miss the mention of Goldman Sachs being fined for their lack of control with their "dark pool" trading.

     

    http://on.ft.com/1rUBTzn

     

    The best of the best on Wall Street continue to conduct illegal activities. Will Lloyd Blankfein comment on this? Ever?
    1 Jul, 03:33 PM Reply Like
  • doughave
    , contributor
    Comments (26) | Send Message
     
    ETFC has a $7B+ legacy loan portfolio that is made it through the recession. Since their market cap is just over $6B seems like ETFC is an inexpensive entry into the online space.
    1 Jul, 03:38 PM Reply Like
  • SivBum
    , contributor
    Comments (1572) | Send Message
     
    GS does not venture to online brokerages as part of their charity work. We need to be doubly more vigilant watching those dark pools and their HF clients skimming our 401K/IRAs.
    1 Jul, 03:42 PM Reply Like
  • doughave
    , contributor
    Comments (26) | Send Message
     
    Sivbum,

     

    While HFT seems a bit shady having remember when a stock trade cost $200 and since I only trade at market in large cap shares I really don't see a how HFT is going to bring up a real consumer fraud issue.

     

    I'm wrong every once in awhile and maybe I am at this but just doesn't seem like it's going anywhere.

     

    ETFC getting bought in the 30s is where I am putting my money
    1 Jul, 03:46 PM Reply Like
  • cjluthy
    , contributor
    Comments (7) | Send Message
     
    If you believe that ANYTHING other than technology+competition reduced your $200 trade fee to $7 or so, you would be wrong.

     

    HFT usually actually *INCREASES* fees on normal retail investors due to HFT being able to "shop" around for the largest "liquidity-add" rebate (from the exchange) for a given potential trade. Those rebates are paid with the fees from (slow/dumb/etc..) retail investors.
    1 Jul, 06:44 PM Reply Like
  • doughave
    , contributor
    Comments (26) | Send Message
     
    I don't believe it's going to be a big issue, there may be some more disclosures that you have to agree to as an investor and perhaps you can configure your account to trade at different pools or platforms. It's not a big deal.

     

    The only issue I see that has merit is a technology failure like what damaged Knight or the flash crash. Your typical investor does not trade that much and is not impaired materially.
    1 Jul, 10:03 PM Reply Like
  • Ted Bear
    , contributor
    Comments (573) | Send Message
     
    Didn't GS used to own ARCA, which might have been used as the basis for building an on-line trading business? And didn't they just sell out of the REDI , another electronic trading platform?

     

    Funny how all these banks belong to the FED, whose "free money forever" policies have taken "volatility and trading" out of the equation for the banks in recent years.

     

    Ah...the law of unintended consequences.
    1 Jul, 03:46 PM Reply Like
  • Gedankonomist
    , contributor
    Comments (616) | Send Message
     
    "Funny how all these banks belong to the FED..."

     

    They don't belong to the FED...the FED belongs to them.
    1 Jul, 11:00 PM Reply Like
  • pollyserial
    , contributor
    Comments (1055) | Send Message
     
    Those banks that are "complaining" about low volatility are probably the very ones selling it the hardest.....carry trades, etc etc.

     

    The thing I don't understand about this (IMHO) ill-guided rumor is, trading volumes at online brokerages are also down significantly.

     

    And I honestly don't think even an infinite series of all time highs is going to get small account people "interested" in the stock market again, until they have some discretionary income to put into it, i.e. we need some wage growth.

     

    The economy stinks, and QE is making it worse: wages are down, rents are up, basics cost more, discretionary spending is declining and will decline ever further as long as we continue along this path to make sure all of the "money" belongs to the holders of assets.

     

    ok, rant over! good night to all!
    1 Jul, 11:12 PM Reply Like
  • jjjjmike33076
    , contributor
    Comment (1) | Send Message
     
    You seem to not be very knowledgeable, GS was close to buying SCHW in the early 2000's, have a very close IPO partnership, have a close fixed income relationship, in addition, Chuck and Lloyd are close friends. Check your facts.
    2 Jul, 09:32 AM Reply Like
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