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Jun. 3, 2015, 12:36 PM
- “A clear separation has emerged between the biggest brokers and the rest of the market,” says Jay Bennett of Greenwich Associates. A survey by his firm finds the top four U.S. equity brokers - Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), and Morgan Stanley (NYSE:MS) - are widening their market share lead over the rest of the industry.
- According to Greenwich, all had more than an 8% share of trading, with number five Credit Suisse (NYSE:CS) at 6.9%.
- Bennett calls it a segmented market composed of the big four, the rest of the bulge bracket, and a long tail of competitors with relatively smaller shares.
- ETFs: IAI, KCE, KBWC
Jun. 2, 2015, 3:56 PM
- For years, and as competitors were scaling back, Goldman's (GS -0.8%) top brass have argued the trading business was in a "cyclical" not "secular" lull, and - presenting today at a Deutsche financial services conference - COO Gary Cohn says recent results show they've been right all along.
- Presentation slides and webcast
- "We can grow revenue infinitely," says Cohn. "You wouldn't like the (ROE) effect of it, but we could grow revenue. We've consciously chosen to grow accretive revenue - and that's hard."
- Revenue from FICC has risen by 2.6 times on average in recent quarters when volatility spiked, according to Goldman's presentation.
- Also on stage was CFO Harvey Schwartz. The two were asked whether they are satisfied with Goldman's business mix. Cohn: "I like our business mix. You like our business mix?" Schwartz: "I like it, yeah." Cohn: "We like it." Schwartz: "I feel good about it, man."
- Source: Reuters
May 26, 2015, 8:37 PM
- With attention already starting to shift to regulatory approval, Charter Communications (CHTR +2.5%) CEO Tom Rutledge says his company's $55B acquisition of Time Warner Cable (TWC +7.3%) will do better with the FCC than Comcast's: Think small.
- "If you look at the ecosystem, who we're playing with in terms of other competitors, they're very large, and we'll still be a relatively small company compared to the large phone companies, compared to Comcast, compared to the wireless companies," he told CNBC.
- Charter's simultaneous deal for Bright House Networks may pump up its own leverage, but it was critical to the TWC bid, says analyst Craig Moffett: Virtually debt-free Bright House and its borrowing capacity likely added as much as $18/share to Charter's $195.71/share offer. Moffett says TWC's handling of Altice's (OTC:ATCEY) counter-play was masterful.
- About that debt: TWC bondholders are still nervous about the combined load (While the firm's 30-year bonds rose 11.7% today, they're still down about 16% from last month). Moody's is likely to push TWC into junk rating territory as debt-to-EBITDA rises from TWC's 2.97 to about 4.79 for the combination. But again, Bright House's addition and "conservative voice on the board" may be mitigating the effects.
- And MoneyBeat's deal tally: Aside from big winner TWC, winners include Goldman Sachs (NYSE:GS), (eventually) rewarded for backing Charter, and UBS, working as sole adviser to Bright House; Losers include Comcast backer JPMorgan Chase (NYSE:JPM), and Deutsche Bank (DB -3.4%) -- a Charter backer back when, but unseen in the new deal.
- Previously: Charter to merge with Time Warner Cable, buy Bright House (May. 26 2015)
May 26, 2015, 11:30 AM
- Keep your friends close and your enemies closer? Goldman Sachs' (GS -0.7%) new vice president in the bank's compliance, supervision, and strategy group is FBI veteran Patrick Carroll. During Carroll's near 25-year career at the FBI, he oversaw the Bernie Madoff investigation, and helped pioneer the use of wiretaps which yielded dozens of insider trading convictions (including a leading role in the Raj Rajaratnam prosecution).
- “It’s really about how Goldman is reacting to the tidal wave of litigation that now seems to be part of the ongoing government toolkit for regulating banks," says NYU professor Roy Smith. “It can help to have some people who know how government prosecutors and investigators think, some guy who has the mindset of an alligator.”
- Source: Bloomberg
May 22, 2015, 12:10 PM
- Welcome back my friends to the show that never ends ...The New York Department of Financial Services is probing more abuse of forex markets by the banks - this time by the use of automated trades driven by computer algorithms, reports the FT.
- Findings could indicate more widespread abuse than what U.S. and U.K. authorities disclosed on Wednesday (along with nearly $6B in fines and a number of guilty pleas). Sources remind that this week's charges related to manipulation performed by bank employees, but this probe covers electronic trading, which accounts for the majority of forex transactions.
- Trading platforms under the scope include those from Barclays (NYSE:BCS) and Deutsche Bank (NYSE:DB), and information has been subpoenaed from BNP Paribas (OTCPK:BNPQF), Credit Suisse (NYSE:CS), Goldman Sachs (NYSE:GS), and SocGen (OTCPK:SCGLY).
- The investigation into Barclays is the most advanced, but DFS has initially reached similar nefarious conclusions about the goings-on at Deutsche too. The probes of the other lenders are at even earlier stages.
- Previously: Lawsky stepping down as New York's top bank regulator (May 20)
May 21, 2015, 10:09 AM
- It was two years ago when Goldman Sachs (NYSE:GS) for the first time moved its annual meeting out of the NYC area, holding it in Salt Lake City to highlight one of the few areas in the country where it was adding, rather than cutting stuff.
- Today - looking to bolster its image in the red-hot tech sector - the bank is holding its annual meeting in San Francisco. CEO Blankfein is fond of saying Goldman is more a tech company than a blue-chip investment bank. In just the past few weeks, Goldman has hired an executive to build a digital lending platform, co-led a $50M investment in a bitcoin startup, and launched a podcast called "Exchanges at Goldman" in which Goldmanites talk about tech on Wall Street, among other things.
- Annual meeting webcast staring at 11:30 ET.
May 15, 2015, 2:42 PM
- Any talks between Charter Communications (NASDAQ:CHTR) and Time Warner Cable (NYSE:TWC) about a merger may be up in the air, but bankers won't be the bottleneck, as they're ready to talk about $25B or even more to make it happen.
- Following previous reports that Charter could go for $25B-$30B in debt, the cableco is talking with the same four bankers that committed $24B to Charter's early-2014 bid: Bank of America Merrill Lynch (NYSE:BAC), Credit Suisse (NYSE:CS), Deutsche Bank (NYSE:DB) and Goldman Sachs (NYSE:GS).
- As one banker noted, "it should be quick to move to next steps, as the banks know the company pretty well," and said the package should end up as two-thirds bonds.
- Aside from any regulatory issues, leverage seems to be foremost on the mind of dealmakers (and investors). Liberty Broadband's (NASDAQ:LBRDA) Greg Maffei has gone public with the notion that Liberty could raise capital through rights offerings or tap $700M in cash to help with funding while maintaining its 25% stake in Charter.
- Other banks could join in too, which could make such a deal one of the largest junk bonds ever. Time Warner's on the edge of junk status, rated BBB/Baa2 by S&P and Moody's.
May 5, 2015, 3:03 PM
- "Reasonably possible" legal expenses could be as high as $3.8B, says Goldman Sachs (GS -1.2%) in its 10-Q today. That number - it was $3B in February and $2.5B in November - is meant to track potential losses above what's already in legal reserves.
- What it doesn't include are possible losses rom future claims from continuing investigations.
- As for potential energy-related losses, Goldman slashed its credit exposure to $9.9B from $12.6B, while possible market losses fell to $300M from $805M.
May 5, 2015, 11:22 AM
- Goldman Sachs (NYSE:GS) gets closer to its entry into the $2T ETF business, naming tickers for six "ActiveBeta" stock ETFs and five ETFs allowing exposure to hedge fund styles.
- Goldman Sachs ActiveBeta Emerging Markets (GEM), Europe (GSEU), International (GSIE), Japan (GSJY), U.S. Large Cap (GSLC), U.S. Small Cap (GSSC).
- Goldman Sachs Equity Long Short Hedge Tracker (GSLS), Event Driven (GSED), Macro (GSMC), Multi-Strategy (GSMS), Relative Value (GSRV).
- Source: Barron's
May 4, 2015, 7:24 AM
- The exit (at a loss) from a Colombian gold mine which has been nothing but trouble - coming after sales of power plants and an aluminum-storage business - would mark the end of Goldman Sach's (NYSE:GS) involvement in raw material production, reports the WSJ.
- Alongside the losses, of course, is D.C.'s fixation on bank risk, not to mention the potential conflicts of interest arising from banks producing commodities along with making markets to trade them.
May 1, 2015, 9:54 PM
- With plans (but not detailed plans, yet) to go public, Spanish-language broadcaster Univision swung to a $139.7M net loss in Q1, from a year-ago profit of $6.2M.
- The company hired Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS) and Deutsche Bank (NYSE:DB) to lead an IPO that it hopes will raise $1B, which would value the broadcaster around $20B.
- Revenues were up 0.6% to $624.7M. Univision blamed its loss on termination fees that it owed to the private-equity owners of its parent, Univision Communications, as well as to Grupo Televisa (NYSE:TV).
- Televisa used convertible debt to build a 38% stake in Univision and has the right to take that to 40%, so it is set to draw a payoff from Univision's eventual offering. It also drew a record $314M rebroadcasting royalty from Univision in 2014.
Apr. 24, 2015, 9:15 AM
- Comcast (NASDAQ:CMCSA) is trading up 1.3% premarket, and Time Warner Cable (NYSE:TWC) is 0.8% higher as well, after confirmation that their $45B merger deal is dead.
- In statements by the Justice Dept. and FCC thanking each other for their cooperation, it's clear that FCC Chairman Tom Wheeler was against the deal, which would have made agency approval a very long shot.
- It's also clear why Wheeler was opposed: It's about broadband, not cable, and protecting the burgeoning streaming video market. "The proposed merger would have posed an unacceptable risk to competition and innovation especially given the growing importance of high-speed broadband to online video and innovative new services."
- While Comcast doesn't pay a breakup fee with the deal's end, that doesn't mean everyone walks away cheaply: Advisers including bankers and lawyers will lose out on $380M in fees, chiefly Goldman Sachs (NYSE:GS), banker for Charter Communications (NASDAQ:CHTR). J.P. Morgan Chase (NYSE:JPM) will drop from second to third in the league tables. As a mitigating factor, more deals are likely on the way, though.
- Other sector players premarket: AT&T -0.3%; Verizon -0.2%.
Apr. 23, 2015, 1:25 PM
- The asset management arm of Goldman Sachs (NYSE:GS) looks to boost its investment outsourcing solutions business with the purchase of Pacific Global Advisors, a subsidiary of Pacific Life Insurance. PGA's solutions business has assets under supervision of more than $18B.
- As part of the deal, key members of PGA's management team will join GSAM, and the deal should close by mid-year.
Apr. 21, 2015, 12:04 PM
- Perseus is among a small number of companies providing high-frequency trading firms with the networks necessary to operate by transmitting data between exchanges using microwave towers.
- The company now also counts gaming and media companies, exchange operators, and banks among its clientele, and Goldman's (NYSE:GS) $20.5M investment will help accelerate a rollout of services to 25 new locations.
Apr. 17, 2015, 10:03 AM
- Noting the strong run for the stock headed into Q1 results, analyst Brian Kleinhanzl says he didn't see anything in the report which would warrant boosting 2016 estimates materially higher.
- "We do not believe that a larger premium to forward book value is warranted at this time since the volatility of Goldman's (GS -1.2%) earnings is still high and visibility into forward earnings [is] low."
- The rating is cut to Market Perform from Outperform, though the price target is boosted to $210 from $195.
- The stock advanced 5.3% in the two weeks headed into yesterday's earnings release, and is up 11% over the last three months.
- Previously: Goldman call: Will strong trends continue? (April 16)
- Previously: Goldman up 1% early after earnings beat (April 16)
Apr. 17, 2015, 2:50 AM
- Goldman Sachs' (NYSE:GS) blockbuster performance in stock trading last quarter has some Wall Street watchers speculating whether it beat rival Morgan Stanley (NYSE:MS) out of the top spot in equities.
- Goldman was head-and-shoulders above Morgan Stanley for many years in stock trading, but recently the latter gained ground: Morgan Stanley's 2014 stock-trading revenue surpassed Goldman's for the first time in at least a decade.
- Analysts have cautioned that while Goldman had a good quarter, broader challenges, such as electronic trading and tighter regulation, still exist. Investors will see whether Morgan Stanley's crown will fall next week.
Goldman Sachs Group Inc is a investment banking, securities and investment management firm. Its segments include Investment Banking, Trading and Principal Investments, Asset Management and Securities Services.
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