Following up on the bigger they are, the harder they fall micro-meme:
None of the above mentioned are going to have a problem putting food on the table anytime soon. Still, where would I place my bets?
Perot and Sumner dry up. For Perot it will be the much vaunted taste for municipal finance countered by a non-existent political profile, while in Sumner’s case it will be simple over-leverage in a dying industry. Meanwhile, Paul T. Jones and Goldman will become big winners as their ships right themselves. Their own bets are in – only time stands in their way, and that’s something they can both buy using planning and action (and a smattering of goodwill) as collateral.
Morgan Stanley and Goldman Sachs will soon be bank holding companies. This means Wall Street as we knew it has ceased to exist.
They’ll be lining up at the Fed trough, permanently. But I don’t think this spells the end of investment banking – when this round is over, the hedge funds still standing will pick up where MS and GS left off.
Picture an exchange of white shoes for black boots.
Slightly less amusing than owning banking stocks
From the Screw FASB And Their Damn Year End Closings Department:
From the Every Dog Has Their Day Department:
From the Sallie Mae’s Collateral Is Worthless Department:
From the I’ll Take That Muni At LIBOR + 16 Department:
From the Microsoft Ain’t Dead Yet Department:
Wall Street is catching some flak for refraining on sell recommendations:
Analysts rarely said “sell” before the Spitzer settlement because they didn’t want to jeopardize investment banking fees. Now, they’re more concerned about maintaining good relations with company management.
Meanwhile, Ben Stein is throwing Goldman Sachs a one-two for talking their book – right now Goldman is short the mortgage market, and they recently released a less than enthusiastic report on the housing market.
Maybe Mr. Bueller should quit whining and sell his tech stocks while he can – Goldman recently downgraded many of those as well.
Alpha, as in GS’s quantitative Global Alpha fund. Someone is on the other side of every losing trade, and once one of those “someones” finds a flaw in other’s methodologies they pounce. Who’s the culprit here?
UPDATE: More on GS, from PK. This isn’t the Alpha fund getting assistance (yet), and David Viniar makes that clear. Also note that Hank Greenberg is one of the investors stepping up to help out – I find it somewhat ironic considering his previous “employer” just finished touting how comfortable they were with their fixed-income exposure, which is essentially saying “we’re not in the game, but we’d maybe, kinda like to be now.”
And still more from Mr. Kedrosky on that “other side” of the quant coin I already mentioned.
UPDATE 2: At least one fund has come clean for being other the other side of some sub-prime trades.