Residential sales jump 72% in 2Q

... out the window?

..and onto the highline??

off of low base no doubt, but good sign

Riversider, curious when you sleep?

Goldman Sachs just reported q2 results which showed investment banking revs -36% yoy, trading and principal investments -39% yoy, asset management -11% and copensation expenses -43% yoy. Each investment bank has its own dynamics, but by using Goldman's results as a proxy for what is happening on Wall Street, it is hard to see how real estate rebound is sustainable without additional price cuts.

thx for the link jsmith...

I don't trust Goldman's numbers. They are underreporting how much the contribution of Principal activities. If you take the likely contribution you must leave with the conclusion that Goldman will be very challenged on the earnings front going forward.

One down quarter doesn't mean a bad year overall for Goldman, either. As the article notes, continued sales will depend upon the economic recovery.

Maybe, I have no way of knowing. To me the most relevant are their investment banking and compensation numbers. Investment banking activity throws off a lot of ancillary business in New York (lawyers, dining, limos, etc.). Compensation's importance is self-explanatory, I think.

I agree that one quarter does not make a bad year. Based on the global economic data, hoewever, it is hard to be optimistic.

Where Goldman is concerned, it's difficult to be pessimistic. Not sure how many souls they've traded to the devil, but they pretty much always seem to come out on top.

Goldman is a short.

I am not rying to defend or be sorry for Goldman. I am simply looking at their business activity as a broader proxy for what is happening with Wall Street compensation and its impact on demand for real estate.

Goldman is quite different unique as a firm. They don't have retail or consumer exposure or have bank branches. They most closely aproximate a hedge fund.

Your point is?

A hedge fund with the leading M&A advisory business. And a huge real estate arm. And an IPO advisory business. And a private placement group. And a commercial lending business. and...

"On down quarter doesn't mean a bad year overall for Goldman, either."

Of course, not, but you're missing the point here. Its the trend, and the fundamentals underneath. Principal trading drove Goldman over the past few years, and its down and legislation is going to make it more challenging to bring it back (or have some of it at all). The other core businesses (what used to be *the* core) weren't so hot last quarter, and they're down more.

Point is principal trading covered a lot of things up, and its under attack.

"A hedge fund with the leading M&A advisory business. And a huge real estate arm. And an IPO advisory business. And a private placement group. And a commercial lending business. and..."

Of course, what does it say when the first part has dwarfed all the rest? (and thats the part under attack)

They'll do well in all the old core areas. But remember what their profits looked like last time those drove the majority of revenue...

btw, someone also posted the miller samuel numbers on the board yesterday, ppsf by size by quarter.

categories were all 33-50% off peak.... and this includes Q2 numbers.

of course sales increased off of the nothing they were at, people need to live.... but it seems as though its just locking in the low prices.

also, don't forget who REBNY is... its the brokers.

Sorry Steve!

Goldman makes a mority of its money from principal trading activities. period.

what's a mority?

majority..

yes, absolutely.

(could have been "minority" as easily, wanted to check first)

Fwiw, a family member bought a condo btwn $3pm to $5mm range in soho, almost definitely in that report, against my advice.

While at the four seasons Lanai, the family member girlfriend admitted regretting their purchase. 1) probably couldve lowballed another $500k at the time (they never countered) 2) another unit in bldg came up at lower price in the last 2 months. And it's been sitting.

Make of it what you will.

So they are down $1mm in 9 months while still waiting city to approve Renovations.

I said rent a $20k/month apt near soho and take your time. Could've had a rental and th lower priced unit for 20 yrs and still been ahead, if they waited 9 months.

That's called deflation.

"Goldman makes a mority of its money from principal trading activities. period."

BUT "principal trading" includes ALL trading on behalf of customers AND themselves, dummy. The vast majority of their money is made trading for clients. A cursury look into their finances, or scan of their conference call transcripts or the analysts notes on them will tell you that they earn 5-10% of their revenue from prop trading, or what you would call a hedge fund. Depending on the quarter. Meaning 90-95% of what they earn is NOT prop. The smell test is - what do firms that DON'T do prop trading make for the same activities? The answer is JPM etc do about the same, sometimes more.

You are confusing "Principal Investments" with "principal trading." Almost EVERY wall street firm that trades for clients has a "principal trading" line item, even though 99% do not do prop.

See page 4 of JPM's supplement. They don't do prop at all, yet have this same line item.

http://files.shareholder.com/downloads/ONE/968024199x0x387171/79855d7d-cc5f-4a91-87ed-8ca848266fd8/2Q10_ERF_Supplement_7-14-10_FINAL.pdf

Jefferies, which has no prop and never has - has the same line item (see page 3)

http://www.jefferies.com/pdfs/2010Q2FinancialResults.pdf

And so on.