Analysts expect Goldman earnings to collapse

I think this is a given. Trading volume down especially on the debt side and complying with the Volcker rule have to have an effect. On a positive side, Goldman really does manage there risk well, even if it means putting it off on their customers...

Anyone follow CMBS? Wall Street selling off the debt below cost. Some of this stuff can't be effectively hedged....

Just waiting for better market conditions.. deals in the pipe

Risk is off

"Risk is off"

Not if you look at the S&P's 11% rally in 5 days it's not. No capitulation - oil back up to $85 a barrel. Doesn't matter there are no jobs - FREE MONEY!

There's still plenty of pain to come, though:

http://www.breakingviews.com/embattled-wall-street-should-prepare-for-worse/1610594.article

treasuries sold off the last 5 days or so, money went into risk assets after "risk off" was the trade for the prior few months. lets see how this plays out

Right shoulder of a head-and-shoulders, relief rally based on Europe, pitifully thin volume, inter- and intra-day volatility is still very high.

This type of volatility is only seen ahead of a significant market decline. Alcoa put it succinctly yesterday - Europe has ground to a halt, BRIC is dying, unemployment has not changed.

The rally could, however, persist through the end of the month. The higher oil goes, though, the slower the economy will get. But bubbles die hard: huge rally on the way down after the dot.com bust, 7% up / down days in 2008 / 2009.

When markets rally because a major bank is nationalized (Dexia) - it's not a good sign. Rallies on that sort of news tend not to be long-lived. Recapitalization of European banks - while good - won't be enough: as soon as Greece defaults (and it will) they'll have to be recapitalized all over again.

Key will be bank earnings, upcoming this and next week, but every central bank (US, Japan, Europe) has said there are significant economic problems and the financial system is under a lot of stress. Markets do rally under conditions like that.

Here's another one:

http://www.bloomberg.com/news/2011-10-12/wall-street-sees-no-exit-from-financial-woes-as-bankers-fret.html

you sound like Art Cashin from UBS Paine Webber.

Follow your intermarkets, and the US will usually follow Europe, and Asia will follow the US. The European markets were down 25% - 30% in a very short time; more than the US, by far. They are rallying (normal) and the US follows (normal).

What's not normal is a 12% rise in any market in 5 days, but also perfectly understandable when there's been a 12% fall in 5 days. That's what we're seeing now. Up days are not accumulation days; they are very low volume. Jobs number last week was godawful: 107,000 jobs, of which 45,000 were Verizon and 19,000 were temps. High-paying jobs down, McDonald's jobs up.

I don't think ever in history has a market hit the 20% bear market threshold, recovered and not revisited it. This week all the news is good(ish); when the news is bad(ish), the exact opposite will happen.

There are persistent rumors that there will be no bonus' this year for goldman employees. And they are from some reliable sources including the reuters reporter who just wrote that book on blankfein.

It seems difficult to connect the wall street worry with the fact that the last quarter showed apt sales and prices up in Manhattan. Who is picking up the slack?

Sales were up, prices were down. Look at the SE report

Probably cheaper to buy a Greek Island than an apt on Manhattan Island.

"It seems difficult to connect the wall street worry with the fact that the last quarter showed apt sales and prices up in Manhattan. Who is picking up the slack?"

I totally agree with apt23 on this one (this happens more often that it might seem from some of the back-and-forth between us, btw). I just don't get it. Maybe it's just time lag? Things were still looking pretty sporty until July-ish. when Europe got ugly, the US macro data took a turn for the worse and US equities cracked. S&P downgrade of US rating was early August. The latest wave of mortgage litigation fears on US banks (esp. BAC) was, what, an Aug/Sept event? The current fear about Wall Street employment followed from all of the above. Real estate prices move slowly (immediate aftermath of Lehman admittedly an exception), and even if they moved quickly the lag to closing and ACRIS filing is months. I just think that the data aren't in yet.

A couple of things re: Goldman bonuses and reliable sources. In a down year, no bonus for SOME employees is a near certainty. Getting "zeroed" (in the vernacular) is a strong message that the future is not bright for the zeroee and can effectively amount to a cheap layoff strategy - i.e., zero the bonus and the person will likely quit in short order without needing to be paid much or any severance on the way out. No bonus to ALL or MOST just isn't happening. Second, bonus plans are a state secret at investment banks (at least until senior management starts leaking directional guidance as a trial balloon or to manage down expectations in the ranks) and there are no reliable sources outside the seniormost management in the firm. That's not to say that a reporter can't speculate now and be proven right in January, but that's different from really knowing now.

sidelinesitter

2 things:

1. RE prices were down in Manhattan

2. The last I looked Goldman's Stock price was $95. That is down from $175 form Jan.
This means there will be a lot(most) getting ZEROED! an much more getting NEG(ie the Partners--shareholders)because they are not making money!
They Offered shares @ $123 in 4/09 and 9/08') so at $95 it is lower than the last 2 public offerings

Oh one more thing. Your bonus theory is BS!

sideline, I posted this elsewhere, but there are two trends that indicate your time lag hypothesis is probably right:

http://urbandigs.com/chart.php?t=Market+Trends&s1=Active
http://urbandigs.com/chart.php?t=Market+Trends&s1=Pending+Sales

"That's not to say that a reporter can't speculate now and be proven right in January, but that's different from really knowing now"

Except the banks report how much they are setting aside for compensation. Becomes pretty clear when the pool shrinks dramatically.

"It seems difficult to connect the wall street worry with the fact that the last quarter showed apt sales and prices up in Manhattan. Who is picking up the slack?"

Time lag. Medians kept dropping for a few quarters after the panic months. Sales get factored in when they close, not sign...

"This means there will be a lot(most) getting ZEROED!"

Go ahead and hope, but this is completely wrong. Most will get a lot less than last year, sure. But most getting zeroed isn't happening. Suggest we revisit this discussion early next year.

"Except the banks report how much they are setting aside for compensation. Becomes pretty clear when the pool shrinks dramatically."

Yes, but they use the 4th quarter accrual as a true-up for the whole year. If they've overaccrued through Q3 and the end of the year is bad, the accrue very little in Q4 or even reverse part of the 9 month number. If the end of the year is strong, they add a big accrual in Q4 to catch up. Obviously we're more likely looking at the former this year. In any case, when Goldman reports Q3 (tomorrow?) there will be a sense, but we won't really know until Jan.

JPM's result should be a prelude: $4.5 billion, HALF of it in a noncash accounting gain.

Dismal.