This morning Goldman reported garbage earnings thanks to a collapse in trading revenue.Obviously a big question is: Is this an industry-wide thing, or is Goldman no longer Goldman?
Presumably it’s a bit of both, though on the conference call, this issue came up front and centre.
Here’s CFO David Viniar, via Seeking Alpha:
We don’t believe there was really any impairment of our franchise at all during the quarter, but I don’t want to sugarcoat things. I think we underperformed during the quarter. So just a little more on that. Every business, as I imagine, had positive revenues. So it’s not like there were big losses somewhere. Volumes were lower, but they weren’t a lot lower, which is why I tell that we don’t think there was any impairment of our franchise. We have certain — I mean, it’s harder to figure out volumes in some of the FICC businesses than it is in Investment Banking, where you have league tables and you have volume numbers. But we have several measures that we use, and I would tell you that they were down but down modestly. Given some of the macro uncertainties that we saw, many of which were driven by political rather than economic issues — so they’re much harder to analyse, certainly for us — we didn’t manage the market-making inventory that we get as well as we have in the past. That was true across the franchise. It was especially true in Europe and Asia, where many of these macro political concerns existed. As a result, we retained very, very little risk.