Photo: Goldman Sachs
For the first time in ages, stocks fell pretty hard yesterday.One contributor was Goldman Sachs, which delivered a mediocre earnings report, and even a more depressing-sounding conference call.
On it he discussed fears of regulation, economic uncertainty, and a weak trading environment.
We’ve read through the transcript and plucked out the key comments made by Goldman CFO David Viniar.
The muni market, it's not just not that bigger part of our business. So it wasn't a positive for us, but it was a very immaterial negative to the firm. Look, it was really customer activity levels more than anything else. And while you know I don't like to talk about one month or another month, clearly, in the month of December, things were just dead. There was just very little activity.
I think it was a factor in that the extent that did you say the violence of the move especially coming when it did as we were getting towards the end of the year, caused even more uncertainty and caused more clients to sit on the side and say, 'Let's wait till the year-end. Let's see how things unfolds and call me in January.'
I think some of the things that we saw over the course of the year when you had as you said, some concerns about regulation but also about Europe, about inflation, about many other things caused people to be very unsure. Even though we basically had a year where for the most part, asset prices kept going up, it was not a year where anyone felt confident asset prices wouldn't going up. And so I think that caused a lot of people to sit on the side line.
It's really, honestly, it's a question of opportunities. We're not artificially holding that down. We just have not seen the opportunities to do things that would increase the leverage. If we see them, given the amount of capital we have, given the amount of liquidity we have, we would take advantage of them.