Join us LIVE starting at 11:00 AM for the Goldman Sachs (GS) quarterly call. You can review the first quarter numbers here while we wait for it to begin..
10:59: Hold music.
11:01: Call starting.
11:03: CFO David Viniar running through the numbers.
11:04: Q2 vs Q1. Q2 was much more reflective of credit markets, rather than commodities. Also, benefited much more from equity markets. But M&A and security services still suck — result of low CEO confidence and generally cloudy outlook.
11:06: Lots of hits on real estate. See here.
11:08: Tier 1 ratio of 13.8%. Benefitting from having no consumer exposure. Benefitted significantly from equity issuance in the… financial services business. A bank helping banks raise money (not sustainable).
11:09: Huge spreads and strong market share helped monster FICC number.
11:12: Comp over $6 billion. Compensation decisions are not made until year end! All this could disappear if things go back in the toilet.
11:15: Q&A time.
Q: Views on OTC market regulations?
A: Too early to tell.
Q: Any business-line rationalization coming?
A: New regulations and capital requirements won’t hurt us. Always-looking to expand businesses. Rather than looking at getting out of businesses… when you talk about getting out of businesses, you usually get out of the business at the bottom and in at the top.
Q: Funding and debt maturity? How much have your pre-funded?
A: We have a lot more cash than we have debt maturities coming do. We’re not forced to issue debt for quite a while. But, we’ll be in the market periodically to keep bringing spreads in.
Q: Do 1st half results encourage you to raise your ROE expectations?
A: No. There are good parts of the cycle and other parts of the cycle. The world is still “not a great place”
Q: (From Meredith Whitney, who missed her earlier spot in the queue due to being on mute). When will you update your shelf registration with respect to stock repurchase.
A: Shelf is for issuing, not repurchasing, so there’s no need to update. No real answer on repurchasing.
Q: What are your thoughts on capital ratios?
A: No real answer. World’s stil a tough place.
Note: Lots of uninteresting questions and less-interesting answers.
Q: Hedge fund business:
A: It looks like the redemption cycle is over. Money is flowing back in.
Q: M&A market coming back?
A: Might come back a little in the second half this year. Maybe not.
Q: CIT exposure?
A: Well secured and well protected… we think we’re fine there.
Q: TARP warrants?
A: No answer… still in discussion with the Treasury. Not sure on the timeframe.
11:57: Call over. Little learned.
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