Bored with zero interest in the bank? Why don’t you check out the latest in aluminium-backed deposit accounts? You take the excess aluminium off our hands, we sell it forward, and hey presto you get interest rates conventional banks just can’t beat!
(It’s the way the gold market has been compensating for its oversupply for generations.) (Terms and conditions apply.)
All of which is another way of saying the world’s aluminium oversupply burden has created some excellent carry opportunities in the off-market storage space over the last few years. Read more
Alternate title – Did Goldman Sachs lose $1.3bn in currency trades in the third quarter, or not? Read more
A few charts and some commentary plucked from a rather bullish note on India from Goldman’s Asia Pacific team:
We should welcome TCS Group Holding to London — the latest Russian firm to take advantage of our attractive Global Depository Receipts regime, which allows a company to describe itself as “London listed” without adhering to all those tiresome governance codes and disclosures that come with a regular full listing.
TCS — better known as Tinkoff Credit Systems or simply TCS Bank — is the creation of Oleg Tinkov, who sounds like a lively chap. He made his first fortune by taking Russian brewing upmarket, before selling out to Inbev in 2005 and then moving into retail financial services in earnest. Read more
Midnight Madness, that Goldman Sachs-led all-night lavish scavenger hunt/puzzle-solving competition/performance art so wonderfully described by Quartz earlier this year, is back and expanding. This year the charitable event will include Citigroup, Credit Suisse, BlueMountain, and Secor Asset Management all fielding teams to compete against Goldman.
Below you can see the pitchbook that was sent to potential participants (in typical banking style) earlier this year: Read more
Okay, don’t just think ‘Oh, Goldman are trying to wring a few last drops of revenue from the EM story…”
Instead, click to enlarge. Read more
Rio Tinto’s problems with its aluminium business are well documented.
But things could have been worse without all that warehousing shenanigans from Goldman et al. Read more
How much would you pay to make Goldman Sachs feel slightly uncomfortable?
The City of Oakland, California plans to dish out $226,378. Read more
That’s recession and the merest hint of the word sends Australian policymakers in to paroxysms of anger.
For example, here’s David Gruen (the Treasury’s chief macroeconomist) speaking before a Senate hearing last week.
From the Sydney Morning Herald: Read more
The pain goes on for the currency dubbed until recently the southern Swiss Franc…
We are not quite sure what is going on here.
Japonica Partners, a self-styled “entrepreneurial co-investment firm” based in Providence, Rhode Island, has launched a tender offer for almost 10 per cent of all Greek government bonds in circulation.
It’s ready to buy paper worth €2.9bn at par, paying a minimum of 45 per cent of face value. Read more
Goldman Sachs has hired 350 investment banking summer interns out of 17,000 applications, claiming it has “no problem” attracting talent six years after the financial crisis sparked a series of deep cuts to Wall Street jobs and bonuses.
That’s from the FT’s Tracy Alloway. Read more
The world is becoming intimately acquainted with the technical ins-and-outs of the Bloomberg LP empire.
There is Bloomberg’s bread-and-butter business of selling sophisticated data terminals to thousands of banking, hedge fund and regulatory authorities around the world. There is also the well-respected news wire run by Matt Winkler. Read more
Message from the CEO of Bloomberg
Dear Client, Read more
Here’s a moderately informative activity for a Friday afternoon.
Log on to your Bloomberg terminal. Type UUID <GO> Read more
Following their absolutely stellar advice to short gold on April 10, Goldman Sachs announces on Tuesday it is now time to take profit on that position:
We have closed our recommendation to short COMEX Gold, as prices moved above the stop at $1,400/toz. We have exited the trade significantly below our original target of $1,450/toz, for a potential gain of 10.4%. The move since initiation was surprisingly rapid, likely exacerbated by the break of well-flagged technical support levels. Our bias is to expect further declines in gold prices on the combination of continued ETF outflows as conviction in holding gold continues to wane as well as our economists’ forecast for a reacceleration in US growth later this year. Read more
Some deep thoughts from Goldman Sachs, by way of Jeffrey Currie and team, on the drivers of the current commodity sell-off (and no, their short gold advice from last week isn’t listed as one of them):
The sharp sell-off in gold was triggered by growing fears that the central bank of Cyprus would sell its gold reserves, potentially reflecting a larger monetization of gold reserves across other European central banks. The decline in prices was exacerbated by the breach of key technical price support level at $1,530/toz and then at the $1,434/toz 200-week moving average, creating the largest one day decline. Spillover from gold and renewed European and EM macroeconomic concerns also created sharp sell-offs in crude oil and base metals, that were mostly front-end driven, crushing spreads (the carry), as longer-dated prices remained remarkably stable.
The biggest ASX fallers on Monday…
… all gold.
(yes, even PanAust)
Last week it was SocGen that declared the gold era was over. Now the precious metals team at Goldman is taking a similar view.
This is from their latest commodity research note: Read more
It was supposed to be one of the best trades of 2013 – buy mining stocks to get leveraged upside to the global economic turnaround. But as we approach the end of the first quarter, only one half of that equation is working. The world economy is recovering strongly but the big miners are being well and truly left behind – Australian Financial Review.
Yep, the miners as a ‘leveraged play on global growth” is not going exactly to plan: Read more
The latest commodity advice from Goldman Sachs suggests the current sell-off may be overdone.
Here are the key points from Monday’s note:
Shifting to near-term overweight as commodity sell-off overdone
Commodity markets declined sharply in February along with emerging market (EM) equities due to renewed concerns over China, which we believe is overdone. Although our price targets other than gold remain unchanged, this pull back has pushed our near-term return forecast from 2.0% to 6.0%, making commodities the asset class within the ECS coverage universe with the most robust near-term outlook. However, our 12-month neutral recommendation remains unchanged as our returns forecast is still a more subdued 3.0%, as we continue to remain structurally neutral on long-dated oil and commodity prices due to the structural supply-side response to persistently high prices.
There’s been a fierce and fascinating response from the SEC to evidence of clairvoyant dealings in Heinz ahead of news of the Buffett/3G Capital takeover offer. The statement is here and the full SEC complaint is here.
Following reports of unusual activity in Heinz call options on Nasdaq on Wednesday – the day before the Heinz news broke — the SEC has obtained an emergency order freezing assets in a Zurich, Switzerland-based trading account which it reckons benefited to the tune of $1.7m from the Buffett/3G bid. Read more
Jim O’Neill, chairman of Goldman Sachs Asset Management, Red Knight, and all-round Mr Bric, will retire later this year, the bank announced on Tuesday.
The full statement follows… Read more
FT Alphaville doesn’t tend to follow the nickel market too closely, but the research from Goldman Sachs on Thursday did strike us as interesting (our emphasis):
2012 nickel market summary: Weak demand growth and lower input costs As background, nickel underperformed in 2012, starting the year at $18,910/t, rising to $21,700/t in early February, and finishing the year at $16,998/t, declines of 10.1% and 21.4%, respectively. Overall nickel prices averaged $17,536/t in 2012, down 23.4% yoy from 22,900/t in 2011. Price weakness reflected a combination of soft global consumption growth set against significantly higher low-cost nickel pig iron supply in China, and, importantly, a shift down of the nickel cost curve in 2H2012 (largely reflecting lower energy and nickel ore input prices).
Add Goldman to the list of large US financial institutions to report expectations-beating earnings for Q4.
From the release:
NEW YORK, January 16, 2013 – The Goldman Sachs Group, Inc. (NYSE: GS) today reported net revenues of $34.16 billion and net earnings of $7.48 billion for the year ended December 31, 2012.
Remember the whipsawing days of 2008? The days when commodity prices couldn’t get crazier?
GOLDMAN SACHS HAS A SECRET PROPRIETARY-TRADING UNIT THAT IS RISKING THE BANK’S OWN CAPITAL BY MAKING INVESTMENTS AND CEO LLOYD BLANKFEIN SAID GOLDMAN WASN’T PROP-TRADING ANYMORE AND THAT IS WRONG AND HE LIED AND HE SHOULD BE HOG-TIED WITH HIS OWN BLACKBERRY CHARGER.
That’s a typical reaction to this Bloomberg piece on Goldman’s “secret” prop-trading team for you. Read more
The following chart, we propose, has the potential to inspire a whole new way of looking at the gold and Treasury market: