Sssssh. Don’t talk about trading.

The first quarter results released Tuesday by Goldman Sachs showed a 21 percent drop in net earnings from the year earlier—from $3.46 billion to $2.74 billion.

But the drop was less than Wall Street’s analysts expected—thanks in large part to strong results in bond and stock trading.

But far from crowing about its trading prowess, Goldman is keeping this fact very quiet. So quiet, actually, that the word “trading” doesn’t appear at all in its press release or accompanying materials.

Last year, Goldman’s quarterly results mentioned “trading” 9 times.

Back in 2006, trading was used 11 times in one quarter. Now the word has been vanquished.

This strange new silence might be an attempt by Goldman to at least appear to be complying with so-called “Volcker Rule” limits on the firm’s proprietary trading that were included in the Dodd-Frank financial reform law.

But just because Goldman is not talking about trading, doesn’t mean it is not trading.

Goldman’s equities traders brought in $1.054 billion in the first three months of the year, compared with just $847 million over the same period last year. That’s a whopping 24 percent growth of revenues.

The bond traders staged a dramatic recovery from the last quarter, when they brought in just $537 million of revenue. This quarter they garnered $1.024 billion—a 91 percent jump.

This boom in trading revenues is especially surprising because the first quarter of 2011 has been described by most market watchers as a “difficult” one for traders. Citigroup, Bank of America, and JP Morgan Chase all pointed to a tough trading environment.

Goldman—again—somehow—seems to have outsmarted the rest of Wall Street.

Many in the financial media have missed the booming trading. “Weak trading saps Goldman results,” a headline on the BBC read.

It was easy to miss because Goldman scrapped its business structure this year following the completion of its 8-month internal study of its business practices. Gone is the old category of “Trading and Principal Investment”—which once housed both client and proprietary trading. Now that is divided into two divisions—“Institutional Client Services” and “Investing and Lending.”

Institutional Client Services is where Goldman does its market making for clients. It is made up of both the market making activity once counted under Fixed Income, Currencies and Commodities and those under Securities Services. This division did indeed see revenue losses compared to a year ago due to lower trading volumes on behalf of clients—a drop of 28 percent for bonds, commodities and currencies, and 24 percent for stocks.

But both client bond-commodities-currencies and stock trading was up from the particularly ugly third quarter. Perhaps due to volatile commodities markets, income from market making for that section was up a stunning 164 percent from last quarter. Equities market making rose 24 percent from the first quarter.

It’s the “Investing & Lending” section, however, where Goldman’s in-house market expertise really shines. This is where the prop traders who dare not speak their names now reside. Overall, the hidden traders at Goldman saw revenue grow 36 percent from last quarter, and 37 percent from the first quarter of 2010.

Just don’t call them traders, OK?

Goldman’s Dirty Word [NetNet]

Article courtesy of Dealbreaker

According to John Carney, they’re to be avoided and included:

* “The guy who always wants you to be his alibi when he cheats on his wife. (“Hey man, is it cool if I tell Kathy that we’re going fly fishing in Canada this weekend?”). No, dude: It’s not cool.”

* “The guy who offers his clients ‘a very special opportunity’ to invest in anything. He has a problem with cocaine.”

* “The guy who throws his phone across the trading floor whenever his positions go south. He’s an angry dude, and the more time you spend with him the more reasons he’ll find to dislike you.

* “Avoid anyone who tells you that you should relax and have a couple of drinks—at 9:15 on a Tuesday morning. You’re not cool enough to hang out with this guy.”

Agree/disagree? In your experience, have you found the guy who throws stuff at people to be someone you actually want to hitch your wagon to?

25 Guys To Avoid [NetNet]

Article courtesy of Dealbreaker

Screener.co, a service that features advanced stock trading tools, announced that it is entering a closed beta today at the Launch Conference in San Francisco.

The service is similar to the stock trading tools offered online by Google and Yahoo, but features a some extra technical tools. The software keeps track of around 48,000 companies’ financial information, which range from net income to the number of employees they have. The idea is to match the same kind of information and tools that professional traders get from very expensive trading services like those offered by Bloomberg’s terminals.

Screener.co isn’t designed to give advice about what companies to invest in — just present the information, like other trading tools do, said co-founder Lenny Grover. It’s a lot cheaper than most trading services today — it costs $24.95 a month, compared to the thousands of dollars that terminals or advanced trading software can cost.

But Screener.co did seem mercilessly complicated with a massive number of advanced options for tracking equities and company performance, with no tutorials in sight. The interface was too complex and that would end up hurting the company’s chances of finding investors and potential customers, said Mint.com founder Aaron Patzer.

“You’re targeting the prosumer, not the consumer, and the prosumer is almost impossible to find,” Patzer said. “The way to go in this market is not more complex, it’s simpler.”

The company is targeting casual traders — the 14 percent of households that have invested anywhere from $100,000 to $1 million in public stocks, Grover said. A fifth of those traders don’t employ a financial adviser through companies like Charles Schwab, and just do the trading on their own using services like Google and Yahoo Finance. The site is also in a free public beta until April 1.

Tags: equities, stock trading

Companies: screener.co

Article courtesy of VentureBeat » deals

From: [redacted]
Sent: Monday, February 14, 2011 11:55 AM
To: [redacted at Citi]
Subject: Re: Citi Sales, Trading & Quantitative Analysis Summer Analyst Program

Hi [redacted]:

Thank you so much for replying my email!!

Ah, what a pity that I missed one of the most prestigious bank in the world, and what a pity citi-group missed a mathematics genius like me, the smartest student ever in the engineering department, the one who beaten math majors in the most difficult competition in the world like idiots, and the one who astutely points out the mars existing in the Gaussian Copula and made proper corrections on it!! [Redacted]‘s stupidity can surely not appreciate my conspicuously superior intellectuality. Woe to the fatuous decision, yet I humbly accpet!

Best luck with citi-bank, and I sincerely hope the trading can still flourish with those incompetent workers, with those preposterous foreclosures and ludicrous CDOs, with those avaricious vampires drying the blood of tens of thousands of poor languishing in loans and poverty! Woe!

May God’s wrath descends, and the world becomes round again, rather than flat! May Wall Street realize its originally obscure identity as a mere defending street against the English colonizers! Beware Ozymandias, beware! If I come to power one day, surely I will follow unfalteringly the foot steps of Andrew Jackson, exterminating these unsatisfying and heinous vermins first and foremost, breaching the seemingly unbreakable pillbox of the shameless bankers, advocating the glory of justice, and spreading the merrying news of equality and happiness!

So help me, God!

Article courtesy of Dealbreaker

Is there a particular co-worker you’ve been thinking would enjoy a few minutes with you on top of your desk or in the men’s room stall but were skittish about the idea of a) approaching them and b) having sex at work? Great news! According to FINS, lots of people are banging in a room just off the trading floor as we speak and they’ve got hard numbers to back it up. Use this information to make your case when offering the object of your desire two free passes to [Your Name]-ville.

Who was willing to have an actual tryst, say, in the photocopy room, for instance? Across all industries, 33% said they had had one in the office. Bankers almost matched that average with 32.5%. Accountants weren’t so intrepid: only 21.74% said they had.

Bankers were also more likely to get caught in the middle of that tryst: compared with 0% of accountants, 3.7% of bankers said they had been walked in on. That was less than the average of 4.2% across all industries, however.

These numbers aren’t bad, but we’re confident you can do much better. So, in honor of the day, we challenge the financial services industry to double both their averages (re: office trysts and getting caught). You will receive more points for:

* How open the room is (example: bathroom: 1 point; middle of the trading floor: 10,000 points)

* How loud you are (incorporating tambourines will get you far)

* Rank of your partner (subordinate: 1 point; 5 points for every level higher they are than you; anyone in HR is 1,000 points)

* For every minute you keep going after getting caught, with people standing in the door way, you get 100 points

* Bonus points will be awarded for: wearing the mask from Scream; having phone sex with a colleague over the PA system; accoutrements; if you’re the submissive type, you make your partner say stuff to you like “you are such a shitty trader.”

Bankers Get More Love in the Office Than Accountants [FINS]

Article courtesy of Dealbreaker

The division, called Process Driven Trading and run by (part-time musician) Peter Muller, has generated about $4 billion in profits in the 10 years through 2006. It will be renamed PDT Advisors, run by Muller, allow Morgan Stanley to retain a stake in the new venture and take about 60 MS employees along for the ride. [WSJ]

Article courtesy of Dealbreaker

Amusingly, both the New York Times’s DealBook and The Wall Street Journal offer among top tech stories today the trading of privately held companies, including Facebook.
The WSJ’s piece, by Pui-Wing Tam and Geoffrey A. Fowler, notes that trading of shares held by insiders — venture capitalists and employees — on [...]

Article courtesy of BARRONS.com: Tech Trader Daily

$$$ Insider Trading Probe Casts Shadows Over 2011 [Reuters]

$$$ Madoff Trustee Makes If Halfway With $7.2 Billion Deal [Bloomberg]

$$$ Interior shots of Nouriel Roubini’s new pad [Curbed]

$$$ Paul Tudor Jones’ Christmas Display [WSJ]

$$$ Tailoring Bonobos For Expansion [Dealbook]

$$$ Obama Signs Tax Compromise Into Law [Reuters]

$$$ SEC Also Conducting Insider Trading Inquiries: Khuzami [CNBC]

Article courtesy of Dealbreaker

LB says we’ll just have to wait and see!

Speaking to investors at the Bank of America Merrill Lynch Banking and Financial Services Conference…Blankfein said future guidelines over such [compensation are "still an evolving picture," adding that the firm has averaged a compensation expense that was under 50% of its net revenue.

Also an evolving picture: whether Gary Cohn will distribute bonuses by driving a dump truck onto the middle of the trading floor or go with the gun they use to shoot tee-shirts out of at sporting events.

Goldman Sachs CEO: Co. Will Return Capital To Shareholders 'Where Appropriate' [Dow Jones]

Article courtesy of Dealbreaker

For the third quarter this year, Goldman Sachs’s trading desks made more than $100 million on seven days, some sort of profit on 64 out of the 66, and lost on a mere two. At Morgan Stanley, which only had one single $100 million day and lost money on ten days, these results would be considered excellent and the sort that James Gorman would knock off a hobo to report. There would be piñatas and cake and they’d let everyone take the rest of the year off for a job amazingly well done. But this is not Morgan Stanley, this is Goldman Sachs, which means the responsible parties are going to pay.

For the traders who brought shame on God’s house, who’ve been made persona non grata since the filing with the Securities and Exchange Commission this morning, who will receive cold shoulders from colleagues and not so much as a ‘ha’ in response to a funny link sent over IM this afternoon, there must be some recognition of what they’ve done. Something worse than being fired or having their bonuses shrunk or their nipples zapped for every inch in the red. An aversion shock therapy of sorts. Something that will make them never want to lose money again.

Not to give away too many details but as a warning to the rest of you at GS– if you hear cries coming from the basement of 200 West today, don’t go down there to investigate unless you want to see things you can’t unsee. Your friends, strapped down and being read passages of a new book by the author himself. Wearing the bandana. As Lloyd and Gary watch through one way glass from above. Wondering if they’ve gone too far, but knowing this is the only way anyone will learn.

The same mistakes won’t be made again.

Article courtesy of Dealbreaker