Both Goldman Sachs and Bear Stearns beat analyst expectations today: the former, in its unfailing ability to emerge from a building on fire while everyone else burned to a crisp, the latter, in its unfailing ability to push the bounds of failure. BS posted its biggest decline in over a decade, with third-quarter net income dropping 61 percent to $171 million ($1.16/share), from $438 million ($3.02/share) last year (total net revenue fell 38% to 1.3 billion, from $2.1 billion quarter on quarter).
In a press release, Jimmy Cayne made mention of “difficult securitization markets” and “high volatility,” though chose not to name check the pair of pink elephants (Bear Stearns High-Grade Structured Credit Strategies Master Fund Ltd., Bear Stearns High-Grade Structured Credit Strategies Enhanced Leverage Master Fund Ltd.) that gifted the firm with $200 million in losses.
Taking a cue from the CEO’s precipitously falling bridge scores, shares of BSC dropped 29% this year (though the stock was up 2.31% ($2.67) to $118.31 by noon today, after the company announced that it would be smooth sailing from here on out).
Matt Albrecht, an analyst at Standard & Poor's recommended a sell, but ever the glass half full kind of guy, spun a silk purse from a sow’s ear, noting: ``If there's a market turn, Bear Stearns has the most upside to go because its share price has dropped so much.” (Don’t even act like you’d pass up the chance to use such a fantastically old-timey proverb, given the opportunity.)
Bear Stearns Net Drops Most in Decade on Credit Rout [Bloomberg]
Press Release [Bear Stearns]
Posted by Not Ron Paul , Sep 20, 2007 12:17PM
Ron Paul lecturing Bernanke on lowering the rate. Awesome.
Ron Paul '08
Posted by Random Banker , Sep 20, 2007 12:24PM
The only difference between Goldman and Bear Stearns is that Goldman is located on Broad Street and Bear is located on Madison. I mean GS is skewed toward equities and Bear toward debt but really these guys are the same shop.
GS people will argue they have smarter people but what's the difference between genius and most genius? I defy anyone who reads this site to distinguish between an MIT Math PhD and a University of Michigan math PhD.
GS people think they're the most prestigious shop on the street, which is true but 30 years ago they were an also ran who's to say where they or Bear will be in 30 years.
Posted by , Sep 20, 2007 12:32PM
@ Not Ron Paul 12:17PM
Are you the one asking about getting tickets to the private reception in Manhattan with Ron Paul?
I found out the contact is averyknapp "at-symbol" gmail "dot" com
They haven't picked a loc yet, and they are limiting the # of tickets so that people get plenty of facetime, which is the only reason I'm willing to throw his campaign a grand. The guy is an organizer for Paul in NYC.
Posted by Joe L , Sep 20, 2007 1:07PM
Cayne, your A$$ is mine!
Posted by Mike Hunt , Sep 20, 2007 1:14PM
I wonder if I can issue some PIK notes to fund my trip to the Ron Paul dinner, any takers?
Posted by Siamese Ron Paul/Lyndon LaRouche Twin , Sep 20, 2007 1:30PM
Guess I'll buy some thirty year puts and calls on GS and BS. Thanks for the tip, Random Banker!
Posted by , Sep 20, 2007 1:33PM
Hah! Ron Paul owned Bernanke on CNBC today.
Classic -- www dot youtube dot com/watch?v=AeHWW5gbc0w
Posted by , Sep 20, 2007 1:36PM
The thing that makes me wary of the donation is that this country isn't ready for an intelligent president.
Posted by still a constant wanker , Sep 20, 2007 1:38PM
the difference is one puts its own money at risk and the other puts your money risk ... and i bet you also think the saudi govt (gee are they part of OPEC?) won't let the dollar peg slip ... idiot
Posted by , Sep 20, 2007 1:39PM
Bush/Clinton/Bush and now another Clinton, because the odds already show that Rudy McRomneybee doesn't have a snowball's chance in hell of beating a Democratic contender who will more than likely be SHillary.
Posted by , Sep 20, 2007 1:40PM
why do we all love ron paul again? im totally ready to jump on the bandwagon if i have a defensible reason to be there. he's the guy who seriously wants to put us back on a base metal standard right?
Posted by , Sep 20, 2007 1:43PM
its true, no republican in the field can possibly win this election. its sad really. because you still won't see republican voters running around pretending like they are going to move to canada.
Posted by old school , Sep 20, 2007 1:44PM
Gold is for suckers. We should go back to the granite standard and have the currency freely convertible into large blocks of stone.
Posted by Ron Paul? , Sep 20, 2007 1:50PM
I disagree with Paul about going back to the Gold Standard, but I do agree that the principals of sound money are important in the long-term. The USD is now equal to the CAD. Gold is at a 20 year high today. The EUR is at 1.40. The Saudi's for the first time in history aren't following our rate cut and are considering de-pegging from the dollar. We are again increasing the debt ceiling from the current $9 trillion. Do we really think we aren't going to see inflation pressure if we keep cutting rates?
I just like Paul because he's about sound monetary policy, he's studied history and voted against even going to Iraq unlike Hillary---not because he's a Peacenik, but because he knew it was an absolutely horrible idea.
Honesty and principles --- maybe they don't matter anymore, but they still count for something to me.
Posted by Random Banker , Sep 20, 2007 1:50PM
still a constant wanker:
If Bear Stearns doesn't put their money at risk then why did the lose of much of their money this quarter?
You clearly are neither an MIT nor Michigan math PhD. You really should have showed up for that teach-in I held the other night.
Posted by Ron Paul is a hack , Sep 20, 2007 2:00PM
We need to abolish currency altogether and go back to using cattle as legal tender.
Posted by Random Banker , Sep 20, 2007 2:06PM
Ron Paul is fucking awsome. THe problem with Gold Standard is from an objective point of view, Gold is the ultimate speculation. Why the fuck is this shit valuable again? OH, that's right because people like shiny things.
Why not a potable water standard? Instead of a huge vault we can keep it in a big water tank under the Fed. A tleast you can fucking drink water. If there's a nuclear war how many days can you go with out water 3? Maybe 4? How long can you go with out Gold? The rest of your fucking life?
I'm not saying being on a potable water standard isn't stupid, I'm saying the entire concept of Gold is ridiculous.
Ron Paul's foreign policy, is the only thing close reasonable I've ever heard. The greatest irony of all time is that we created Bin Laden, Sadam and the Ayatollahs in Iran as foreign policy blow back.
Posted by Some guy , Sep 20, 2007 2:09PM
For Siamese @1:30
Ha ha ha ha...I thought I was the only one that remembered Random's trash taking session about his awesome CFC trade...
Posted by Ngaoti , Sep 20, 2007 2:23PM
I trade you 300 cattle + 100 sheep for your daughter.
Posted by ian , Sep 20, 2007 2:25PM
RB 2:06- The reason its a gold standard is because the supply of gold is pretty much finite, and the amount dug out of the ground every year is small relative to whats above ground. I think the total amount of gold ever mined would fit on a tennis court. So if money is backed by something that can't increase very fast on a y/y basis, then you can't run an inflationary monetary policy.
Posted by , Sep 20, 2007 2:28PM
It it would all fit in a tennis court, why did they make fort knox so big?
Posted by Random Banker , Sep 20, 2007 2:31PM
I stand by my CFC trade. Though, some trader I can't remember who said "You know what the difference between a long term trade and a short term trade? The the long term trade is under water."
that being said I buy thing when they go down a lot. Period. From K-Mart in 2002 to citi bank in 1992 during the last housing crisis, value investing simply outperforms growth and I'm willing to wait 3 years or 5 years for the prices to correct themselves to reflect intrinsic value.
Posted by Random Banker , Sep 20, 2007 2:38PM
ian:
Yes, this is true but the amount of H2O on the planet earth is also finite. We've been drinking in (and peeing out) the same water over and over again for past 10,000 years.
Posted by mep , Sep 20, 2007 3:48PM
Water is finite but desalination works.
Posted by auric , Sep 20, 2007 3:51PM
gold doesn't evaporate
Posted by Inquiring Minds , Sep 20, 2007 3:58PM
don't you guys have some trades to clear or NAVs to calculate?
Posted by auric , Sep 20, 2007 4:04PM
don't worry about it, analyst
Posted by get a clue , Sep 20, 2007 4:09PM
Random Banker: Distinguish a Michigan and MIT math PhD? No. But a Michigan State and MIT math PhD? Oh hell yes. And at least for the PhD, there are aggreed on and rigorous standards.
Michigan vs. MIT undergrad? Yep, seen that, done it, and Michigan didn't come out on top. Same thing with Michigan versus any Ivy/Superb Northeast private school for undergrad. And don't even talk about Penn State or Indiana vs. MIT undergrad. In fact, don't even talk because the same holds true for degrees without well-defined standards (like MBAs).
Finally, math? Pure math? Who cares? Applied math, stats, OR, econometrics, CS... those are fields with something useful to bring. But pure mathematicians are just tragic in a finance setting. I've never seen a pure math PhD who wasn't a clueless fuck -- except those that decided to switch to IT and accepted the lesser dreams they deserved.
Posted by @2:28 , Sep 20, 2007 4:20PM
"It it would all fit in a tennis court, why did they make fort knox so big?"
Q1. If Bill's whole dick would fit in an intern, why did they make Monica so big?
Q2. If Senator Craig's feet could fit inside the stall, why did he make his stance so big?
A. Because that's the way the government likes it.
Posted by Anal_yst , Sep 20, 2007 4:54PM
Look, given his severe chain-smoking habit James Simons is well-invested in genetic research, cloning, etc, as he will likely be in desperate need of new lungs sometime in the very near future. That being said, I'm sure he has developed a means for creating the ultimate political candidate by means of assembly.
Take Paul's foreign policy, Hilary's balls, Romney's business accumen, Guliani's hardline no BS demeanor, Romney's hair (its beeaaautiful), Huckabee's last name (its the funniest sounding), etc, etc.
We have the technology. We can rebuild [him]. Better, Faster, Stronger, Smarter. Waahh waahh waaaahh waaahhh waaah waaahhh....
Posted by , Sep 20, 2007 4:55PM
"gold doesn't evaporate"
Gold doesn't fall from the sky either.
Posted by de Cosmos , Sep 20, 2007 5:33PM
Ben wouldn't drop gold from his helicopters, would he?
Posted by Get over yourself , Sep 20, 2007 5:56PM
Hey Random Wanker - why would anyone need to take a "teach-in" from an idiot that does not know the difference between the Discount Rate, the targeted Fed Funds Rate and Open Market Operations (the actual tools the Fed utilizes to inject reserves)? Also, let's see BSC still reported Net Income from Q3, although they lost $200mio from HGSCS and the investors (your money) lost what? $1.6bln. Hmmm. GS knocked the cover off again why? They sold proprietary (own money) interest in companies bought years ago and actually made money trading mtges proprietarily. I think this is a significant difference in business models. Keep "trading" for the long term portfolio. I'll trade you from the short side thank you.
Posted by The Mongbat , Sep 20, 2007 6:57PM
Ron Paul is the Howard Dean of the Republican party, minus the cash.
Posted by Random Banker , Sep 20, 2007 9:10PM
Get over yourself:
One you moron, obviously the teach-in was a joke.
Second of all do you really think I don't know the difference? Or that i just misspoke?
Third, I could give a flying fuck about one quarters earnings, I'm sure Goldman piped in some super shitting trading results back in 1998 when they were blowing themselves trying unwind LTCM's positions and shoot against them at the same time, or whatever the fuck it was. My point was one quarter is completely irrelevant.
I wouldn't call what I do "Trading" nor do I generally respect people who "trade" Thus being Random Banker, and Not Random Trader. Traders are all trend following, group thinking sheep, if you ask me. I'm not saying you can't make money that way. and I'm not saying you're not smarter than me. I'm just saying I refuse to buy shit simply because other people are doing it.
I simply use the term "trade" because from a pure Ben Graham perspective, what I do could not be called investing and thusly I don't not bestow that honor upon myself. I suppose I should call them long term value based speculations. With a couple short term speculations thrown in for good measure.
Check yourself before you wreck yourself.
Get a clue:
Yeah, I consider "math" anything that requires math above basic calculus. So econ, applied math, computer science, physics, financial engineering, whatever.
Posted by , Sep 20, 2007 10:15PM
Finally, an official link....
http://www dot ronpaul2008 dot com/events/new-york-city-evening
Posted by Michael Anthony , Nov 26, 2007 5:30PM
I have a question for proponents of the return to the gold standard. If gold reserves are finite, how can there be enough yellow metal to implement the gold standard? Especially, considering the population growth in the USA and the world at large. Is there enough gold to go around? Is a return to the gold standard practicable?