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Lloyd Blankfein: It's Quiet Out There...Too Quiet

The market is boring and full of terrors.

From the top of 200 West Street, a man can see clear across the river and out over the foothills of New Jersey, down the long southern shore to and up north to The Palisades. Woe unto anything - man or market volatility - approaching Wall Street and hoping to avoid the watchers on the wall of Goldman Sachs.


Lloyd Blankfein knows these vistas for he casts his gaze upon them day after day, ever watchful, ever ready to protect his kingdom. And what Lloyd sees looming on the horizon (and on his Bloomberg terminal) these days is...a terrifying nothing.

The U.S. stock market may be a bit too calm right now, Goldman Sachs CEO Lloyd Blankfein said Tuesday.
"Every time I get accustomed to low volatility, like we were towards the end of the Greenspan era, and we think we have all the levers under the control, ... something erupts to remind us that the idea that anybody is in control of everything is hubris," Blankfein told CNBC's "Power Lunch."

What lies beyond the horizon? The not knowing is what Lloyd fears the most. It feels like years since his most-trusted (and stoutest) warrior out into the wilderness, but it has been only a matter of weeks since Gary ventured out of view and lately travelers have begun to arrive whispering news that he has fallen in with the inept but petulant cabal ruling the Capitol. In fact, rumors are everywhere that the new short-fingered king who once threatened war against Lloyd has gathered a number of Lloyd's former Goldmen under his banner, even the useless angry drunk from M&A and the bug-eyed son of Sir Bob of Mnuchin. But that only worries Lloyd because of what his fellow warlords might think, it does not prevent him from delivering sick-ass burns unto the new king:

"My blink reaction is a sense of pride that again another person who wasn't necessarily friendly to our institution in his campaign recognized the talent of these people," Blankfein said.

So why, if Lloyd is to believe all the troubling news that he reads from what the ravens bring in the day and the bards sing of in the night, is there no sign of unrest in the long sprawl of his purview? It feels wrong, and he cannot rest in the quietude.

"I don't know what brings us out of the doldrums, but I do know this is not a normal resting state," he said.

It's the not knowing that he feels driving him slowly mad from with the prison of his own mind.

"The low volatility may be a bit of a bubble of confidence, but we won't know until we know," Blankfein said. "My own expectation, which I never rely on ... is that we're muddling through. A lot can go wrong, but the base case is that things are going right," he said.

Stay focused, stay positive and stay alert, that's Lloyd's motto. The night is dark and full of terrors, but one mustn't begin to believe in the mythical return of long dead monsters...

"We are probably the large bank that is best-positioned for the return of Glass-Steagall, because we are not a universal bank."

In the quiet...there lies madness.

Goldman Sachs CEO Lloyd Blankfein says the market's low volatility is worrisome [CNBC]



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