The Last Metro?
Courtesy of The Nattering Naybob
Last Time Out
In our June 9th missive The Force Awakens?, with a modified and humorous 90 second Star Wars theme intro crawl video, we provided a glimpse at the MSM's dubious twist on macro news. Today, we follow up on several popular memes where things may not be as they seem…
The Last Metro
This French masterpiece was one of Truffaut's last three films, just prior to an unfortunate death from brain cancer at the young age of 52. In Nazi occupied Paris, an actress married to a Jewish theater owner must keep him hidden from the Nazis while doing both of their jobs. The film demonstrates resistance through culture in a story about surviving censorship, antisemitism and material shortages during war time occupation.
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Goldman (NYSE:GS) Stinks?
Revenue last quarter was $6.34B; weakest since Q4 2011 and you have to go back to 2004 to find a lower start-of-year total $5.93B.
2016 Q1 Yoy revenue from: investment banking -23%; financial advisory -20%; investment mgmt -15%; underwriting -27%; equity underwriting -66%; trading – 37% (last year +46%); debt, currency and commodities (FICC) trading -47% (last year +10%); investments in private and public equities -95%.
Yoy stock price -31%; headcount +6%; employee pay and benefits -40%, aw those poor bankers and finally, drum roll please… NET EARNINGS -60% and OVERALL REVENUE -40%.
On this scintillating news (April 19th, 2016) all commercial banks stocks were up and GS +2%, HOORAY!! Since that day -10% OUCH!!
Above note, what a nasty looking chart, the top six banks Yoy Q1 – The really good news? Since banks typically generate at least 33% of their annual revenue during Q1, it is typically the strongest for investment banks. Oh boy!
Brexit Spooking The Herd?
On May 15th in The 5:15? we warned about potential disturbances around June 21st and the week prior to quadruple witching.
"The Brexit vote next Thursday is such a big deal – one country, one Democracy on this planet – our closest cousins, in fact, is putting their foot down and saying "we don't know if things will be better or worse but we do know that what we have sucks – so we're voting to change." Obama was elected on the "Change" platform but, as evidenced by the poll above, nothing has changed – we need something more drastic than a new President." – Philip Davis – Philstockworld
Our good friend also commented:
"The reality is that nothing will happen on June 24th anyway. The Brexit vote is to initiate a UK action that will give 2 YEARS' notice to the EU that they plan to leave the union. There will then be at least 6 months of negotiations regarding the terms of the withdrawal, including drawing up trade agreements between the UK and remaining members. That's all a big nothing."
In the context of current market action, Mr. Davis is spot on on both counts. Looking towards future market uncertainty or potential volatility, another one of our favorites commented:
"So even if the ruling classes pull out the stops to keep the UK in the EU, it's going to be a fraught, messy process. The past precedent show that with smaller countries, with less central issues at play, in times of much lower political stress, the effort still took over a year. That is an eternity in financial time. While a Brexit would be a seismic event, a protracted effort to reverse a Leave vote would be an ongoing source of uncertainty and hence volatility." – Yves Smith at Naked Capitalism
Yet the MSM parrots that Brexit is currently spooking the markets when nothing could be further from the truth.
