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☆ Goldman’s Marcus is a lesson in self-made failure
▼ + stars: | 2023-02-02 | by ( John Foley | ) www.reuters.com time to read: +7 min

Being a consumer bank was a good idea when Goldman’s leaders cooked it up eight years ago. Fast forward to 2023, and consumer banking is still highly lucrative. The practice of working through the night is common in the investment banking division Solomon once headed but rare in consumer banking. For example, Goldman’s engineers had to fight to host consumer banking systems on the cloud rather than on the bank’s own servers. That year, nobody from the consumer bank was promoted to the firm’s prestigious partner level.

☆ Goldman cuts Solomon, and his pay, down to size
▼ + stars: | 2023-01-27 | by ( John Foley | ) www.reuters.com time to read: +2 min

Or at least that is the apparent message Goldman Sachs (GS.N) is trying to send by slashing boss David Solomon’s pay by a third for 2022, to $25 million. Measured by Goldman’s performance last year, Solomon actually did fairly well. Goldman also grew its book value – accounting-speak for shareholders’ claim on the lender – by a respectable 6%. It would have been hard to reward Solomon at a time when employees are feeling the chill, and hot on the heels of 3,200 layoffs. Solomon’s humble pie may taste good to his Goldman colleagues, but it could present a different flavor profile to shareholders.

☆ Goldman Sachs cuts Solomon, and his pay, down to size
▼ + stars: | 2023-01-27 | by ( John Foley | ) www.reuters.com time to read: +2 min

Or at least that is the apparent message Goldman Sachs (GS.N) is trying to send by slashing boss David Solomon’s pay by a third for 2022, to $25 million. Measured by Goldman’s performance last year, Solomon actually did fairly well. Goldman also grew its book value – accounting-speak for shareholders’ claim on the lender – by a respectable 6%. Solomon’s humble pie may taste good to his Goldman colleagues, but it could present a different flavor profile to shareholders. loadingCONTEXT NEWSGoldman Sachs said its board had awarded Chief Executive David Solomon compensation of $25 million for his work in 2022, compared with $35 million the previous year.

NEW YORK, Jan 26 (Reuters Breakingviews) - Morgan Stanley (MS.N) is embracing the Pottery Barn rule: You break it, you pay for it. The original breach was one revelation in what makes Wall Street tick; Morgan Stanley’s response, or the idea that it’s an outlier, is another. What’s good for the pottery store sounds good for Wall Street too. Morgan Stanley was one of 11 banks fined by the U.S. Securities & Exchange Commission and the Commodity Futures Trading Commission in September 2022. At the time, the SEC noted that Morgan Stanley had financially penalized and terminated some staff for violating its policies.

☆ Morgan Stanley CEO James Gorman Gets $31.5 Million for 2022
▼ + stars: | 2023-01-21 | by ( Annamaria Andriotis | ) www.wsj.com time to read: 1 min

Morgan Stanley paid Chief Executive James Gorman $31.5 million for his work in 2022, a 10% pay cut from the year before. Morgan Stanley’s board of directors said Friday it awarded Mr. Gorman a salary of $1.5 million and a cash bonus of $7.5 million for his work last year. The bulk of his pay is in stock awards tied to how well the bank performs over the next few years.

☆ Morgan Stanley’s Slimmon says stocks will surprise Wall Street in 2023 — and names two he likes
▼ + stars: | 2023-01-19 | by ( Zavier Ong | ) www.cnbc.com time to read: +2 min

Wall Street strategists expect this year to end on a much better note than 2022 — but they still warn that the path ahead looks volatile. However, Morgan Stanley's Andrew Slimmon said he believes stocks are going to do "far better" than most expect. Slimmon also likes Pool Corp , a Louisiana-based company that sells swimming pool supplies. Fed pivot in the works His relatively positive read on the economy is a big reason for his optimism about the market. But Slimmon said he believes the bond market is signaling that the U.S. Federal Reserve will pivot "sooner than it expects."

☆ Goldman Sachs and Morgan Stanley both hit hard by deal drought
▼ + stars: | 2023-01-17 | by ( Paul R. La Monica | ) edition.cnn.com time to read: +4 min

Earnings for Goldman Sachs (GS) missed by their widest margin since the third quarter of 2011. Revenue tumbled 16% for Goldman Sachs (GS) in the fourth quarter, and profits plunged 66%. Morgan Stanley was hit by the slowdown too, with investment banking revenue dropping 49% from a year ago. Morgan Stanley’s overall revenue and earnings topped analysts’ forecasts though, while Goldman Sachs posted revenue also missed Wall Street’s targets. Goldman Sachs disclosed in a regulatory filing last week, however, that this division has lost more than $3 billion since 2020.

☆ Goldman slams into unwelcome sort of volatility
▼ + stars: | 2023-01-17 | by ( John Foley | ) www.reuters.com time to read: +4 min

NEW YORK, Jan 17 (Reuters Breakingviews) - The similarities between Goldman Sachs (GS.N) and Morgan Stanley (MS.N) are drawing attention to what makes them different. Investment banking fees halved year-on-year for each, though Goldman generated roughly 50% more from deal advice and underwriting stocks and bonds than its archrival. During the decade before he took over, Goldman traded at a premium to Morgan Stanley. Separately, rival Morgan Stanley reported earnings per share of $1.26 for the same three-month period, 37% less than for the same span in 2021, and slightly higher than analysts’ forecasts, according to Refinitiv. Goldman reported a $2 billion full-year loss for its new “platform solutions” division, which includes the credit card it offers alongside iPhone maker Apple.

☆ The Davos party returns, with the shakes
▼ + stars: | 2023-01-16 | by ( Lauren Silva Laughlin | ) www.reuters.com time to read: +4 min

DAVOS, Switzerland, Jan 16 (Reuters Breakingviews) - There’s a hangover happening in Davos even though the party hasn’t yet started. The World Economic Forum’s annual winter shindig in the Swiss mountain resort, which kicks off on Monday, marks a return for glitzy parties and high-minded debates following a three-year hiatus. A record number of business leaders are set to make the trip, and the passage of commercial, private and government aircraft through Zurich’s airport suggests overall attendees are at pre-Covid-19 levels. The global pandemic and Russia’s invasion of Ukraine have added more friction to the already creaking globalised world that Davos epitomised. Follow @thereallsl on TwitterloadingCONTEXT NEWSThe World Economic Forum will take place in Davos, Switzerland from Jan. 16 through Jan. 20.

☆ Chip Outlook Depends on Tech Giants Not Cutting Too Deeply
▼ + stars: | 2022-11-18 | by ( Dan Gallagher | ) www.wsj.com time to read: +1 min

In what has been a confusing week for the chip industry, one thing is clear: its near-term fate may be in the hands of the same tech giants who are under a lot of pressure to slash their own costs. Quarterly results from Nvidia and a production cut warning from Micron, both on Wednesday, seemingly painted two different pictures. Nvidia managed to beat Wall Street’s estimates for its key data center and videogames businesses while also sounding an optimistic note for 2023, because of new products for both segments. Micron, on the other hand, says it plans to slash production in order to produce less DRAM memory next year than it will this year, as part of an effort to address oversupply caused by the rapid deterioration of major chip markets such as PCs and smartphones. Morgan Stanley’s Joseph Moore , who has covered Micron for more than a decade, called the move “unprecedented” in a note to clients.

☆ Analysis: European companies' robust Q3 makes timing the end of the bear market even harder
▼ + stars: | 2022-11-11 | by ( Lucy Raitano | ) www.reuters.com time to read: +4 min

Refinitiv data also shows analysts expect STOXX constituents to post quarterly earnings growth of 32.2% year on year, compared to just 4.3% for the benchmark S&P 500 index (.SPX) in the United States. Inflation has seen prices soar on the continent, but so far companies are showing they have been able to pass on rising costs. Of the 243 that have reported revenue, 80.7% beat analyst estimates, compared with 58% in an average quarter, according to Refinitiv. The STOXX technically entered a bear market in late September when it accumulated losses of more 20% from a January peak. “Our thesis at the moment is that we're not ready to say the bear market has finished.

☆ Alphabet properly preps its books for a downturn
▼ + stars: | 2022-10-25 | by ( Jennifer Saba | ) www.reuters.com time to read: +2 min

NEW YORK, Oct 25 (Reuters Breakingviews) - Alphabet (GOOGL.O) is better prepared than its ad-dependent rivals. The parent of Google reported on Tuesday third-quarter revenue growth slowed to 6% year-over-year to $69 billion, the worst performance since the pandemic. For the company run by Sundar Pichai, a looming downturn will be a little less painful. That shows up in Alphabet’s own results: Google’s search revenue for example rose 4%, while for YouTube, sales slipped 2%. Follow @jennifersaba on TwitterloadingCONTEXT NEWSAlphabet on Oct. 25 reported that third-quarter revenue increased 6% to $69 billion, missing analyst estimates according to Refinitiv.

☆ Goldman’s brainwaves are best left for its clients
▼ + stars: | 2022-10-18 | by ( John Foley | ) www.reuters.com time to read: +4 min

A strategic swerve is an acknowledgement that brainwaves are best pitched to clients than executed by the Wall Street firm itself. Jamie Dimon’s bank drops around $12 billion a year on technology, an entire quarter of Goldman’s revenue. It’s a U-turn, but that’s okay since Goldman is still a leader on the bread-and-butter Wall Street stuff. The Wall Street firm made an 11% return on equity. Revenue from fixed-income trading increased 41% year-on-year, and equities trading revenue slipped 14%.

NEW YORK (Reuters) -Citigroup took a $110 million writedown on leveraged loans in the third quarter, the company said on Friday as its Wall Street competitors downplayed their exposure to the sector. Banks have since pulled back from leveraged financing in the wake of losses taken on Citrix and other deals, as investors lost their appetite for riskier, floating-rate leveraged loans amid rapid interest rate hikes and fears of recession. “There are no real levels of loan write-down this quarter, and that market isn’t yet to clear,” Jamie Dimon, JPMorgan’s chief executive officer, told analysts on a conference call. So we’re very comfortable.”Morgan Stanley also scaled back its leveraged exposure in the third quarter. “They actually were quite modest marks, given the environment,” Sharon Yeshaya, Morgan Stanley’s chief financial officer, told analysts.

The companies said Kroger agreed to buy Albertsons for $34.10 a share in a deal valued at $24.6 billion. The tie-up comes during a challenging time in the grocery industry. The grocery industry is highly fragmented. Albertsons’ share was about 5%. Consolidation in the grocery industry has not historically paid off in the form of higher profits, he said.

Hong Kong/Tokyo CNN Business —A quarter of a century ago, a major financial crisis ripped through Asia, shaking its economies to the core. “I do not expect a repeat of the [1997] Asian Financial Crisis this time,” said Khoon Goh, head of Asia research at ANZ Research. “Importantly, there is not the same build up of foreign denominated debt in recent years, which was one of the triggers of the Asian Financial Crisis,” Goh added. China and Japan have the world’s two biggest foreign exchange reserves, holding $3 trillion and $1.3 trillion respectively. “Asia’s resilience in the face of the current global storm is partly the result of reform that the Asian Financial Crisis prompted,” Neumann from HSBC said.

☆ Analysis: Credit markets see less risk of recession, earnings may challenge that
▼ + stars: | 2022-09-23 | by ( Karen Brettell | ) www.reuters.com time to read: +5 min

“Credit spreads are too tight, they are not adequately reflecting the risk of recession. Leveraged loans and junk bonds are high-risk corporate debt. Their borrowing rates have been held in check by solid liquidity while default rates are near historical lows and not seen likely to spike significantly near-term. Earnings were better than expected in the second quarter on average, but higher rates and slowing growth are expected to make a bigger dent in profits soon, which could bring rating downgrades and higher default risk. “For now the credit market's still taking comfort from in place fundamentals and a slow pace of deterioration.

☆ ‘Astonishing.’ Morgan Stanley hard drives holding sensitive client data got auctioned off online
▼ + stars: | 2022-09-20 | by ( Matt Egan | ) edition.cnn.com time to read: +2 min

New York CNN Business —Federal regulators accused Morgan Stanley on Tuesday of “astonishing” failures that led to the mishandling of sensitive data on some 15 million customers. Since at least 2015 Morgan Stanley did not properly get rid of devices holding sensitive customer data, according to the settlement. In one episode described by the SEC, Morgan Stanley hired a moving company – one that had “no experience or expertise” in data destruction – to decommission thousands of hard drives and servers holding customer data. Morgan Stanley was able to recover some of those devices, which contained “thousands of pieces of unencrypted customer data,” the SEC said. In a statement, Morgan Stanley said it is pleased to have resolved this issue and expressed confidence that no sensitive data was exploited.

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