What's Wrong With The Following Chart… Or How JPM's Traders Humiliated Goldman Sachs

As we reported previously, for the third quarter in a row, Obama’s favorite punching bag bank – JPMorgan – reported a statistically impossible zero trading day losses.

Some suggested that since in the New Normal market in which it is virtually impossible to lose money this was to be expected; either that or just because banks work purely to satisfy client flow and have little principal risk, there is little reason for them to actually lose money trading. Both these ideas got blown out earlier today when Goldman reported that in the third quarter, the FDIC-insured hedge fund’s trading loss days soared to a total of 15 days: a whopping 23.4% of the total 64 trading days in the quarter.

While this may not seem as much, it is a veritable Mt. Everest compared to the 6 days losses in Q2, and orders of magnitude greater than the just 2 loss days in the first quarter of the year.

As a reminder, Goldman’s jump in unprofitability took place in a quarter in which JPM had zero trading losses. In fact in happened in a year in which JPM had zero trading losses. This can be seen on the following chart comparing JPM and Goldman win/loss trading days for the past year.

So what happened? Did Goldman suddenly let itself go and let banks like JPM pocket all the profits? Did Goldman let go all of its best traders and allow JPM to humiliate it where it really counts: trading revenues?

Or was this merely the latest exercise in optics by the wiliest of banks: after all, when you have an administration hell bent on punishing any and every bank that for any reason does something out of the ordinary – even if said “punishment” is merely populism-pleasing wristslaps – the last thing you want to do is add insult to injury and indicate you are absolutely flawless, as JPM continues to do and report quarter after quarter of trading perfection… and soaring litigation reserves.

Maybe this is just one of the reasons why Goldman has so far managed to slip completely untarnished through the DOJ’s punitive cracks?


via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/w0xqyegYr6Y/story01.htm Tyler Durden

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