Friday, March 19, 2010

Barney Frank talking about prop trading (GS)

I give him credit, he's absolutely right.  I'm just not sure that proprietary trading is the big threat people think it is.

Barney Frank was on CNBC a few minutes ago, saying that you can get an idea of a firm's proprietary trading by looking at volume.  He says that a bank that does huge volume is "almost certainly not doing it for clients."

Agreed.  Here's the chart from Goldman Sachs' 2009 10k showing their blowout trading days, that showed trading revenue of greater than $100million on 131 days last year:

If Goldman is prevented from prop trading, they'll have to go back to plain vanilla investment banking.

Watch out if that happens. From a previous post of mine:

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