The Rape of Monopoly as Line Charts

Posted: 12 May 2010 by Sayyid in National News
Tags: , , , , , , ,

Goldman Sachs, JP Morgan Chase, Citigroup and Bank of America all completed the first quarter without one losing day.

Four of the largest banks in the U.S. “racked up perfect quarters in their trading businesses between January and March, underscoring how government support and less competition is fueling Wall Street’s revival”, David Mildenberg and Dawn Kopecki reported at Bloomberg yesterday.

Goldman Sachs, JP Morgan Chase, Citigroup and Bank of America all posted gains every day of the 63 in the quarter from January through March.

“Tyler Durden,” the pseudonymous Zero Hedge founder posted this chart on Goldman’s quarter, stating, “If you ever wanted to see what monopoly looks like in chart form, here it is:”

He added:

The statistic probability of this event is itself statistically undefined. Goldman is now the market—or, in keeping with modern market reality, Goldman is the house, it controls the casino, and always wins….

Adding to the alice in wonderland insanity of this announcement, the firm made over $100 million daily on 35 different days. Of Goldman’s $9.7 billion in total Q1 revenue, 76% came from trading. Forget investment banking, forget underwriting, forget advisory: over three quarters of the firm’s value is based on being the house to the biggest corrupt casino in existence. Ever.

Yesterday, he added:

that the rape and pillage of the middle class was not isolated to Goldman, and that JP Morgan also had a flawless quarter. And if the odds of Goldman making 63 out of 63 are virtually impossible in any universe in which risk goes hand in hand with return (but in those in which monopolies are encouraged and bailed out), the coincidence of the two main firms that control the world having a perfect track record is impossible. And since things in reality tend to be zero sum, when everyone makes money, someone may be tempted to ask the question, just who is losing money? And the answer, dear taxpayers, and [Goldman|JPMorgan] clients, is you.

Of course, it shouldn’t be ignored that Morgan Stanley did suffer losses in days of the quarter—four days:

Joe Weisenthal commented at Business Insider today:

If you don’t know how the banks can do this, you haven’t been paying any attention. It’s the Fed lending these banks money cheap allowing them to lend it back to the government at higher rates? Is that really all the banks are doing with their money? Pretty much yes.

From the St. Louis Fed, here’s the total volume of government securities held on bank balance sheets. The number is only going in one direction.

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