New signs of trouble for Goldman Sachs
Goldman Sachs, the once-mighty king of Wall Street, appears to be losing employees, market share and the confidence of investors.
One of the most outspoken Wall Street analysts. Richard Bove, announced this week that he is cutting his outlook for Goldman's fourth-quarter earnings by 66%, estimating that the bank will earn 79 cents a share.
Goldman and other banks have been struggling all year as volatile markets have driven investors away from the trading activities that Goldman and its competitors rely on for revenue. That, along with new regulations, have led many industry watchers to see a longer-term shrinking of the industry.
"People don't want to trade. They're afraid of the markets. Hedge funds are pulling back and are not aggressively in to the market," Bove told Yahoo news.
But it is not just trading where Goldman appears to be falling behind. According to a Bloomberg story out Wednesday, Goldman has also lost out in the booming new market in Chinese stock offerings. While Goldman has led the third most IPOs around the world, in China it has only led one in the last three years, Bloomberg says. This is significant because China may be where much of the market growth comes moving forward.
One culprit fingered for the bank's troubles in China -- along with the bank's caution in approaching the less regulated markets there -- is a book called "Goldman Sachs Conspiracy," which argues that the bank is set on destroying China.
The hard times appear to be weighing on executives at Goldman. Bloomberg reporters combed through the bank's findings to determine that at least 37 of Goldman's partners -- one of the most prized positions on Wall Street -- have left the firm this year, more than in any year since the financial crisis.
This comes after news earlier this week that Goldman was canceling recruiting events at Ivy League schools after facing protests on campus fueled by the Occupy Wall Street anger.
While Goldman shares are up slightly Wednesday, they have fallen over 45% since the beginning of the year.
-- Nathaniel Popper