Preferred customers: Presidential hopeful Ted Cruz has in the past week been answering questions about a loan he got from Goldman Sachs in 2012. But Reuters reports he is far from alone among Republican candidates in having a financial relationship with the Wall Street investment bank in recent years. A Reuters analysis of the financial disclosures of the 12 Republicans left in the race to be the party’s candidate in the November presidential election shows that funds run by Goldman have been a favorite investment destination for them. It shows that the Republican candidates and their spouses collectively held 57 Goldman investments, that is more than double the 28 they had from the second most popular source, Vanguard Group, which is one of the world’s largest investment management firms. Read the full story.
Trickling down: Wall Street pay took a hit in 2015—a trend that may only worsen this year. As USA Today reports, Goldman Sachs announced this morning that 2015 compensation was flat from the year before. But the money was shared by thousands more people as staff increased by 8%. As a result, the average paycheck in 2015 was reduced to $344,510, down from $373,264 in 2014, according to the company’s earnings report. Brokerage firm Morgan Stanley, meanwhile, says it cut compensation and benefits by 10% while its workforce grew by 1%. Citigroup’s compensation costs declined 9% as total staff shrank by 4%. Read the full story.
The long and short of it: Last year was the most profitable ever for short sellers, by one measure. And Bloomberg reports 2016 is starting off even better for bears. It’s no secret that betting on declines is proving profitable in what has been the worst start to a year ever for global stocks. What is surprising, according to research firm Markit Ltd., is that returns for shorts are even higher than those generated during the 2008 financial crisis, when considered on a relative basis. In the U.S., Markit found, the most-hated stocks—the top 10% most costly to short—underperformed the market by a record 26% in 2015. In 2008, they trailed by 19%. Those shares are now on track for the worst month ever—or the best ever, from a short seller’s perspective. Two weeks in, they’re already trailing the market by 6.7%. Read the full story.
