Image credit: Citron / CC-BY-SA-3.0 Image credit: Citron / CC-BY-SA-3.0

Goldman Sachs has revealed a $2 billion loss, and part of its problem is that the markets are just to steady.


An article in Rolling Stone magazine once said: “The world’s largest investment bank is a giant vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnels into anything that smells of money.”

Well, not sure which bank he was referring to.

Goldman Sachs, on the other hand, took a $4.4 billion hit thanks to tax changes in the US. So that didn’t help.

But it also found trading conditions quite tough last year.

This may seem odd, since stock markets boomed last year like they haven’t done in years – with the S&P 500, the Dow and NASDAQ hitting new highs so often it ceased to be news.

But last year also saw a remarkable level of low volatility. The VIX index, for example, often known as the fear index, which tracks a moving average of the S&P 500, had never known a year like it. The index tracks data back to the early 1990s, up until 2017, the index had only fallen below 10 points half a dozen or so times over that quarter of a century. It 2017, it dropped below 10 over and over again. During the autumn, it fell below ten on every trading day during a three-week period. In short, the markets have never been less afraid.

That’s good for investors. It’s good for pension funds. But vampires, as you know, feed on fear, tough times indeed.