Citigroup’s simple message about trading: it’s getting worse
Is it time to panic yet? The trading business on Wall Street is continuing to get walloped. Indeed, Citigroup chief financial officer John Gerspach just told attendees at a conference that the bank’s second-quarter revenues from trading stocks and bonds may plummet by as much as 25%, compared to the same quarter last year.
Why? Pretty simple really. Markets have been calm lately. (Low volatility.) And, as a result, there hasn’t been a lot of trading activity. (Low volume.) As a result, banks trading revenues are likewise, low.
“Historically low volatility, an uncertain global macro environment and geopolitical events have all combined to drive volumes lower,” Gerspach told conference attendees.
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What’s not clear is exactly what’s driving the downturn in volatility and trading activity. For his part, Gerspach had a simple explanation: Nobody knows what to do. “In order to create some level of volatility there needs to be people on both sides of a view. Right now I don’t think people even know what view to be on either side of,” Gerspach said, adding, “It’s just a market that is becalmed.”
http://qz.com/214025/citigroups-simple-message-about-trading-its-getting-worse/
Volatility might be the banksters' friend, but it is most assuredly not a friend of the 99%
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