See WSJ article, p C1 & C2 today on the potential impact of the SEC investigation of Cartel King Pin-SAC
According to the WSJ, SAC annually generated $1 BILLION in trading commissions, financing fees, and an array of pay outs to over 100 sell side research firms and banks. Across the biggest banks, equities trading and financing fees from SAC could run to $500 MILLION ANNUALLY. Of the big investment banks some of the top beneficiaries of the SAC commissions were Goldman Sachs, Morgan Stanley, Deutsche Bank and JP Morgan. Goldman took in over $100 million a year from SAC.
Verrrrrrrrrrrry Interesting, Verrrrrrrrrrrry Interesting, indeed!
Up until 2 weeks ago when DB finally went to buy on STX: Goldman, JPM, Morgan Stanley, and DB had all been neutral on STX as it ran to record highs. For years, JPM and Goldman had been the primary permibears on the drive space and Morgan Stanley was one of the two firms that published a questionable channel report last May which the chart monkies used to run STX down from $31 to $21. FYI, both STX and WDC contested those reports publicly, see Luzco comments in Barrons article about bank Analysts spreading FUD to generate volatility and trading profits for their firms.
Those who pay the piper call the tune!!!!!!!!!!!!!!!
Might also explain why the drive stocks now are finally breaking out?
OH WHAT A TANGLED WEB WE WEAVE WHEN FIRST WE PRACTICE TO DECEIVE!
"Goldman, JPM, Morgan Stanley, and DB had all been neutral on STX as it ran to record highs"
Don't forget the 17 others firms still at neutral or sell.
Is it arrogance or are they holding a grudge for being called out?
I refer you to the comments made in a Barrons interview last April by STX CEO and former Bear Stearns I banker, Stephen Luczo, that echo my sentiments:
"Because the drive stocks are not being priced on fundamentals, they being priced by large investment banks for volume, and volume requires volatility"
"So that's why all the big firms are in a different camp than the smaller research firms on their perspective of the drive industry. Is it because these are the smart guys, and those aren't? That doesn't make any sense. It is because the banks are MOTIVATED by volatility and the boutique firms aren't. And therefore the research reflects that. So you can create and environment that always creates doubt, with billion dollar market cap swings in a week. It's insane. Why does it work? Because you have traders who love to make that work"