Has anybody seen Lloyd Blankfein?
About 15 months after Goldman Sachs called for a break-up of its chief rival JPMorgan Chase, a prominent bank analyst has taken Blankfein’s bank to task, saying the chief executive has presided over a “lost decade,” piling money into money-losing operations and trailing the broader market.
Goldman’s stock is down 19.6 percent while the broader S&P 500 Index is up 47.5 percent from the end of 2006, Dick Bove, analyst at Rafferty Capital, pointed out in his note.
“It is not difficult to understand what happened to Goldman Sachs in the past decade,” he wrote. “The industry it services was dramatically restructured. The company was not.”
The critical note comes less than a week after Blankfein’s firm reported one of its worst-ever quarters since going public in 1999. Profit dropped 60 percent year over year. Bond, currency and commodity trading, which the bank relies on for profits more than its peers, fell 47 percent.
Blankfein previously has said that Goldman is a “technology company,” and the bank is reportedly making deep cuts to expenses and head count.
It also revived last year’s feud between Goldman and JPMorgan, which is the largest US bank by assets. In January 2015, Goldman put out a research note saying that JPMorgan would be worth more if it broke up into pieces.
Jamie Dimon, JPMorgan’s CEO, rebuffed that call the next month, saying he’s “not going to follow the lemmings off the table,” and sticking with his one-stop-shop business model.
“In a capitalist world, OK, you better be giving the customer more — better, faster, quicker — or you lose,” Dimon said at the bank’s investor day last February.
Since then, markets so far have sided with Dimon. Since the note was published, Goldman’s stock is down 12.3 percent. JPM’s is up 5 percent.
“They’re losing market share in trading,” Bove told The Post in a follow-up call. “This is their primary business. They have just not functioned effectively throughout this period.”
The Bove note was prompted by Goldman execs telling investors on quarterly calls that they’re running the bank for the long term, even as earnings have stayed relatively flat for the last five years, he said.
When asked why he picked Dec. 29, 2006, as the starting point to measure Goldman’s stock price — near the high point for that year — he said the starting date doesn’t matter.
“Take another time frame. It doesn’t change the point,” he said.
Goldman’s stock fell 1 percent on Monday, to $165.09.
Goldman and JPMorgan declined to comment.