GS
#No.
Not driven by slowing activity.
Any changes in non-comp that you're seeing away obviously from the legacy charge that would have to do with impairment that we might take from time to time as the real driver there.
There are always going to be two drivers to incentive fees.
There's going to be the normal we'll call year-end incentive fees that you are used to seeing and then there are going to be fund specific events where we're above a certain performance metric and then we'll begin to recognize those fees and so this is very fund specific in terms of this quarter.
When we talk to our M&A bankers, the momentum in the advisor side of the business feels very strong.
CEOs and Boards are obviously going to incorporate all the relevant news and so not surprising to me that when you see Greece dominating the headlines and lots of volatility in the market that you might see some dip in confidence.
But in terms of the degree of conversations we're having and the activity levels, it feels quite good.
And you see that, you know, halfway through the year in announced transactions, the Investment Banking team is actually ---+ we have announced $120 billion plus of transactions, actually more than the next competitor and so the dialogue for us with our clients is pretty robust right now.
Good morning, Dick.
So you were looking at the GAAP income statement, Dick, obviously and that has a lot to do with under the GAAP rules how we have to treat certain hedges versus the portfolios we have to break out certain hedges and move them into the market making business, so it ends up being a net offset.
The hedges are hedging parts of the portfolio, so you might get a decrease in the underlying for example the income being driven by the portfolio and then you pick it up in the hedges offsetting that portfolio in the market making business.
Correct.
That may be completely unrelated to the interest component.
That's why in the script, Dick, I break out for you in the investing and lending segment, that net interest income was $225 million in the lending businesses.
To try and clarify it.
I'm happy to have <UNK> walk you through it, but it's an accounting aspect
I wouldn't draw that conclusion.
Usually the secondary activity flows for a long period of time, Dick.
I think it's hard to draw those kind of conclusions in an individual quarter.
If you look at our debt underwriting activity in the first quarter, it wasn't as strong as the second quarter but yet the FICC results were stronger and so if you look at FICC for example on a year-to-date basis, it's down but the second quarter is definitely tougher for us, Dick.
Good morning, Steve.
So obviously, there's been a whole host of discussion around liquidity in the markets, and I think in the end I think it leaves us quite frankly all with more questions more than answers.
I think you can point to some very specific parts of the market where you can say regulation has impacted liquidity.
I think the best example of that is the government bond repo market.
I think it's hard after that to point to a specific regulation and say oh, well this regulation has impacted liquidity in this market.
That doesn't mean it's not happening, I think it's just hard to quantify.
I think the repo market you can easily quantify, you can see the reduction in repo commitment from various banks, including ourselves, and you can see over quarter end how repo spreads react.
By the way, to me that looks like that's an intended desire by the regulators.
They wanted people to either reprice or shrink that business.
And so I think away from that the reason why this is difficult, Steve, is because it's a question of really what is the multi-year accumulation of regulation.
Things being pushed more electronically, inability to hold as much balance sheet, increasing RWAs, all these things so vocal.
I think these things reveal themselves over many years.
But obviously, you can't have as much regulation as we have had and not have some unintended consequences.
I think it's just the cost of regulation.
It doesn't mean the regulation is not good.
So you're right to ask that question, and the question has been coming up for the last couple years, obviously, as we've gone through this part of the cycle with tighter credit spread and lower rates.
And we talked about this, if the M&A cycle remains strong, then obviously that will be a positive tailwind for the underwriting business and it was for us.
When I said leveraged finance activity, I could've said leveraged finance activity facilitated in part by our advisory business, so the M& A backdrop continues the way it feels today.
But I think M&A will help.
Good morning, <UNK>.
I think in an effort to overly simplified this, I think healthy volatility is volatility in which client activity picks up and liquidity exists, clients feel confident.
Unhealthy volatility is the reverse of that where clients get more conservative and they derisk.
And so as we go through these periods, the general trend obviously feels like volatility is picking up in a healthy way but that doesn't mean from time to time we're not going to hit these kind of pockets.
There's nothing we're doing.
We are being pretty conservative in terms of our thought process in terms of the business.
And our risk taking is being very prudent.
It really is all about M&A activity.
Again, as I mentioned to you, I talked about the announce but when you look about the completed lead tables, obviously our team is really in the center of all the M&A dialogue.
Thank you.
Okay, since there are no more questions, I just want to take a moment to thank all of you for joining the call.
Hopefully, I and other members of senior management will see many of you in the coming months.
If any additional questions arise, please feel free to reach out to <UNK>.
Otherwise, enjoy the rest of your day and I look forward to speaking with you on our third-quarter call in October.
Take care, everyone.
Thank you.
