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Wall Street Whispers: Goldman, Finreg, Euro Woes

Who's doing worse than Goldman? European banks, apparently. <I>TheStreet's</I> Lauren LaCapra weighs in on the latest Wall Street scuttlebutt.



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Editor's Note: This is the first edition of a new column at TheStreet, called "Wall Street Whispers." It will take a look at what various media -- news sites, blogs, notes from analysts and investment firms -- are buzzing about, and run down the latest chatter we're hearing about Wall Street.

More than Soccer: Euro vs. U.S.

The World Cup festivities of late come in stark contrast to the bloodbath that's going on with European banks.

Even when compared to U.S. names -- which have also taken a nose dive in recent weeks -- most of the Eurozone titans have done a lot worse. I use mid-April as a reference point for comparison, since it predates charges against

Goldman Sachs

(GS) - Get Report

, the flash crash, finreg's passage through Senate and the time when Eurocrisis 2010 really got into full swing.

Since the close of April 15,

Deutsche Bank

(DB) - Get Report


Banco Santander



Credit Suisse

(CS) - Get Report



(BCS) - Get Report



(UBS) - Get Report

are all down at least 25%.

BNP Paribas

is the only stock that has held up "well," if losing 20% can be considered a good thing.

Meanwhile, all but one of the Big Six U.S. banks have dropped in a 15% to 20% range. You can guess which one is the outlier, and what it all appears to mean: Investors have lost more faith in European banks than they have in Goldman Sachs.


A report over the weekend from the

Bank for International Settlements

shows why. Lenders in France and Germany have extended $1.6 trillion to Spain, Greece, Portugal and Ireland - four of the most worrisome nations in the Eurozone. Meanwhile, the other two countries that comprise the debt-laden group of "PHIIGS" - Italy and Hungary - were either

stoking more fear


doing damage control


But one has to wonder whether fears are overblown. Healthy Eurozone nations extended an enormous bailout package in May, making it clear that they won't let their fiscally irresponsible brethren capsize the entire ship. The Eurobums have finally gotten around to taking harsh measures to fix their balance sheets, making it clear that change is a'coming. Finally, a report on Monday showed that EU nations' productivity is a lot better than the market had expected, making it clear that, despite all the fear-mongering and doomsday rhetoric, things on the ground aren't quite as bad as they seem in the headlines.

So it might be an interesting time to buy Eurobank stocks after all. As for Goldman Sachs ...

Hey Goldman, SEC: Get On With It Already!

The less that happens with the Goldman-SEC charges, the more that's


about what's happening.

If you take the Wall Street whispers at face value: The SEC is at loggerheads with Goldman over admitting guilt, a settlement could

cost the firm as much as $20 billion, and Goldman is either settling or stubbornly refusing to settle on any given day.

Oh, and the Justice Department is digging around, too. And the Financial Crisis Inquiry Commission. And everyone in the financial press.

None of the various reports cites new information coming directly from Goldman or the SEC (at least

not openly

.) A

TheStreet Recommends

New York Times

editorial demanding to know just

what else Goldman is hiding

in its fancy schmancy coiffers got a lot of attention, but it doesn't cite any new information at all. It simply speculates that Goldman is doing something wrong and hiding things because it provided too many documents for the FCIC to look through.

Draw your own conclusions there.

Meanwhile, Goldman's

reputation is getting knocked around from all ends: Respected

financial journalists

, opinion columnists,

"ordinary" people

who didn't much like Goldman, et al, in the first place, and even the

folks on Wall Street

who purportedly know better.

Whether or not clients have taken their money and run is unclear, though various government entities have ended relationships with the firm. (Then publicized it.)

On a similar note, Goldman was recently

shut out of

GM's initial public offering. Take from all that what you will, but its share price has been hammered more than any other big bank.

Both sides appear to be failing in their respective image campaigns: The government is flailing around, looking less like Wall Street's tough cop than it did before the charges were filed. Goldman looks like it's weak enough to get beaten up anyhow.

I'm just throwing it out there, but one side might want to say or do something to strengthen its hand -- and perhaps get the whole thing over with -- while people are still eager to hear about what's actually going on.

Daily Dose of Finreg


I don't put much credence into the anonymously-sourced stories (or the sources whispering to me) about what's going on with finreg. It's just one side battling the other for space in the financial press.

Nonetheless, it's interesting to watch the show.

Derivatives regulation is the key issue for not just banks, but their trading partners. The

Financial Times

is saying that banks will end up

losing their swaps desks

entirely. Others are taking a

more nuanced view.

Meanwhile, there's apparently a whole bunch of lobbyists doing their job. (Whether you'd like to call them

a "swarm"

, a

"tempest" that "engulfs"

or merely a

"quirky crowd"

is up to you.)


Associated Press

took a look at

the latest happenings with all the key measures

over the weekend, something

I did last week as well. If I were a bettor -- though I'm not -- I wouldn't put my money on any specific outcome until there's a document awaiting signature on President Obama's desk.

Odds & Ends


There are a few other things I'm paying attention to this week, some of which will get a more in-depth look in the near future:

The huge, scary commercial real estate bubble that was about to burst but never did.

The fact that the ginormous Fannie Mae and Freddie Mac bailout is finally getting some attention in public dialogue, if not in Washington.

Our ongoing analysis of Main Street vs. Wall Street, as it applies to what's going on in the sector.

-- Written by Lauren Tara LaCapra in New York