Lloyd Blankfein was interviewed on Bloomberg today and I though he made some salient points. One thing that I thought he was right on about was the fact that while everybody is predicting dire returns on equity for financials including the investment banks, Goldman Sachs (GS) had a 12.2% ROE in the first quarter despite a very lackluster economic environment. He referred to first quarter conditions as a “lower third-quartile opportunity set.” I don’t see any reason why GS can’t average a 15% ROE across the economic cycle and buybacks at the current stock price are quite attractive.
Blankfein is also a little more bullish on the economy than many people are. Enjoy the article: