The NY Times reported today that Goldman Sachs, Citigroup, JP Morgan Chase, and Bank of America all achieved perfect trading quarters in the first 3 months of the year. In other words -- every day in the quarter, they toted up their winnings and losings after the markets closed (note -- this never actually happens, the markets don't close for global traders, they just follow the sun around the planet), and discovered they had made money.
Every single day.
From what I can tell, this is the first time this have ever happened for even one firm, much less four.
This struck me as being pretty unlikely, to say the least. So I started to think about how to calculate the odds. Turns out, someone else had beaten me to the punch -- see "More On Goldman's "Perfect Record".
According to his calculations, the odds on this happening for one firm are 8.67 x 10-19. That's not very good odds, to say the least. 8.67 times in 10,000,000,000,000,000,000, compared to a rough chance of 1 in 500,000 of getting hit by lightning walking down the street. That's a million times less likely than a one-in-a-trillion chance. If you take the odds on this happening, again for one firm, and spread them out over the approximately 936 possible quarters since the founding of the US, you end up with something like close to 100,000 times less likely than a 1-in-a-trillion chance.
Not what I would call gambling odds.
But the whole point is that it didn't happen for one firm. It happened for four. At this point we're way past my willingness to count zeroes ...but I don't think the odds are better.
Seems to me that the banks could give the casino boys in Vegas some lessons about how to set up the house odds.
And it seems that we still can't figure out why the markets did their plummet/climb last week (other than all the buyers ran away at the first sign of trouble).
Gotta love "free" markets ...
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