The rate increases have been going on for quite some time, and it really hasn't had an impact. And in the case of Goldman, you still have sustainable core revenues up very strong.
These guys are global companies. Goldman has half its revenues come from outside the U.S.. They can find profits wherever they need to.
When they say more than half, we're thinking most.
Our estimate of $340 million in advisory revenue easily places the quarter as the highest for the firm post-bubble, and should move 2005 advisory revenues about 28% over the prior year.
Its track record is outstanding, they've earned tens of billions of dollars over the last several years and they've never come close to having a negative trading line. I'd say that's reasonable risk-reward.
Asset management acquisitions are safer, in our view, given the predictability of earnings, although they will likely be more expensive than banks or consumer finance companies.
The franchise itself is doing quite well.
It's in last place with no real assets to improve their position. Discover desperately needs to have an improved value proposition for the cardholders. That's where it all begins.
This is the first quarter in a long time where you will see year-over-year comparisons that are negative. And we'll probably see results for most of the quarters in 2005 being down on a year-over-year basis.
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