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    The Call @ Hedgeye Plus

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Below we have attached what we think is a very noteworthy "Trade" developing in the US market. What is bad for GS and MS stock prices has not been a leading indicator for downturns in the broad indices (see the 3 week overlay chart below of GS vs. SPY). The US market was strong on Friday, while Goldman’s stock miserably underperformed. This performance divergence matters. The “New Reality” is finding clearing prices.

Goldman has already lost another -9% today, and the talking heads like David Faber at CNBC are saying whatever it is that they say. Marcus Goldman can't be smiling down on how this story is starting to unwind. Taleb’s “narrative fallacy” is alive and well in terms of the media seeking explanations as to what is going on here. How about this: GS and MS are now bank holding companies who cannot earn 2007’s returns, ever again.

When Chris Cox and his cronies banned short selling, they were only postponing this inevitable fundamental realization. Shame on them.