My understanding is that market stability is a good thing, because it allows more reliable estimates of profits (revenues minus expenses) and expected return-on-investment related to new investments.
But in a recent article about Goldman Sachs' 4th quarter losses, with a 75% in commodities trading revenue as the greatest factor.
In the a BBC article, the firm reportedly framed the losses as:
Goldman has blamed the problems on unusually calm markets, which can dampen demand from clients looking to take advantage of fluctuation.
Executives have pledged to improve the business, which accounts for a large portion of the firm's overall revenue.
Investors, however, are growing impatient.
SOURCE: Goldman posts first quarterly loss in six years (BBC)
- In which contexts are stable markets sub-optimal?
I'd also be interested in information how firms and governments can work to destabilize markets to create profit opportunities.