Mid-Morning Links: This is not turning out to be a great year

Anyone who was hoping for a replay of 2009 is going to be disappointed. With second quarter results fast approaching, banking analysts are falling over themselves to warn of nasty slowdowns.

Hence, analysts at Goldman Sachs are predicting that sales and trading profits fell 19% q-on-q in the second quarter, while investment banking profits fell 20%. They also think that capital markets profits fell....40%.

Dirk Hoffman Becking, analyst at Sanford Bernstein is equally pessimistic. Yesterday, he cut his EPS estimates for European banks by 19%, saying that higher volatility is forcing banks to cut risk and that the medium to long term outlook in investment banking, "appears bleak."

Goldman analysts attribute the poor trading results almost entirely to commodities and credit desks, where volumes are down and risk aversion is up. Alongside volatility enforced risk reduction, Hoffman Becking points to liquidity constraints, which he thinks will make it difficult for banks to dispose of assets.

Goldman Sachs will be hit hardest by regulation. (Telegraph)

Richest 10% will be hardest hit by the budget. (Guardian)

Four reasons why M&A will ignite, soon. (Telegraph)

Andrew Hall has raised $1bn for an offshore commodities hedge fund. (Reuters)

Deutsche: still bleeding senior US natural resources bankers. (Businessweek)

Bob Diamond needs to be kept on a tight leash. (Bloomberg)