The muppet slaying shall continue until no clients remain.

From April 10, via Francesco Garzarelli, two weeks into Q2:

Our recommendation to be short 5-yr Spanish bonds (Oct-2016) against their Italian counterparts (Sept-2016), initiated on March 14 at a yield differential of -6bp, is now at -24.9bp, against our target of -50bp. We would now close the trade, with a potential period total return of 0.35%. in light of the re-pricing that has already occurred, we advise investor to close this particular trade as markets tensions originated on concerns over Spain are now also affecting Italian rates and we do not see much more room for Italian rates to further outperform Spanish ones.

And of course this from June, which just happened to be was a tag-end in June:

We recommend being long an equally-weighted basket of benchmark 5-year Spanish, Irish and Italian government bonds, currently yielding 5.9% on average, for a target of 4.5% and tight stop loss on a close at 6.5%.

In other words, Goldman advised clients to be buying Italian bonds exiting Q1 and heading into Q2, as well as exiting Q2 and heading into Q3.

Enter the company's Q2 10-Q filing. Via Bloomberg:

Goldman Sachs Cut Italy Debt Holdings 92% Last Quarter Goldman Sachs Group Inc. (GS), the fifth- biggest U.S. bank by assets, cut its holdings of Italian sovereign debt by 92 percent in the second quarter after boosting them in the first three months of the year. “Market exposure” to Italian government bonds fell to $191 million at the end of June from $2.51 billion at the end of March, the New York-based firm said in a quarterly regulatory filing today. Goldman Sachs also increased its credit-derivative positions on Italy in the quarter, pushing its total market exposure to Italian government and non-government securities to negative $977 million from positive $2.4 billion in March.

And there it is again: Goldman was telling its client muppets to engage in precisely the opposite action of what its own prop traders were actually doing. Because as Goldman itself was selling Italian bonds with both hands, it was telling the remaining muppets to buy Italian bonds, as a hedge to a short Spain position (incidentally, a pair trade on which Goldman also lost money as it was buying Spanish bonds). If nothing else, it sure makes us feel better about the 15th consecutive long "EURUSD" fade of Tom Stolper. He has never let us down in the previous 14 times. We are confident 15 will again be the charm.