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Is that borderline sick, or maybe more stupid?
OH OK EDIT : YEAH MY DAD BOUGHT AND SOLD FOR ME.. why is this a big deal?
First reaction to Goldman Sachs earnings: Wow! Goldman had -- surprise -- a really good quarter. Wait a minute -- did I say really good? I mean really, REALLY good. The company blew the doors off the dump. It smacked a towering home run over the long fence in center field. The AP crowed:
The New York-based bank said it earned $3.39 per share, easily surpassing analysts' forecasts for profit of $1.64 per share.
Hell, when a ballplayer crushes the pitch like this, you might assume he’s on steroids or something. Hmm. Hold that thought. Let’s number-dive the Goldman earnings.
Total net revenue (all reference to revenue after this will be to “net”, fyi) was $9.4 billion. Profit was $1.66 billion. Good so far. Now let’s look at a few segments to see what drove this crazy-good news.
Investment banking? Well, no, that was only $823 million in revenue, down 30 percent from a year ago (and even 20 percent lower than the horrible last quarter of 2008, when the company as a whole lost $2.29 billion).
Okay, okay, it’s something else. Let’s try principal investments! That’s where Goldman should really shine: lots of smart guys putting its money at risk, making big scores in the market ... er, well, hold on, that lost $1.41 billion in the first quarter. Geez, that ain’t it.
Asset management? Okay, it’s not really sexy, but who knows? Oops, dead end. That category fell 29 percent to $1.45 billion in revenue. What’s more, it even dropped 17 percent from the disastrous fourth quarter of 2008. So that isn’t the answer, not at all.
Stumped? Okay, no more teasing. It’s the FICC division. Its contribution was huge: $6.56 billion in revenue for the quarter! FICC rocks! You go guys!
Uh, what’s FICC anyway? Well, it’s Fixed Income Currency and Commodities. So that group must have just made a whopping bunch of super-smart bets on the bond market or currencies right? But hold on a second: that's AFTER it made a huge amount of stupid bets in the fourth quarter of 2008 (when FICC lost $3.4 billion)? Let’s try to imagine this ... uh, it’s really hard ... uh, I’m not seeing it.
Here’s an alternative scenario: When taxpayers shoveled tens of billions of dollars into AIG, the giant failing insurer turned around and shoveled it right out the back door to certain large counterparties for its derivative trades (credit default swaps). Goldman Sachs received $12.9 billion. That money winds up in what category? My preliminary research leads me to conclude almost certainly FICC.
Irony alert: If you have high sensitivity/allergy to irony, please stop reading now.
Originally posted by GreenBicMan
im so tired of these Roubini, Whitney, Mayo comments etc... they are preying on their side of the short..