Friday, November 6, 2009

Two Sided Coins At Goldman Sachs

Goldman Sachs our with their 10-Q on Thursday. The usual we rule the world. We run the government. Obama and Geithner get us our dry cleaning. Try to stop us routine. People actually read this stuff now a days not because they want to be in the know, but they are looking for more vulgar displays of sheer greed and power. Let me tell you. You won't be disappointed this quarter with the goose. Its real Bonfire Of The Vanity's stuff. The first one which is staggering is that Goldman lost money on just one trading day in the 3rd quarter, making money on all the other 64 days! If you remember from their 2ND quarter 10-Q, they dared to lose money in 2 days that quarter. Put it all together and they have lost money on 3 days the last 6 months! The devil himself is shaking his head. Any more reason not to believe in normal distribution? Goldman Sachs has single handily defeated modern portfolio theory the last 2 quarters. You cant make this stuff up. Going back to our friend Satan, even he would throw a few bogeys here and there, you know, to make people believe he actually doesn't exist. These type of returns are Madoff like, the SEC must be thinking.

The other thing that is very interesting is that Goldman's VAR actually declined this quarter to $189MM from last quarters $221. So less risk = more money? Again, the rules and theories have changed. They have to totally revamp Business School Programs to these new paradigms. The VAR explanation was quite interesting that everything that happened last quarter, Goldman was on the right side of. Interest Rates went down, Goldman was on the right side. Commodities rallied, thus GS was on the right side. Volatility was low, Goldman was short that. YADA.. YADA.. YADA..

We have seen over the last few days everyone (Roubini, Faber, Soros) and their mothers predict a USD rally. Sorry folks..no bets here till I find out what side Blankfien is on.

Quite simply, Like the Medellin Drug Cartel, Goldman has eliminated the competition. Instead of machine Guns and Colombian Neck Ties its been demanding collateral on naked CDS and Hermes Neck Ties. Let me make this point. Fixed Income, Currency and Commodities or FICC to the Ferrari Folks, jumped from $1.6B in Q3 2008 to $6B last quarter. That's what happens when there is no more Lehman, Bear, or Merrill Lynch. The best part is that Goldman is overtly telling you that they are in the business of making money for themselves and their employees only. Screw the public and their customers. This is evidenced by equity commissions dropping from to $930MM from $1.2BB. Why spread the governments wealth with our customers when we can gorge on it all alone? Need any more evidence that GS is a giant hedge fund? Proprietary Equities Trading exploded from $354MM to $1.8B year over year.

Its a shell game and with two sided coins.

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