Goldman Blow Out Q2 Revenues On Principal Trading; VaR Hits New All Time Record: $245 MM Total VaR

Tyler Durden's picture

As if anyone expected less than one of the most ridiculous beats ever.

Some amusing Q1 over Q2 comparisons:

  • Equity Underwriting: $48 million vs $736 million
  • Equities Trading (not commissions): $1,027 vs $2,157 million
  • Total Trading and Principal Investments: $5,706 vs $9.322 million
  • ICBC: ($151) vs $948 million

Notable: VaR hits what looks like another record high at $245 million, higher by $5 million from the last March record. Also, the fudge "diversification factor" is almost at $100 million: excluding it the company has a VaR of almost $345 million. One can barely hold their breath to see the number of $100 MM+ trading days in the quarter.

Also, for those curious what comp will be like at Goldman, here is some color:

Compensation and benefits expenses (including salaries, estimated year-end discretionary compensation, amortization of equity awards and other items such as payroll taxes, severance costs and benefits) were $6.65 billion, which was higher than the second quarter of 2008, primarily due to higher net revenues. The ratio of compensation and benefits to net revenues was 49% for the first half of 2009. Total staff decreased 1% during the quarter.

FYI: $6.65 billion for the quarter, $4.712 billion for Q1, annualized this is $22.7 billion, divided by 29,400 employees, means an average comp of $772,925/employee. Enjoy, dear taxpayer.

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Screwball's picture

Great!  Let them bailout CIT, we taxpayers are broke.

Anonymous's picture

What an utterly shameless bunch of folks at Goldman Sachs ? Are people really proud of their work there ? This article sends shivers :

http://www.bloomberg.com/apps/news?pid=20601087&sid=aw9_Nm1JhIV0

Anonymous's picture

Goldman Decision to Boost Compensation Raises Lawmaker Concerns

By Catherine Dodge

July 14 (Bloomberg) -- Goldman Sachs Group Inc.’s decision to boost compensation and benefits by 33 percent after posting record earnings is raising concern among Democratic lawmakers in Washington.

“I join the American people in being pretty incredulous about how they operate,” said Senator Sherrod Brown, an Ohio Democrat. “It really makes the American people think is it just going to be business as usual with Goldman Sachs and much of the rest of the financial industry?”




http://www.bloomberg.com/apps/news?pid=20601087&sid=aw9_Nm1JhIV0

Screwball's picture

I live in Ohio.  I wrote to Brown about the original bailouts that Goldman was a part of.  I can't find the reply letter or I would post it.  It was a typical letter I'm sure everyone that wrote him recieved.  He defended the bailout because of systemic failure of the banking system and our economy.

I also explained if he did in fact vote for it (which he did) I would never vote for him again.  And I won't.

At this point, Mr. Brown, your a year late and we're how many billons short?  Screw you, your statement in the Bloomberg article is as lame as your reply to me.  I hope your political days are over.

Head to 85 Broad Street NYC, I'm sure they will give you a job.

Anonymous's picture

As Elliot Spitzer says, Goldman Sachs making record profits by trading and the entire bailout of wall street with trillions of dollars is not going to create jobs that is needed for the economy. There is a complete disconnect of who got bailed out and who creates the jobs. The wall street of today does not create jobs, they hoard money for themselves with a in-your-face mentality.

Anonymous's picture

walk up to a GS employee and ask for some of your tax money back.

Arm's picture

A very dumb, dumb thing to do.  Greed has now killed GS.  They will need a new bailout when liquidity freezes again (say September), and this will come back to bite them. 

Anonymous's picture

So when the oil industry started making this amount of money, they were brought before Congress for making "excessive" profits. Why are we not lining these guys up for the same show trial? So glad they're a depository now.

Anonymous's picture

Once upon a time you dressed so fine
You threw the bums a dime in your prime, didn't you?
People'd call, say, "Beware doll, you're bound to fall"
You thought they were all kiddin' you

Anonymous's picture

So if GS is making all this money from trading, which is a zero-sum game, who's losing? Other big players like JPM or MS? Sovereign funds? Retail individuals?

Anonymous's picture

Americans are losing. This parasitic drain on the economy while not producing anything of value is what broke the economy in the first place.

Anonymous's picture

The taxpayer is losing. The banks are capitalizing themselves from the people who are still short the sector.

Anonymous's picture

Why not treat Goldman shares as Treasury notes, because that's what they are.

VAR has no meaning when it comes to this firm and, since it is a proxy for the regime, no meaning, period.

It's what I've always said: what we have had is not liquidity, but rather faux liquidity.

What's your problem with saying we have entered the phase of a corporatist economy? It seems very clear from the facts.

And don't worry--that doesn't mean you have to pick up a gun. Mussolini did it, and no one did a thing. The only one who had to flee was Sraffa.

Does it mean we're gearing up for the economy to simply topple over dead? Of course!

But on what day/month/year? Answer please.

Miles Kendig's picture

The fed & treasury cheers because their efforts to recapitalize the banks through the back door is working so well.  I have to wonder what additional efforts at regulatory forebearence will be in place this time in October?

Anonymous's picture

I thought this was good ...

... What's up with the mainstream media acolytes who keep
aluding to the genius of Goldman Sachs?

What genius?

If it wasn't for their former CEO Hank Paulson bankrupting
their competition (Bear and Lehman) and then extorting
Congress behind closed doors under the threat of martial law,
they wouldn't even be in business today.

Does having your former CEO being able to choose who among
your competitors lives, or dies, make you a genius?

Does having your former CEO bail you out via the backdoor
of AIG, make you a genius?

...
http://www.sliderontheblack.com/politics-money-and-markets/the-genius-of...

blockbuster's picture

Really disturbing how GS is able to make so much prop trading.

Anonymous's picture

Its easy when you have the right software.

Anonymous's picture

hopefully goldman's outrageous profits come from taking enormous risks like selling naked out of the money options and using embedded leverage with a small chance——but a good one——of blow up...but probably what will happen is the also-rans will lever themselves up believing that that is how goldman made all their cash and goldman will just be buying CDSs on them and fuel the bubble until the point when everybody is hopping in on it——then they'll gun the bubble collect the cash after orchestrating a bailout on their counterparty.

i want to dice the entire financial system into inconsequential local bits with capped capital and capped leverage and that'll cap their compensation. then the fuckers wouldn't have the clout to manipulate the market——no more big fish that have to devour to survive.

Anonymous's picture

They were free to take huge risks. If they failed, they are assured the gov't will step in and bail them out again.

It should have all been sliced and diced and parted out to local bankers to run.

Ned Zeppelin's picture

Truth be told:

Chumbawamba Rule #1:  Huge variations from the norm among a peer (or "sector") group in terms of financial performance,  which are "reported" as opposed to "observed" (in the sense of being objective) are, in one shape or another, either (1) lies, (2) evidence of criminal behavior, or (3) complete and utter coincidence. You can pick the one you like for Goldman Sachs, but a combination of 1 and 2 get my vote. 

Chumbawamba Rule #2:  Sooner or later the truth comes out.

He is Chumbawamba.

 

agrotera's picture

OK, let's all take a trip down memory lane to September 2008--Lehman, Merrill, Morgan and Goldman were all GOING DOWN, remember?

But, thanks to the fact that Lehman was told "BYE BYE" by ole golden hank & ben, GS, and MS won that trade--with shorts, and credit default swaps--and how great, two days after Lehman was denied a 6billion bridge loan, AIG was GIVEN 85Billion so that Goldman Sachs could have their 13 BILLION back in collateral ASAP to prevent them from going the way of Lehman and Merrill.

And Merrill gets the corrupt bargain--a bankrupt company getting 0.80shares of BAC, a cash cow--God, if only all this could be viewed wholisticly, i really think there would be restitution for the BAC shareholders, and the US TAXPAYERS THAT HAVE FOOT THE BILL TO KEEP THESE IDIOT INVESTMENT BANKS ALIVE.  WTF, WE OFFICIALLY HAVE A BANANA REPUBLIC BECAUSE NO ONE WANTED TARP BUT ALL THE IDIOT NON-REPRESENTING ELECTED OFFICIALS VOTED FOR IT ANYHOW--WHAT IS GOOD FOR THE PRIVATELY HELD FEDERAL RESERVE IS WHAT OUR ELECTED OFFICIALS WILL DO SINCE THE FED IS THEIR DADDY.

How f#$%^^&* great, Goldman Sachs is making tons off of their inside deals knowing what the presidents working group is doing while borrowing money for nothing.

Where is Andrew Jackson when you need him?

Anonymous's picture

Bill O'Reilly just discussed "The Rolling Stone" Article regarding Goldman Sacs.

Anonymous's picture

AIG was providing coverage similar to the Financial Guarantors - CDS on CDOs.

When the FG's settled their transactions, they settled them for 60 cents on the dollar.

AIG? 100 cents on the dollar. Hmmm.

http://money.cnn.com/news/newsfeeds/articles/djf500/200808011105DOWJONES...

Ambac canceled its Citi CDO by paying Citi an $850 million fee, which is less than the $1.4 billion it may have ended up paying if more loans defaulted.

agrotera's picture

For anyone interested in looking at how improper the AIG save by paulson&bernake was, consider this-- goldman sachs, and morganstanley were both going down just like AIG, but by giving 100cents on the dollar, and by letting all those betting against Lehman to win their bet (shorts and CDS's) this helped their solvency.

 

The only way to determine whether the "save" on AIG was selfdealing or not on by paulson/bernake was to audit GS and MS retroactively to September 14th, 2008 and take a look if the Lehman loss enhanced their position or not--this is a no brainer, but, still, our country is brain washed into thinking the investment banks had to be saved to save the world--GOD WHAT A NIGHTMARE!!!!!

Anonymous's picture

I think GS is getting insider information from the folks at the top of the regulatory food chain and other sources. I find it hard to believe that any company can beat the odds so frequently and successfully in good times and bad times. Or maybe they do have a Wizard of Oz behind the scenes no one knows about.

I don't know about you, but I have come to the conclusion that Wall Street and the markets are big Ponzi schemes and the only people making money are the ones working on WS and the markets and funds, and we the investors are getting shortchanged and bled dry to make the boys (and gals) at GS and other places rich. I'm getting poorer and others are getting rich from my heard earned money.