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Visualizing Goldman's Epic Meltdown

Tyler Durden's picture




 

No point in discussing Goldman's abysmal earnings. Here is the chart that says it all.

Total Revenue by Segment - this is the worst quarterly revenue for the firm in years. The biggest loser: Institutional client flow AND Prop (Investing and Lending).

In tabular format.

At least the compenstation expense margin is a nice and sold mid-40%. As for those 35,500 staffers at the end of the period: that's number is going down.

The reason for all of this - the massive collapse in VaR, as Goldman somehow loses its edge which oddly parallels the unwind of the firm's prop trading division... Gee, we wonder why.

 

 

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Tue, 07/19/2011 - 09:25 | 1469741 digitlman
digitlman's picture

Fuck these fuckers.

Tue, 07/19/2011 - 10:17 | 1469934 midtowng
midtowng's picture

It breaks my heart to see this billionaires not making as much money off the backs of the working class.

Tue, 07/19/2011 - 09:25 | 1469743 RobotTrader
RobotTrader's picture

No doubt, after this huge embarrassment, they will be re-ramping up risk again and will resume playing its games by recommending one strategy for their clients and doing the exact opposite for themselves.

Perhaps they sandbagged on purpose since this year is already shot, and now they are setting up for earnings beats the last two quarters just in time for bonus season.

Or maybe Goldman has lost its edge?

Somebody big is short NFLX, AAPL, HOG, WYNN, SINA, etc. and getting killed pre-market.  Maybe Goldman????

Tue, 07/19/2011 - 09:27 | 1469751 bigwavedave
bigwavedave's picture

no chance they are short those names..... idiot

Tue, 07/19/2011 - 09:28 | 1469754 LawsofPhysics
LawsofPhysics's picture

"Somebody big is short NFLX, AAPL, HOG, WYNN, SINA, etc. and getting killed pre-market.  Maybe Goldman????"

 

One can only hope that it is them, but with a direct line to the Fed and treasury, I doubt it.

Tue, 07/19/2011 - 09:38 | 1469793 SheepDog-One
SheepDog-One's picture

Momofader still thinks its the 2005 market....how cute.

Tue, 07/19/2011 - 10:03 | 1469873 nscholten
nscholten's picture

What is the big fucking deal with robot trader?  Can one not handle another opinion kind of like in junior high school.  It's fucking retarded.  He or she is just making a fucking statement.  Guess what moron... you don;t have to agree with everything you read, just fucking read it.

Tue, 07/19/2011 - 10:08 | 1469890 gmrpeabody
gmrpeabody's picture

Please... don't get him started.

Tue, 07/19/2011 - 10:32 | 1470012 treemagnet
treemagnet's picture

SheepDogs reply rants are absolutely nothing compared to the wrath of JW in FL.  Now theres a tire fire you can't put out.

Tue, 07/19/2011 - 13:13 | 1470822 HungrySeagull
HungrySeagull's picture

Just shovel some dirt onto it and take a lunch break.

Tue, 07/19/2011 - 10:11 | 1469908 i-dog
i-dog's picture

"......fucking......Can one not handle another opinion......fucking......fucking......moron......fucking......"

Pot, meet kettle. Oh, and eloquently put, too. Sheesh.

Tue, 07/19/2011 - 11:51 | 1470462 grey7beard
grey7beard's picture

>> What is the big fucking deal with robot trader?

The peanut gallery is cat calling from the cheap seats.  Most of these folks can't scratch together a post that even gets a reply, hence they run in little packs to denegrate anyone with enough balls to give an opinion.

Count me in as someone who appreciates reading robo's posts.  Finding thoughful, insightful discourse on these sites is like finding unchewed gum on a New York sidewalk.

Thanks robo, for having thick skin.  Hang in there.

Tue, 07/19/2011 - 12:16 | 1470597 francis_sawyer
francis_sawyer's picture

Robo...

I enjoy bitch slapping you as much as the next guy... But I'll admit, you MAY have a point here... (& really - on all of the tickers you nominated)...

Not a bad catch (if you're right)...

 

Tue, 07/19/2011 - 09:25 | 1469745 SheepDog-One
SheepDog-One's picture

Well we know when the banks get in trouble and feel the pinch, thats when the bad things happen to the peasantry. Watch out.

Tue, 07/19/2011 - 09:38 | 1469791 Confused
Confused's picture

How true. Unfortunately for us.

Tue, 07/19/2011 - 10:35 | 1470031 DeadFred
DeadFred's picture

Lowes is currently restocked with pitchforks. The ten tined bedding fork is quite elegant but for the work at hand I suggest the sturdier manure fork.

Tue, 07/19/2011 - 10:36 | 1470032 DeadFred
DeadFred's picture

Lowes is currently restocked with pitchforks. The ten tined bedding fork is quite elegant but for the work at hand I suggest the sturdier manure fork.

Tue, 07/19/2011 - 13:14 | 1470823 HungrySeagull
HungrySeagull's picture

In the old Dutch Country they have those in plenty.

Tue, 07/19/2011 - 09:49 | 1469831 SteveNYC
SteveNYC's picture

Should wipe a sound 10-20% off Manhattan apartment values come year end. I hear several of the "big boys" on Wall St are having shockers this year. Seems lay offs are coming down the pipe second half '11. Keep an eye out and if you are looking to rent or upgrade in the city the fall/winter is the time.

Tue, 07/19/2011 - 11:45 | 1470423 chdwlch1
chdwlch1's picture

So true...your comment reminded me of this quote from a Martin Armstrong article suggesting Goldman is setting up Paulson for the next panic trade.

"We are due for a correction – It’s Just Time. The months ahead are September and November in particular for turning points. What we have to pay close attention to is the "hype" that comes out. If the Investment Bankers are looking to force a liquidation to make a bang-up trade for the year since things have been quiet, the news will be spun to support their agenda. This is part of the game. When they wanted all the little guys in for 1980, they made the Hunts a household name. That was the setup. The little guy buys thinking he is running with the big dogs. The real big dogs stay well hidden in the bushes and will NEVER step into the limelight.

The week before Labor Day (last week of August) may become the key week where a change in trend develops thereafter. Keep in mind, cyclically, most of the biggest periods of volatility take place right after Labor Day. Paulson – you are dancing with the devil. Watch your ass!

So for now, pay attention. The dogs are getting hungry and they have had a quiet year so far. The second half of the year is shaping up for a return to volatility."

http://armstrongeconomics.files.wordpress.com/2011/07/armstrongeconomics-is-paulson-next-panic-trade-070411.pdf

 

Tue, 07/19/2011 - 09:26 | 1469746 LawsofPhysics
LawsofPhysics's picture

Proprietary trading of all types simply provides a mechanism for a select few to steal massive amounts of real wealth from an otherwise healthier economy.  Gee, winding down the prop operations, is goldman doing the right thing or simply exiting to their private island?  Glad to see this either way.

Tue, 07/19/2011 - 09:27 | 1469752 SoNH80
SoNH80's picture

$7.4 billion dollars in revenue a quarter "abysmal"?  Are we supposed to feel schadenfreude for this?  Sorry, I just don't see it.  Blah, who cares, business as usual.  It'll be up to $10 bill a quarter in no time flat, when they buy the Right People in Congress again....

Tue, 07/19/2011 - 10:04 | 1469879 fuu
fuu's picture

Billions are so 20th century.

Tue, 07/19/2011 - 10:43 | 1470079 DaveyJones
DaveyJones's picture

Honest billions

Tue, 07/19/2011 - 13:19 | 1470847 hedgeless_horseman
hedgeless_horseman's picture

Oxymoronic.

Tue, 07/19/2011 - 09:27 | 1469753 Long-John-Silver
Long-John-Silver's picture

This is Lehman Brothers II and another economic collapse like 2008.

Tue, 07/19/2011 - 09:50 | 1469834 Sudden Debt
Sudden Debt's picture

Looks like it.

But this show is costing us a lot of money, so ACT SURPRISED when it happens!

Tue, 07/19/2011 - 10:14 | 1469919 i-dog
i-dog's picture

ROFL!! Day after day, you crack me up! But it's costing me a lot of coffee in my keyboard........

Tue, 07/19/2011 - 09:28 | 1469756 slaughterer
slaughterer's picture

Can't believe Blankfein rolled out the much-coveted "franchise value" as GS's saving grace.   ... Would love some details on the trades they lost money on in Q2.

Tue, 07/19/2011 - 09:28 | 1469757 snowball777
snowball777's picture

"Institutional client"...is that like a rich uncle in an asylum?

 

Tue, 07/19/2011 - 10:43 | 1470073 augie
augie's picture

while on the subject of insanity, you think i'm being too aggressive buying jan 12' 65 puts on GS? I mean, I'm a little concerned for my mental health as i no longer care if the contract's value evaporates. As long as i know my Lilliputian harpoon has been cast into the leviathans mantle, i can rest easy. Is that strange? 

Tue, 07/19/2011 - 09:29 | 1469760 Anaxagoras
Anaxagoras's picture

The Squid got beached.

Tue, 07/19/2011 - 09:29 | 1469762 bigwavedave
bigwavedave's picture

look at the results from the other 'banks'. they were all supported by loan loss clawbacks. gs has no consumer business at all. no branches. no mortgages. nadda. they are and have always been a fee and volume firm. no volume. and no fees. jeez. listening to you lot and one would think they were a 'bank'....

Tue, 07/19/2011 - 09:35 | 1469775 Larry Darrell
Larry Darrell's picture

And somehow they still qualified for all of the 3 and 4 letter gov't cheese programs like the rest of the banks.

 

Tue, 07/19/2011 - 09:31 | 1469764 sunnydays
sunnydays's picture

Couldn't happen to a better company.  Seems all the big boys are having problems all of a sudden.  Guess all those billions of QE2 has stopped manipulating the numbers and some real ones are coming out.   I will be interesting in JPM numbers.  Wonder how much their losses are in the metals market.  :)

Tue, 07/19/2011 - 09:32 | 1469768 Everybodys All ...
Everybodys All American's picture

You can't balme Goldman for thinking risk off this qtr with QE2 suposedly ending this qtr. I still think they are going to be right taking risk off because a market collapse is likely coming.

Tue, 07/19/2011 - 09:36 | 1469776 bigwavedave
bigwavedave's picture

they are cashing out their chips. risk off? more like storing what they got. like the rest of ZH readers they already know the end-game. does anyone actually think they are stupid? they wont play the last rounds with all the chips on the table. down to half book value. 

Tue, 07/19/2011 - 10:11 | 1469909 gmrpeabody
gmrpeabody's picture

 BINGO..... we have a winner!

Tue, 07/19/2011 - 14:29 | 1471216 citta vritti
citta vritti's picture

two, in fact

Tue, 07/19/2011 - 09:32 | 1469769 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

They are going to need a bigger high frequency trading machine.

Tue, 07/19/2011 - 09:35 | 1469774 Lmo Mutton
Lmo Mutton's picture

I hate it when my thuggery and mischief does not pay off.

Tue, 07/19/2011 - 09:37 | 1469782 Lmo Mutton
Lmo Mutton's picture

I hate it when my thuggery and mischief does not pay off.

Tue, 07/19/2011 - 09:42 | 1469788 Sudden Debt
Sudden Debt's picture

IT'S GOOD TO BE : A GOLDMAN CLIENT

 

down 40%, 60% MORE TO GO!

 

Tue, 07/19/2011 - 09:38 | 1469789 Sophist Economicus
Sophist Economicus's picture

But if they are 'masters of the universe' and the consumate 'insiders' with deep tenticles into 'TPTB", how could this happen?

 

Oh wait, maybe the market is bigger than any 'TPTB', it does behave 'irrationally' and does wipe out most folks given a long enough timeline....

Hmmm....

Tue, 07/19/2011 - 10:23 | 1469957 i-dog
i-dog's picture

I'm sorry...we already have a winner (see #1469776 above), but thanks for playing.

by bigwavedave
on Tue, 07/19/2011 - 09:36
#1469776 they are cashing out their chips........they wont play the last rounds with all the chips on the table
Tue, 07/19/2011 - 11:46 | 1470426 Sophist Economicus
Sophist Economicus's picture

Nope!   If they were omnipotent, there would be no need to husband cash.   they would be leading 'sheep' to the bloodbath, maximizing revenue further....unless, they don't know either.....

 

Tue, 07/19/2011 - 12:08 | 1470560 grey7beard
grey7beard's picture

>> But if they are 'masters of the universe' and the consumate 'insiders' with deep tenticles into 'TPTB", how could this happen?

I'm fairly sure there's been a falling out with the current administration.  GSs campaign contributions to Obama have dried up and gone to one of the Republicans.  I don't doubt the juicy tidbits of information necessary for sucess in this market are drying up.  Expect Goldman's profits to make an amazing rebound when a Republican is in the WH.

Tue, 07/19/2011 - 09:39 | 1469795 r101958
r101958's picture

Anybody think this might be just what is needed to force QE3?

Tue, 07/19/2011 - 09:40 | 1469798 SheepDog-One
SheepDog-One's picture

Who's payin? Not me.

Tue, 07/19/2011 - 09:43 | 1469807 r101958
r101958's picture

We all are, via future taxes.....at least until the dollar collapses.

Tue, 07/19/2011 - 09:44 | 1469813 Sudden Debt
Sudden Debt's picture

Seems so. Where else will they find revenue to pay for their bonusses?

 

Tue, 07/19/2011 - 10:30 | 1470000 ElvisDog
ElvisDog's picture

You're falling into the trap of thinking the future will just be a continuation of the immediate past. IMO, QE3 would cause the long-awaited collapse rather than prevent it. The supporting players aren't going along this time. The rating agencies would quickly downgrade U.S. debt (and rightfully so). Commodity prices and interest rates take off again to the upside. QE3 would be seen as a desperation move from a one-trick-pony Fed with no other options to deal with the situation.

Tue, 07/19/2011 - 09:43 | 1469804 Shineola
Shineola's picture

Obviously, they aren't in this for the money anymore. 

 

Just doin' Gods work......and laying up treasure in heaven.

Tue, 07/19/2011 - 09:51 | 1469838 snowball777
snowball777's picture

Ever watch a moth try to "corrupt" PMs? 

Tue, 07/19/2011 - 09:44 | 1469818 r101958
r101958's picture

Why else would the market be up over 120 right now? Maybe these 2Q results make QE3 much more likely?

Tue, 07/19/2011 - 09:46 | 1469821 jack stephan
jack stephan's picture

Ace Rothstein: [voice-over] In the casino, the cardinal rule is to keep them playing and to keep them coming back. The longer they play, the more they lose, and in the end, we get it all.

Tue, 07/19/2011 - 10:18 | 1469937 Fred Hayek
Fred Hayek's picture

Henry Hill(Goodfellas)(or is it Lloyd Blankfein?):

Didn't matter. It didn't mean anything. When I was broke, I'd go out and rob some more. We ran everything. We paid off cops. We paid off lawyers. We paid off judges. Everybody had their hands out. Everything was for the taking.

Tue, 07/19/2011 - 10:26 | 1469984 aheady
aheady's picture

"Back home, they would have put me in jail for what I'm doing. Here, they're giving me awards."

Tue, 07/19/2011 - 09:46 | 1469823 centerline
centerline's picture

The free money well is drying up.  QE3 (OpTwist) should help.  Of course, the marginal boost each time is less and less.  At some point, these criminal organizations are going to start sputtering - expect them to rattle sabers pretty loud at that point.  Will get interesting when the entire system "has no clothes."

Tue, 07/19/2011 - 09:50 | 1469833 r101958
r101958's picture

Google Finance Headlines:

State Street takes 850 IT staff off the payroll

Borders liquidation would mean 10700 jobs

Goldman Sachs Caught Off Guard on Trading

Bank of America reports $9.1 billion loss in 2nd quarter

Markets?

Dow Jones +127.91
   
S&P 500    +11.41          
   
Nasdaq    +41.49      

Nuff said.

Tue, 07/19/2011 - 09:57 | 1469857 foxmuldar
foxmuldar's picture

and Cisco cuts 6,500 jobs. Life is good.

Tue, 07/19/2011 - 09:58 | 1469859 slaughterer
slaughterer's picture

Well, IBM and WYNN beat last evening. 

Tue, 07/19/2011 - 09:52 | 1469839 Wannabee
Wannabee's picture

That chart has record bonus year written all over it.

Tue, 07/19/2011 - 09:55 | 1469849 foxmuldar
foxmuldar's picture

Don't worry, the market is soaring again on big expectations from Apple. Jobs don't matter anymore just as long as Apple keeps blowing away its numbers. I bet Buffett bailed out of GS long ago. He got his piece of the pie following the bailout.

Housing starts are up highest in five months. Perhaps they are being built to house the homeless and the unemployed. lol

Life is good.

Tue, 07/19/2011 - 10:18 | 1469940 SoNH80
SoNH80's picture

1930's success story: Parker Brothers

2010's success story: Apple

Light amusements sell during times of economic hardship.

Tue, 07/19/2011 - 10:56 | 1470162 DaveyJones
DaveyJones's picture

And cheap booze

Tue, 07/19/2011 - 12:15 | 1470591 grey7beard
grey7beard's picture

>> I bet Buffett bailed out of GS long ago.

Doubtful.  Buffet didn't buy common.  I think he had some kind of preferred with a stiff interest rate.

Tue, 07/19/2011 - 09:58 | 1469858 dcb
dcb's picture

well you know the best of the best costs a lot, I have so much trouble undertsnding why people do business with that firm. the idea that you have to look over each and every thing they say to make sure they aren't selling you crap. I mean lets face it, that ethose goes all the way to the top at that firm

Tue, 07/19/2011 - 10:09 | 1469898 nscholten
nscholten's picture

Buffet was bailed out and probably has already liquidated most of his goldman position.

Tue, 07/19/2011 - 10:15 | 1469927 gmrpeabody
gmrpeabody's picture

That's easy for you to say... OH WAIT, no it's not!

Tue, 07/19/2011 - 10:32 | 1470010 Oh regional Indian
Oh regional Indian's picture

Surely this has to be takedown week. And it's barely just begunnnn!

When Goldman is tarnished, Murdoch in the Dock...those are big moves...

A good time to pay attention.

Feels liek a temporary cliff drop sometime right about now.

ORI

http://aadivaahan.wordpress.com/2011/07/08/july-15th-aug-15th-month-long-window-coming-up-initial-thoughts/

Tue, 07/19/2011 - 10:41 | 1470065 centerline
centerline's picture

This week sometime is my guess.  Some sort of controlled demolition going into the debt ceiling deadline.

Tue, 07/19/2011 - 10:39 | 1470059 css1971
css1971's picture

See!

It's who you know that tell you what you should know. Good old boys network.

Tue, 07/19/2011 - 11:08 | 1470176 unununium
unununium's picture

I'll just post next quarter's comment early.

"GS couldn't avoid some realized losses last quarter as they raised cash for a bottom-feeding bonanza after markets were taken down to ensure a raise of the debt ceiling."

Tue, 07/19/2011 - 11:01 | 1470194 GoldmanSux
GoldmanSux's picture

GS went public in 1998 at around $70. In the 13 years since, shareholders have had a crappy return, while a multiple of their market cap has been paid out in compensation.

Tue, 07/19/2011 - 11:19 | 1470296 bozzy
bozzy's picture

I don't understand - I thought GS had only perfect trading days ... has something changed perhaps? Surely not.

Tue, 07/19/2011 - 11:24 | 1470313 Cdad
Cdad's picture

Goldman laying off 1,000 people by year end...that is the headline.  The earnings miss is already in the rear view mirror...

Have the banker pink slips begun in earnest?  We can only hope so.

Tue, 07/19/2011 - 11:31 | 1470338 Timmay
Timmay's picture

Squish the fish!

Tue, 07/19/2011 - 11:50 | 1470456 TheMerryPrankster
TheMerryPrankster's picture

Clouds of damp smoke lie close to the ground as pools of Satan's tears quench raging hell fires. His sons are failing, his portfolio is dropping, Blankfein must be summoned to explain in his cartoon voice why evil is not making more money.

Funny thing is it makes me feel better, seein Satan's spawn having to get by on a meager  7.3 billion in net earnings. Oh the shame - living lean, Maserattis with vinyl seats, stepping down to the gold plated Rolex, Cristal Champagne in a box.

Oh my....

 

Tue, 07/19/2011 - 12:45 | 1470690 Oh regional Indian
Oh regional Indian's picture

:-) Funny MP! Vinyl seated Maserati is classic.
ORi

Tue, 07/19/2011 - 13:18 | 1470841 HungrySeagull
HungrySeagull's picture

Forget the Maserati. A Rolls will do well with all that unnecessary stuff. Just have the Leather Makers pawn the interior and subistute plastic panels. Your three ton money pit will be a much better performing two ton tanning booth.

They should hand a Rolls to Top Gear

Tue, 07/19/2011 - 12:07 | 1470554 williambanzai7
williambanzai7's picture

Tue, 07/19/2011 - 12:19 | 1470609 DavidC
DavidC's picture

Hmm, this'll be why the Dow is glued around 12,500 and the S&P around 1316...

DavidC

Tue, 07/19/2011 - 14:17 | 1471155 Ranger4564
Ranger4564's picture

Their apparent revenue may be down, but I bet their off book income is out of the world.  They have been looting / pillaging / robbing everyone in sight for years, so even if they look like they're losing, it's just a fucking scam. They likely made shitloads of money from the European mess they helped create.  Don't believe the hype.

Tue, 07/19/2011 - 17:16 | 1471928 mkkby
mkkby's picture

Agreed.  Having more profit  just means paying more taxes.  Well hidden off books.

Tue, 07/19/2011 - 14:36 | 1471263 citta vritti
citta vritti's picture

what happened to the GS go private meme?

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