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Is Goldman About To Report Only The Second Loss Since Its 1999 IPO?

Tyler Durden's picture





 

For all its criticisms, if there is one thing one can say about Goldman, is that unlike their pathetic TBTF cousins in the US financial industry (JPMorgan, Citi, and shortly Morgan Stanley and Bank of Countrywide Lynch), it can report a loss like a man. Which, in less than 24 hours, it may have to do, for only the second time since its 1999 IPO. As Bloomberg notes, tomorrow the market expects the vampire squid to announce at 8:00am Eastern that it had a loss driven by lower revenues and debt and equity marks. Also, unlike the "others", we are confident Goldman will not hide behind such blatant accounting gimmicks as DVA and loan loss reserve releases (the second because the firm never got into the lending business... on the other hand, the FDIC-insured bank also has yet to open any ATMs, making one wonder just why it continues to have taxpayer backing as a bank holding company, but we digress). Here is what to expect tomorrow from Viniar and Blankfein, courtesy of Bloomberg. Naturally the one thing nobody expects is the announcement of a succession event at the top. Considering the recent step function in popular "appreciation" of financial innovation, we believe a Blankfein phase-out announcement could be in the works. One thing is certain: Ferrari dealerships will not be happy come Christmas as bonuses this year will be poor to quite poor, if any.

ESTIMATES:

  * 3Q loss est. 11c (down $1.61 last 4 weeks), range ($1.02)-$1.22
  * 3Q rev. $4.37b (down $2.33b last 4 wks), range $3.70b-$5.52b

WHAT TO WATCH:
  * Lower Q/q revs: trading (FICC, equity), investment-banking on lower equity underwriting, asset management on lower markets
  * Debt/equity, (ICBC) marks: BofA analyst sees markdowns in investment & lending debt/equity (62c), ICBC (40c)
  * Negative oper. leverage given rev. pressure: JMP analyst sees comp. ratio flat at 44%, non-comp. exp. ratio at 44% vs 34% Q/q

DATA
  * GS has beat EPS ests. 5 of last 8 qtrs, rev. 4 of last 8 qtrs.
  * GS has fallen 3 of last 5 days after earnings; options imply 1 day move 4.6%
  * GS down 43% YTD to $96.21; watch 10-DMA ($96.05), 20-DMA ($96.48), 50-DMA ($105.14)
  * Peer multiples to tangible book: GS 0.79x, BAC 0.48, C 0.58x, JPM 0.95x, MS 0.56x
  * GS has 17 buys, 12 holds, 2 sells; avg. PT $145.50 implies 51% upside
  * NOTE: July 16, day prior to 2Q earnings, GS had avg. PT of $178 with 66% upside, with 20 buy, 7 hold, 3 sell ratings

TIMING: GS reports ~8am (last 3 times 8:00am, 8:02am, 8:02am); call 9:30am 888-281-7154

Source: Bloomberg First Word News

 


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Mon, 10/17/2011 - 14:26 | Link to Comment AngryGerman
AngryGerman's picture

Even the squid will go DVA

Mon, 10/17/2011 - 14:30 | Link to Comment Smithovsky
Smithovsky's picture

Apparently God's work ain't as profitable as it used to be.  

Mon, 10/17/2011 - 14:31 | Link to Comment Fukushima Sam
Fukushima Sam's picture

Any parasite that kills its host is also doomed.

Mon, 10/17/2011 - 14:34 | Link to Comment Dr. Richard Head
Dr. Richard Head's picture

Hosts are starting to identify the ticks though and are pinching them a bit here and there.  For instance, Anon posted Vikram Pandit's personal cell phone number in response to Citi recently arresting depositors that wished to closed their accounts. 

646-512-4269

Mon, 10/17/2011 - 14:38 | Link to Comment trav7777
trav7777's picture

Here's to hoping GS loses eleventy dollars per share

Mon, 10/17/2011 - 14:51 | Link to Comment iDealMeat
iDealMeat's picture

They also posted a bunch of GS contact info on pastebin.com bout a month ago..

 

Mon, 10/17/2011 - 15:03 | Link to Comment Transitory Disi...
Transitory Disinflation's picture

My thoughts are that they HAVE to report a loss to make them look like they are NOT the rulers of the world (re: That BBC interview a couple of weeks back).

 

This is to placate the masses no doubt.

 

(although, what do I know)

Mon, 10/17/2011 - 17:15 | Link to Comment Ricky Bobby
Ricky Bobby's picture

My first thought as well. They can take cover for a while and let the rest of the banks take the fire. See it's not really crony capitalism we had a loss this quarter.

Mon, 10/17/2011 - 14:32 | Link to Comment gojam
gojam's picture

I expect it's a feint. frontloading losses.

Mon, 10/17/2011 - 14:36 | Link to Comment CPL
CPL's picture

Maybe...three years ago I would have agreed, but playing three card monte everyday of every hour by law of average cause the house to lose eventually.

 

The "hedge" is an illusion.

Mon, 10/17/2011 - 14:38 | Link to Comment gojam
gojam's picture

Goldman make the weather they don't need a forecaster.

Mon, 10/17/2011 - 15:07 | Link to Comment Cosmicserpent
Cosmicserpent's picture

GS share price will fall. However, to cover their shitty performance, they will take the whole market down this week so that they  come out looking like the best horse horse in the glue factory.

Seriously, if GS expects their shares to take a hit, they will simply tilt the momentum down and profit from it.

Mon, 10/17/2011 - 15:11 | Link to Comment jonan
jonan's picture

nice avatar!

Mon, 10/17/2011 - 15:40 | Link to Comment gojam
gojam's picture

Thanks Jonan.   ;-)

Mon, 10/17/2011 - 14:42 | Link to Comment eureka
eureka's picture

Even the US will go down - median income:  $22,500 per person/45000 per house-hold.

That's FIAT money - without any gold or real production to back it.

Knox is empty - and so are US factories - and homes.

Yes, EVEN the US itself IS going down.

Mon, 10/17/2011 - 19:14 | Link to Comment oogs66
oogs66's picture

they dva with the best of them

Mon, 10/17/2011 - 14:27 | Link to Comment FunkyMonkeyBoy
FunkyMonkeyBoy's picture

How can the entity that rules the world, lose money?

Oh, yes... i forgot... it's not money they are really interested in.

Mon, 10/17/2011 - 14:35 | Link to Comment wandstrasse
wandstrasse's picture

could also be a a sort of PR campaign, human touch etc. Like tyrants who let themselves photograph with cute little children around, like Hitler, Stalin, Franco etc..

Mon, 10/17/2011 - 14:47 | Link to Comment SheepDog-One
SheepDog-One's picture

Thats right, totaly contrary to what most everyone believes, they dont give a shit about MONEY at all.

Mon, 10/17/2011 - 15:08 | Link to Comment Caggge
Caggge's picture

It's a PR stunt. They put all their moneymaking deals off the books.

Tue, 10/18/2011 - 02:14 | Link to Comment Gief Gold Plox
Gief Gold Plox's picture

Thank you for that FMB. I've also noticed that most everyone thinks the big banks want money, but if we, the mortals, know money is not worth the paper it's printed on, what makes anyone think the people who actually create it value it at all? What they want with money is for you to have it, prefferably much more than you can afford to repay, and loose it. Then they own your ass.

Money is to banks what a chain is to slavery.

Mon, 10/17/2011 - 14:40 | Link to Comment Oh regional Indian
Oh regional Indian's picture

No Christmas at goldman.

Surely the financial world IS staring the apocalypse in the face. This time it IS different.

ORI

@OWS

Mon, 10/17/2011 - 14:27 | Link to Comment Tex
Tex's picture

DVA isn't a choice, so stop calling it a gimmick.  

Mon, 10/17/2011 - 14:30 | Link to Comment Bartanist
Bartanist's picture

Lol ... yeah and all audits are honest, competent, penetrating and untarnished... Just ask Anderson.

Mon, 10/17/2011 - 14:31 | Link to Comment Tyler Durden
Tyler Durden's picture

Suspension of Mark to Market also isn't a choice.... oh wait.

Luckily, the FASB is completely independent and pristinely untouched by banking interests.

Mon, 10/17/2011 - 14:52 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

  <===halloween party cancelled

  <===the light of M2M accounting

what do zombies fear most?  [choose one--L0L!!!]

Mon, 10/17/2011 - 14:28 | Link to Comment Bartanist
Bartanist's picture

Gosh, honest all you well meaning crazies in the OWS park encampment, we are not bad guys who are raping America and the world. See, we can prove it. We lost money this quarter and will only be taking home on the avergae $600k per employee (secretaries and janitors included) this year.

Now go focus your attacks on those other guys, the bad banks.

Mon, 10/17/2011 - 14:48 | Link to Comment wandstrasse
wandstrasse's picture

Next up in this sympathy-baiting trend: Goldman hires Blythe Masters and re-names itself 'Silverwoman'

Mon, 10/17/2011 - 15:22 | Link to Comment junkyardjack
junkyardjack's picture

Exactly, GS is outsmarting the other banks again.  This is great PR.  The other banks don't realize this is the point to dial down the corruption so that OWS doesn't have anything to complain about (OWS still does but the dumb traditional news won't be able to figure it out if they see EPS loss and they'll just paint OWS as a bunch of commies).  Then once OWS is completely discredited, blow the door off the hinges and steal everything that's not tied down. Goldman FTW!

Mon, 10/17/2011 - 14:28 | Link to Comment Deadpool
Deadpool's picture

One thing is certain: Ferrari dealerships will not be happy come Christmas as bonuses this year will be poor to quite poor, if any.

good one.

 

Mon, 10/17/2011 - 14:29 | Link to Comment AngryGerman
AngryGerman's picture

ferrari-recession, biatches

Mon, 10/17/2011 - 14:31 | Link to Comment jdelano
jdelano's picture

Does this mean I can finally start shorting pos stocks like Tiffanys?  

Mon, 10/17/2011 - 14:34 | Link to Comment AngryGerman
AngryGerman's picture

well, according to as it goes over the last weeks, id rather go ueberlong on everything that looks shitty

Mon, 10/17/2011 - 15:31 | Link to Comment Ancona
Ancona's picture

That's a nice rack there Angry.

Mon, 10/17/2011 - 14:38 | Link to Comment adr
adr's picture

Actualy Ferrari might do quite well. The banksters were trying to move upmarket to Bugatti and the new Bentley so they might just have to settle for a Ferrari instead.

Mon, 10/17/2011 - 14:35 | Link to Comment buzzsaw99
buzzsaw99's picture

take the precious from gollum and all you have left is man sachs.

Mon, 10/17/2011 - 14:40 | Link to Comment john39
john39's picture

the precious is really power...   money (or fiat) is just the means to that end.

Mon, 10/17/2011 - 14:42 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Brilliant Buzzsaw.

ORI

Mon, 10/17/2011 - 14:36 | Link to Comment adr
adr's picture

Funny how the stock market is taking a huge dump today but commodities are holding on pretty strong. On past days oil would have been down $2 or more.

I also liked all the stories how gasoline prices needed to jump $.30 since last week because oil rose from $75 to $85. Oil hit $75 for what less than 12 hours?

The bend you over a log brigade is out in full force. That is your Christmas present this year.

Mon, 10/17/2011 - 14:37 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

All those long EUR calls finally catch up. Their Forex calls vary between dismal & abysmal. Their clients are all on the sidelines with prolapsed sphincters.

Mon, 10/17/2011 - 14:41 | Link to Comment dabullify
dabullify's picture

Yo Tex! If DVA isn't a gimmick, I expect that the next time we bank CDS spreads come in that the TBTF piece's of shit will take a CHARGE against earnings.....

Mon, 10/17/2011 - 15:02 | Link to Comment optionsoptions
optionsoptions's picture

they will and they do

Mon, 10/17/2011 - 14:42 | Link to Comment john milton
john milton's picture

you can not even close your bank account on these devils

http://www.addictinginfo.org/2011/10/15/bank-of-america-refuses-to-allow...

Mon, 10/17/2011 - 14:47 | Link to Comment kito
kito's picture

as one commenter so aptly put it- i bet you could be a protester and a customer if you had a deposit for them

Mon, 10/17/2011 - 14:47 | Link to Comment bob_dabolina
bob_dabolina's picture

Seeing as GS has been a bank holding company for a few years now does anyone know where I can open my GS checking account?

Mon, 10/17/2011 - 15:22 | Link to Comment tickhound
tickhound's picture

You opened it at birth... Auto-deposit, withdrawal by committee.

Mon, 10/17/2011 - 14:48 | Link to Comment SaveTheGreenback
SaveTheGreenback's picture

C'mon, I know we all hate GS but do you really expect them to come in below the street???

It's almost rigged.  They will beat estimates and Lloyd will have a very Merry Christmas (even if he is Jewish)...

Mon, 10/17/2011 - 14:51 | Link to Comment jdelano
jdelano's picture

massive trading profits on the last vapor ramp?

Mon, 10/17/2011 - 14:53 | Link to Comment SheepDog-One
SheepDog-One's picture

From front pocket to back pocket? I dont know, trading thin air doesnt seem too substantial to me.

Mon, 10/17/2011 - 14:48 | Link to Comment Seasmoke
Seasmoke's picture

going to make for a long Hannukah

Mon, 10/17/2011 - 14:52 | Link to Comment SheepDog-One
SheepDog-One's picture

WTF happened to all the Uber Bulls from over the weekend mocking and ridiculing the 'poor hapless bears'?

Mon, 10/17/2011 - 14:56 | Link to Comment RobotTrader
RobotTrader's picture

They are breathlessly awaiting AAPL and IBM earnings.

Sitting on the sidelines for now.

Mon, 10/17/2011 - 14:57 | Link to Comment jdelano
jdelano's picture

they went out to buy Selson for the scalp-crawling fear.  

Mon, 10/17/2011 - 14:56 | Link to Comment PaperBear
PaperBear's picture

Al Jazeera is claiming that Bani Walid, Libya has fallen to the supposed rebels.

The video was a tight shot? of the correspondent and a load of these supposed rebels but no building visible.

Mon, 10/17/2011 - 14:56 | Link to Comment junkyardjack
junkyardjack's picture

Morgan Stanley is up, I guess they will be reporting record profits

Mon, 10/17/2011 - 14:56 | Link to Comment the not so migh...
the not so mighty maximiza's picture

No Bonus!!!  yikes, really fat ugly hookers and really bad coke.  Instead of the Hamptons it will be Hampton Inn Route 9 NJ.

 

 

Mon, 10/17/2011 - 14:58 | Link to Comment jdelano
jdelano's picture

Hempstead turnpike.  it's closer.

Mon, 10/17/2011 - 15:00 | Link to Comment the not so migh...
the not so mighty maximiza's picture

hahahah Farmingville for the cheap shit.

Mon, 10/17/2011 - 21:49 | Link to Comment Tijuana Donkey Show
Tijuana Donkey Show's picture

And they will open the first GS ATM in that hotel room, and it will taste like lunch.....

Mon, 10/17/2011 - 14:56 | Link to Comment thebone
thebone's picture

GS accrues 50% of revenue for compensation expenses. What you will see tomorrow is a reversal of that accrual (as everone will be getting fat 0's come comp time) and GS will be posting solid earnings.

Mon, 10/17/2011 - 15:00 | Link to Comment jdelano
jdelano's picture

hmm.  interesting call.  I'll buy that.  But don't think it will be lost on the market that GS will then be losing 25% of its best as fifty new hedge funds spring up.  

Mon, 10/17/2011 - 15:02 | Link to Comment SaveTheGreenback
SaveTheGreenback's picture

Exactly.

Mon, 10/17/2011 - 21:34 | Link to Comment Where My Dawg At
Where My Dawg At's picture

If by solid earnings you mean a loss of over 70 cents per share then you'd be correct.

Mon, 10/17/2011 - 15:00 | Link to Comment Andrew Jackson ...
Andrew Jackson epitaph's picture

Champagne. Cheers !!!

Mon, 10/17/2011 - 15:06 | Link to Comment metastar
metastar's picture

The announcement is timed to deflect the fury of the slave class.

Mon, 10/17/2011 - 15:06 | Link to Comment Problem Is
Problem Is's picture

Lloyd "Madoff Time" Blankfein:

"See... Goldman doesn't front run or rig markets or engage in insider trading or fraudulently rig country's budgets (See: Greece) to hide debt or stack MBS junk bonds to blow up for our profit...


We took a loss like every other fair player on Wall Street... Goldman is as innocent as a virgin at a porn star convention..."

And if you believe any thing out of the mouth of Lloyd "Just Doin' God's Work" Blank-dick-fein...

I have a deal on some Abacus investments for you...

Mon, 10/17/2011 - 15:07 | Link to Comment jdelano
jdelano's picture

first ramp job waaaaayyy too early today.  they must be really freaking.  

Mon, 10/17/2011 - 15:09 | Link to Comment rsfish
rsfish's picture

Christmas as bonuses this year will be poor to quite poor, if any.

LMAOROTF

Mon, 10/17/2011 - 15:11 | Link to Comment Josh Randall
Josh Randall's picture

All the guns for employees, extra large doses of campaign money for O'buma, and Trash removal is becoming more costly at the Italian branch. All of these expenses were unforseen

Mon, 10/17/2011 - 15:11 | Link to Comment Grand Supercycle
Grand Supercycle's picture

SP500 daily chart now gives bearish signal, warning of a new leg down. Weekly chart reverts to neutral.

http://stockmarket618.wordpress.com

Mon, 10/17/2011 - 15:12 | Link to Comment Piranhanoia
Piranhanoia's picture

The squid is buried in MBS, and is going to take in the ATM like the bad lender they are.

Mon, 10/17/2011 - 15:16 | Link to Comment ziggy59
ziggy59's picture

I believe they will end up with huge bonuses again... There are 10 weeks until bonuses are given..and who says they can't get bonuses in the new year...sorry I'm cynical. I'm sure they use the same accounting tactics as citi and Jpm. Same frat of crooks..

Mon, 10/17/2011 - 15:17 | Link to Comment jm
jm's picture

For all its criticisms, if there is one thing one can say about Goldman, is that unlike their pathetic TBTF cousins in the US financial industry (JPMorgan, Citi, and shortly Morgan Stanley and Bank of Countrywide Lynch), it can report a loss like a man.

 

Nice to hear something nice said about them.

 

Mon, 10/17/2011 - 15:17 | Link to Comment KTV Escort
KTV Escort's picture

report like a man... hmmm... and this is to be admired? did they fuck people over like a man too? wonder if some of their execs will die like a man in the aftermath of the collapse

Mon, 10/17/2011 - 15:33 | Link to Comment machineh
machineh's picture

'the FDIC-insured bank also has yet to open any ATMs, making one wonder just why it continues to have taxpayer backing as a bank holding company'

Biggest scandal on the freaking planet, as these sleazebag chiselers suck at the Federal Reserve's ZIRP sugar tit, courtesy of the taxpayer.

OCCUPY GOLDMAN SACHS!

Mon, 10/17/2011 - 15:40 | Link to Comment tomreagan
tomreagan's picture

Glad to see the Squid is now taking a stand against accounting gimmicks.

The title of this post should read "Is Goldman About to Report Only the Second Loss Since its 1999 IPO (3rd if you include the 4th qtr 2008 which they conveniently skipped reporting December)".

http://zerohedge.blogspot.com/2009/03/exclusive-aig-was-responsible-for-banks.html

 

or

http://economix.blogs.nytimes.com/2009/04/14/the-case-of-the-missing-month/

Mon, 10/17/2011 - 17:44 | Link to Comment Ghordius
Ghordius's picture

It was an unnecessary month, really
Nobody should have reported it

Mon, 10/17/2011 - 15:46 | Link to Comment ft65
ft65's picture

I wonder if they will be claiming a tax refund on losses - or is my assumption that the squid pays tax, showing my lack of credibility to be posting here at ZH

Mon, 10/17/2011 - 17:07 | Link to Comment PulauHantu29
PulauHantu29's picture

Mr "Doing God's Work" Bankfein will still take home a record high bonus.  I'm confident of that.

Mon, 10/17/2011 - 21:55 | Link to Comment Tijuana Donkey Show
Tijuana Donkey Show's picture

I am blown away that there is a GS thread, and I didn't see any anti-semite commentary! WHERE ARE THE TROLLS?

Mon, 10/17/2011 - 23:48 | Link to Comment mark mchugh
mark mchugh's picture

Goldman can report a loss like a man?

You meant a man in a dress, right?  Or have you forgotten the infamous "orphan month?"

http://economix.blogs.nytimes.com/2009/04/14/the-case-of-the-missing-month/

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