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Goldman Reports Massive $0.84 Loss Per Share, Prop Trading Loss Of $2.5 Billion, Comp Accrual Of $358,713 Per Employee
Topline bloodbath Summary: Net revenues in Investment Banking were $781 million, 33% lower than the third quarter of 2010 and 46% lower than the second quarter of 2011. Net revenues in Financial Advisory were $523 million, up slightly from the third quarter of 2010. Net revenues in the firm’s Underwriting business were $258 million, 61% lower than the third quarter of 2010. Net revenues in both equity underwriting and debt underwriting were significantly lower than the third quarter of 2010, reflecting a significant decline in industry-wide activity. The firm’s investment banking transaction backlog increased compared with the end of the second quarter of 2011. Net revenues in Institutional Client Services were $4.06 billion, 13% lower than the third quarter of 2010 and 16% higher than the second quarter of 2011. Net revenues in Fixed Income, Currency and Commodities Client Execution were $1.73 billion, 36% lower than the third quarter of 2010. And so on. As for the number everyone in #OWS is looking for, "The accrual for compensation and benefits expenses (including salaries, estimated year-end discretionary compensation, amortization of equity awards and other items such as benefits) was $1.58 billion for the third quarter of 2011, a 59% decline compared with the third quarter of 2010. The ratio of compensation and benefits to net revenues for the first nine mo nths of 2011 was 44.0%. Total staff levels decreased 4% compared with the end of the second quarter of 2011." In a nutshell: for the first time in probably since the Lehman crisis, Goldman reported a massive loss in its prop trading division of $2.5 billion, and also based on LTM accured comp benefits and the total staff at period end of 34,200, average compensation amounted to $358,713/employee.
P&L breakdown:
And the carnage visually:
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Bloodbath in DAX already
Time to pray the Lloyd's (sic) prayer or"God's work here then is "The Goldman Prayer":
Our chairman who art at Goldman
Blankfein be thy name
Thy rally’s come, God’s work be done
In the Dow as it is in the Nasdaq
Give us this day our daily gain
And forgive us our frontruning, as we punish those who frontrun against us
And bring us not under indictment
But deliver us from regulators
For thine is the cashflow, and the power, and the bonuses, forever and ever. Amen
Amen brother!
And God said, "Bless you Goldman." And Goldman gained 2 percent.
Astonishingly, there does not appear to be any DVA (Debit Value Adjustment) gain in the Vampire Squid's books. If it is there, its mighty small compared to Bank of America's astonishing booking of $1.7 bn direct DVA and a further $4.5bn of "fair value adjustments on structured liabilities ... reflects the widening of the company's credit spreads".
So, a grand total of mind-boggling $6.2bn of booked profits against losses on the company's own liabilities and credit spread widening!
DVA is only for banks that are lenders which Goldman is not!
Actually, it turns out that Goldman Sachs did have a DVA gain of $450 million but they hedged it all out by selling CDS on a basket of highly correlated peers in order to reduce their earnings volatility.
To some, having to account for an artificial gain (which nevertheless hits tangible equity so therefore can be used for compensation) is already unbelievably perverse.
But now, arguably, it is even worse when you actually act on DVA by hedging it so that you add not only to your default risk (you've just sold protection) but increased sector and systemic risk!
DVA is a monstrosity that should not exist, though it probably pales next to some other CVA modeling assumptions and hedging activity which cannot be uniformly accounted for by auditors.
Awesome.
Amen. Amen.
Beautiful prayer. I'm sure they're saying a few of those to the Fed as perhaps we just saw the equation of {No POMO=No Risk Free Profit=Loss on 'Prop' Trading} at work...
Dude, that's a gift. well done!
When the judgement day comes TBTF will need more than prayers to protect them. Bullet proof vest won't even protect them......not against pitch forks, tar, feathers, and manila rope!
+1 Alleluia! Amen!
Leonardo, that is simply brilliant. Brilliant stuff! You own?
ORI
Thoughts and Lessons @ OWS
"Thy rally’s come, God’s work be done"
Should be "Satans work be done"
Brilliant!
cue the organ...
That made my day... thank you.. lmao
Incredibly witty.
My charts going vertical on this news :)
HOW BIG will the BONUS pool be...cause there still will be BONUSES despite the LOSSES!
Staged. This is worthy of Shakespeare.
They're probably buying CDS on themselves....
Agree. An opportunity to clean out all the losses throughout the business lines. Better bang for the buck using accounting shifts next quarter and seem human this quarter. Besides, who is gonna remember or care tomorrow that....G..Gold, Goldman. lost. lost something in the.. 3rd inning? no. something else.. Give me a sec, I'll get it..
Edit: This also plays nicely into the "Hey, how can we be committing fraud if we are losing money defense"
Atleast GS had the temerity to report a loss unlike the fraudsters in Citi and BOA....
Do not believe this loss. They have used some accounting gimmick to hide the money in order to reduce public discontent.
It would be bad politics to report huge profits when OWS is downstairs.
It does look a lot like a strategic event.
That is the first thing I thought of when I read this.
I don't buy it.
I agree. They probably traded most of their stuff as a counterparty to their Isle of Tax Invisibiliy in the Wherethefuckarewe ocean to avoid US taxes.
Its a Tuesday, the markets are fine.
I this another green chute?
Why is this bad for markets..?
Maybe because people are figuring that if these "insider" guys can't make money in this clusterfuck called the capital markets, what chance do they have?
Well their stock is up so I guess losses are the new profits
FICC results, equities, everything just dismal.
Last week, FAZ swan dive. This week, FAZ rocket ship.
YEEEEEEAAAAAAAAAAAHHHHHHHHHH!!!!
Blankfein you bastard
so goldman is taking the "poor little goldman sachs is not the all-powerful" route instead of fudging numbers around like the others.
well, let's see what that gets them.
Doing god's work is getting more difficult everyday.
Squid is back on the menu BOYS!!!
GS bad news to get the stock cheap enough to go private and give up bank status...?
fried calamari greek style
Bank of China gave them a nice balck eye
Fuckers! Staged! Theatre! Too afraid to show any profits! Taken a loss now and when the smellies have left Wall Street they will post even bigger profits...
"Fuckers! Staged! Theatre!"
I agree. I always wondered why those stupid MFers would gloat about record profits, record bonuses, record this & that in the worst economy ever. That's a sure-fire way to end up on the end of a rope when everybody else is starving.
So, why not play poor-mouth and tell everyone you're struggling, while raking in your record profits & bonuses and just keep your friggin' mouth shut and not bear the wrath of the peons? What, you think the goobermunt will prosecute them for lying? Think again.
Hell, the bonus plan is they can then whine to the goobermunt for more taxpayer-funded bailouts because they're TBTF, making for record-record stealth profit & bonuses.
Jump you fuckers!
http://maxkeiser.com/2011/10/18/jump-you-fuckers-unplugged-plus-master-m...
When the money you make become more worthless everyday, there comes a time to just say screw it, and move into a shack by a pond and fish all day.
There's nothing wrong with that.
Not so 'Master of the Universe' are they now.
Watch CFTC bottle the position limits decision today.
When Goldman misses earnings, that means gold has to go down too. Goldman is like the maker of gold, and if they didn't work as hard that means gold isn't worth as much. For gold to go up, Goldman has to make more.
Theree 3 million oz of silver standing for delivery this month but very little silver has left the COMEX. The COMEX claim to have 30 million oz available.
no question, they have thought out 5 steps ahead and realized it was better and safer for them to miss expectations and this point in time
Here we go again. Gold down $28 at $1640/oz and silver down $1.20 at $30.50/oz.
Relax.
This is nothing but The Cartel flexing their muscles ahead of the CFTC meeting today.
For a second, I thought gold and silver were worth less...or was that worthless?
The games these folks play.
Gold and silver moving onto the launching pad so this is a great time to be adding to positions. Physical & mining shares should be bought NOW.
At this point Gold seems to be back to the old inverse relation with the USD. Silver as usual amplifies Gold’s moves.
Dollar up, PMs down.
Gold’s faire range 1535-1665 (according to me). Fair value at 1610.
Silver, too dangerous right now.
Dangerous if someone is throwing 100 oz bricks at your head.
The real danger is in not owning any.
If you miss the beginning of the silver explosive move that you're anticipating you're not going to lose money. You can still jump in.
But if it keeps going down and you're invested you are losing money.
Before it can go up, it has to stop going down.
That's what she said.
All an illusion, they are trying to deflect attention. LOOK LOOK we are losing money we are innocent. And of course Gold gets smashed. Where are the marshals, or that's right they are controlled by these people.
Bloomberg will conveniently blame it on the OWSers.
OWSers = hippies.... where's my popcorn and Kent State t-shirt.
Just a convenient distraction from (a symptom, at best, of) the real collapse problem.
Here's one of those hippies saying very clearly why he's there:
http://www.zerohedge.com/contributed/enforce-laws-99
So two of the TBTF Post beats based on gimmick accounting (Citibank/JPM) Wells and Bank of America miss and Goldman gets hammered.
Sweet! The TBTF are dying!
regarding the cftc meeting, the bankers are saying F@#k you we can do what ever we want and there ain't nothing you can do about it!!
Fraudsters always fail to learn from history and always think this time is different for them.
Wonder what those numbers would say if assets were marked to market. Until they are, this is all smoke and mirrors.
GS needed to post a loss in order to pacify the protesters. Very clever.
I lubs me some cheap gold and silber. I shorely does.
Goldman is another sign of the bear market that we remain in. The ES, TNX, and CL have likely put in an important top yesterday. Intermarket analysis tells us that big moves are likely ahead with risk off being the theme. http://bit.ly/oLkAgM
The 1% just got a little smaller.
Its all relative so they'll drag down the rest of us
I hate to say it but Goldman might be a buy at $95. Will probably turn into a private investment firm and do a buyout at $125/share.
But I would rather starve than own GS stock.
Welcome to the bitch economy, Goldman Sachs.
Fraud, lies, HFT deception for profit are all made a little tougher when the whole World is watching you like a Hawk.
pulling back the curtain has helped to expose the 'Roach Motel'
BTW what the hell is this shite
http://finance.yahoo.com/q;_ylt=AgRR0AATPUCmgYTupSEJLsm7YWsA;_ylu=X3oDMTFkOWRpMzUzBHBvcwMzBHNlYwNjb21tdW5pdHlTZW50aW1lbnQEc2xrA2Nyb2NzaW5jY3JveA--?s=CROX
"Very Bullish" they should say just like they said the devastating meltdown in Japan "is very Bullish for their economy."
The manipulators are desperate to have gold/silver go down with the market indices.
It's ok it's goldman. I'm sure the shareholders will mail them the 84 cents per share they hold that they owe.
Cash feels real good right now. I think we're going into another one of those rush-for-liquidity- sell-all-assets--dollar-shortage thingies right now like we saw several weeks ago.
unfortunately, it's just not holding a candle to 2-ply.
but that might just be me.
OMG NO MOAR BENTLEYS*
* The above-mentioned comment refers to any amount of unpurchased Bentleys for the fiscal year 2011-2012, which were to be acquired through profit derived by lending out freely obtained money, through the Primary Dealer status, while at the same time packaging immenesly complicated and overleveraged financial contracts into animal-named investment-grade securities, which were in turn used as bets againts its very own client base.
ZH used to report the number of trading days without loss for the likes of GS.
ie out of the last 90 days they lost on only 2 days.
How can these numbers be correct when a $2.5 billion is reported ?
Maybe they have a so-called "Rogue Trader" like UBS who lost the $2.5 Billion on those 2 days?
That update comes when the 10Q is released. Usually within 10-15 days of the earnings release.
Timberrrrrrrrrrrrrrrrrrrr
Their IB and FICC numbers are pretty dismal. If the wealthy are not trading, who the hell is?
Wow, that prop loss is quite substantial. You sure they didn't hire Kweku Adoboli?
Remember the good-ole days when profits were considered, well. good? Now the bigger the loss the better. Give GS credit, they are the best at back-loading their losses--they are still the king.
I hear Lloyd has his Traders on Double Secret Probation now...if they mess up they get sent to open Goldman Sach's new Liberian branch:
http://www.youtube.com/watch?v=QQSjyYRTDVM
I guess this means I should apply for a job there.
You mean we've finally found something that's not bullish??
And GS is green. I guess it was bullish...
Epic buying opportunity. Goldman going private in 5... 4... 3... 2...
This feels like it was cooked purposely for PR reasons - - show that the squid is fallable.
And GS is up $1.00 pre-market.
Explain that.
Gold and silver getting "CROXed" this morning.
Poor Eric King will have to open his next blog "With gold and silver in total freefall, for KNW listeners globally, we are proud to present an interview with the esteemed......"
Why then don't you start your postings with "With NFLX, TZOO, etc being in freefall, I'm proud to tell you for the first time ever... that I'm wrong. I admit I just like to make this stuff up all the time."
Things that make you go...
hmmm?
We've got OWS turning to pitchforks (the ones Obama said he was saving the banksters from) in the street. Banksters getting nervous and Golden Slax fabricates an image of immortal. Bah
And the stock is up premarket...along with BofA.
How much of a Tax refund will they earn?
$666 trillion.
Must.. open.. green...
I knew you kids would enjoy this.
Leonardo, I don't like Goldman either but you shouldn't be playing words with Our Lord's prayer. That's just wrong and offensive.
Farmers don't like it when crows shit all over their scarecrows but that's the price you pay for using strawmen.
Notice to OWS crowd... stop picking on the poor, unfortunate GS staff... "we feel your pain!"
GS can post whatever bottom line they chose to post... there are no rules... yet (unless of course they're able to buy the presidency for Willard)!
http://www.newscientist.com/blogs/shortsharpscience/2011/10/studio-portrait-of-big-brainy-1.html?DCMP=OTC-rss&nsref=online-news
A squid had[sic] eight arms and two tentacles plus the ability to inject an inky substance to permeate the water and hide itself. Its skin changes color to suit its environment. It maintains the highest survival intelligence among invertebrates. It has the biggest eyes in the animal kingdom; chop off a tentacle and it can grow a new one. Chop off its head and under special circumstances it can regenerate another.
Now that's fucking scary.