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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

Tyler Durden's picture


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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Tue, 10/18/2011 - 07:40 | 1784448 Fips_OnTheSpot
Fips_OnTheSpot's picture

Bloodbath in DAX already

Tue, 10/18/2011 - 07:48 | 1784475 LeonardoFibonacci
LeonardoFibonacci's picture

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

Tue, 10/18/2011 - 07:56 | 1784492 trampstamp
trampstamp's picture

Amen brother!

Tue, 10/18/2011 - 10:40 | 1785054 Dental Floss Tycoon
Dental Floss Tycoon's picture

And God said, "Bless you Goldman."  And Goldman gained 2 percent.

Tue, 10/18/2011 - 11:19 | 1785174 sqz
sqz's picture

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!

Tue, 10/18/2011 - 11:55 | 1785500 LeonardoFibonacci
LeonardoFibonacci's picture

DVA is only for banks that are lenders which Goldman is not!

Wed, 10/19/2011 - 11:59 | 1789167 sqz
sqz's picture

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.

Tue, 10/18/2011 - 08:00 | 1784503 Jeff Lebowski
Jeff Lebowski's picture


Tue, 10/18/2011 - 08:02 | 1784506 lunaticfringe
lunaticfringe's picture

Amen. Amen.

Tue, 10/18/2011 - 08:05 | 1784516 Vengeance
Vengeance's picture

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...

Tue, 10/18/2011 - 08:15 | 1784547 MonsterBox
MonsterBox's picture

Dude, that's a gift.  well done!

Tue, 10/18/2011 - 08:16 | 1784549 MolotovCockhead
MolotovCockhead's picture

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!

Tue, 10/18/2011 - 08:22 | 1784567 RemiG2010
RemiG2010's picture

+1  Alleluia! Amen!

Tue, 10/18/2011 - 08:26 | 1784588 Oh regional Indian
Oh regional Indian's picture

Leonardo, that is simply brilliant. Brilliant stuff! You own?


Thoughts and Lessons @ OWS

Tue, 10/18/2011 - 08:26 | 1784589 MassDecep
MassDecep's picture

"Thy rally’s come, God’s work be done"

Should be "Satans work be done"

Tue, 10/18/2011 - 08:46 | 1784643 stopcpdotcom
stopcpdotcom's picture


Tue, 10/18/2011 - 09:32 | 1784777 jonan
jonan's picture

cue the organ...

Tue, 10/18/2011 - 11:03 | 1785180 Tsunami Wave
Tsunami Wave's picture

That made my day... thank you.. lmao

Tue, 10/18/2011 - 12:48 | 1785717 Libertarians fo...
Libertarians for Prosperity's picture



Incredibly witty. 


Tue, 10/18/2011 - 07:41 | 1784450 SixFeetFromTheHedge
SixFeetFromTheHedge's picture

My charts going vertical on this news :)

Tue, 10/18/2011 - 09:09 | 1784707 Fidel Sarcastro
Fidel Sarcastro's picture

HOW BIG will the BONUS pool be...cause there still will be BONUSES despite the LOSSES!

Tue, 10/18/2011 - 07:43 | 1784452 GeneMarchbanks
GeneMarchbanks's picture

Staged. This is worthy of Shakespeare.

They're probably buying CDS on themselves....

Tue, 10/18/2011 - 09:31 | 1784684 spanish inquisition
spanish inquisition's picture

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"

Tue, 10/18/2011 - 07:42 | 1784453 quark288
quark288's picture

Atleast GS had the temerity to report a loss unlike the fraudsters in Citi and BOA....

Tue, 10/18/2011 - 08:23 | 1784577 bartek
bartek's picture

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.

Tue, 10/18/2011 - 08:31 | 1784602 citrine
citrine's picture

It does look a lot like a strategic event.

Tue, 10/18/2011 - 09:39 | 1784793 Solid
Solid's picture

That is the first thing I thought of when I read this.
I don't buy it.

Tue, 10/18/2011 - 11:02 | 1785170 dracos_ghost
dracos_ghost's picture

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.

Tue, 10/18/2011 - 07:42 | 1784454 pepperspray
pepperspray's picture

Its a Tuesday, the markets are fine.

Tue, 10/18/2011 - 07:42 | 1784455 El Gordo
El Gordo's picture

I this another green chute?

Tue, 10/18/2011 - 07:43 | 1784456 EZT
EZT's picture

Why is this bad for markets..?

Tue, 10/18/2011 - 08:15 | 1784544 beaker
beaker's picture

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?

Tue, 10/18/2011 - 09:42 | 1784798 junkyardjack
junkyardjack's picture

Well their stock is up so I guess losses are the new profits

Tue, 10/18/2011 - 07:43 | 1784457 jm
jm's picture

FICC results, equities, everything just dismal. 

Tue, 10/18/2011 - 07:43 | 1784459 Mitch Comestein
Mitch Comestein's picture

Last week, FAZ swan dive.  This week, FAZ rocket ship.

Tue, 10/18/2011 - 08:42 | 1784627 JohnG
JohnG's picture


Tue, 10/18/2011 - 07:44 | 1784461 LeonardoFibonacci
LeonardoFibonacci's picture

Blankfein you bastard

Tue, 10/18/2011 - 07:45 | 1784462 bigdumbnugly
bigdumbnugly's picture

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.

Tue, 10/18/2011 - 07:45 | 1784466 ss123
ss123's picture

Doing god's work is getting more difficult everyday.

Tue, 10/18/2011 - 07:45 | 1784468 The Axe
The Axe's picture

Squid is back on the menu BOYS!!!

Tue, 10/18/2011 - 07:46 | 1784469 gigeze787
gigeze787's picture

GS bad news to get the stock cheap enough to go private and give up bank status...?

Tue, 10/18/2011 - 07:47 | 1784472 EZT
EZT's picture

fried calamari greek style

Tue, 10/18/2011 - 07:47 | 1784474 Irish66
Irish66's picture

Bank of China gave them a nice balck eye

Tue, 10/18/2011 - 07:49 | 1784479 John Bull
John Bull's picture

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...

Tue, 10/18/2011 - 08:36 | 1784617 Esso
Esso's picture

"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.

Tue, 10/18/2011 - 07:49 | 1784480 ss123
ss123's picture

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.

Tue, 10/18/2011 - 07:52 | 1784488 GeneMarchbanks
GeneMarchbanks's picture

There's nothing wrong with that.

Tue, 10/18/2011 - 07:50 | 1784483 PaperBear
PaperBear's picture

Not so 'Master of the Universe' are they now.

Tue, 10/18/2011 - 07:52 | 1784486 PaperBear
PaperBear's picture

Watch CFTC bottle the position limits decision today.

Tue, 10/18/2011 - 07:52 | 1784489 Hansel
Hansel's picture

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.

Tue, 10/18/2011 - 07:55 | 1784491 PaperBear
PaperBear's picture

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.

Tue, 10/18/2011 - 07:57 | 1784494 Seasmoke
Seasmoke's picture

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

Tue, 10/18/2011 - 07:57 | 1784496 PaperBear
PaperBear's picture

Here we go again. Gold down $28 at $1640/oz and silver down $1.20 at $30.50/oz.

Tue, 10/18/2011 - 08:00 | 1784504 Turd Ferguson
Turd Ferguson's picture


This is nothing but The Cartel flexing their muscles ahead of the CFTC meeting today.

Tue, 10/18/2011 - 08:07 | 1784526 SilverIsKing
SilverIsKing's picture

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.

Tue, 10/18/2011 - 08:07 | 1784524 EL INDIO
EL INDIO's picture

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.

Tue, 10/18/2011 - 08:09 | 1784528 SilverIsKing
SilverIsKing's picture

Dangerous if someone is throwing 100 oz bricks at your head.

The real danger is in not owning any.

Tue, 10/18/2011 - 08:18 | 1784558 EL INDIO
EL INDIO's picture

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.

Tue, 10/18/2011 - 08:44 | 1784636 JohnG
JohnG's picture

That's what she said.

Tue, 10/18/2011 - 07:59 | 1784497 jjsilver
jjsilver's picture

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.

Tue, 10/18/2011 - 07:59 | 1784498 reader2010
reader2010's picture

Bloomberg will conveniently blame it on the OWSers. 

Tue, 10/18/2011 - 08:46 | 1784641 MonsterBox
MonsterBox's picture

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.

Tue, 10/18/2011 - 09:25 | 1784761 Bob
Bob's picture

Here's one of those hippies saying very clearly why he's there:

Tue, 10/18/2011 - 08:00 | 1784501 Archimedes
Archimedes's picture

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!

Tue, 10/18/2011 - 08:02 | 1784507 jjsilver
jjsilver's picture

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!!

Tue, 10/18/2011 - 08:06 | 1784520 reader2010
reader2010's picture

Fraudsters always fail to learn from history and always think this time is different for them. 

Tue, 10/18/2011 - 08:04 | 1784510 Nobody special
Nobody special's picture

Wonder what those numbers would say if assets were marked to market.  Until they are, this is all smoke and mirrors.

Tue, 10/18/2011 - 08:05 | 1784511 FJ
FJ's picture

GS needed to post a loss in order to pacify the protesters. Very clever.

Tue, 10/18/2011 - 08:06 | 1784519 lunaticfringe
lunaticfringe's picture

I lubs me some cheap gold and silber. I shorely does.

Tue, 10/18/2011 - 08:07 | 1784525 msmith
msmith's picture

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.

Tue, 10/18/2011 - 08:09 | 1784530 Mae Kadoodie
Mae Kadoodie's picture

The 1% just got a little smaller.

Tue, 10/18/2011 - 08:13 | 1784540 junkyardjack
junkyardjack's picture

Its all relative so they'll drag down the rest of us

Tue, 10/18/2011 - 08:11 | 1784537 Archimedes
Archimedes's picture

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.

Tue, 10/18/2011 - 08:15 | 1784543 PaperBear
PaperBear's picture

Welcome to the bitch economy, Goldman Sachs.

Tue, 10/18/2011 - 08:18 | 1784546 Mentaliusanything
Mentaliusanything's picture

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;_ylt=AgRR0AATPUCmgYTupSEJLsm7YWsA;_ylu=X3oDMTFkOWRpMzUzBHBvcwMzBHNlYwNjb21tdW5pdHlTZW50aW1lbnQEc2xrA2Nyb2NzaW5jY3JveA--?s=CROX

Tue, 10/18/2011 - 08:16 | 1784550 PulauHantu29
PulauHantu29's picture

"Very Bullish" they should say just like they said the devastating meltdown in Japan "is very Bullish for their economy."

Tue, 10/18/2011 - 08:16 | 1784551 PaperBear
PaperBear's picture

The manipulators are desperate to have gold/silver go down with the market indices.

Tue, 10/18/2011 - 08:16 | 1784554 Hephasteus
Hephasteus's picture

It's ok it's goldman. I'm sure the shareholders will mail them the 84 cents per share they hold that they owe.

Tue, 10/18/2011 - 08:19 | 1784562 beaker
beaker's picture

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.

Tue, 10/18/2011 - 08:51 | 1784660 jomama
jomama's picture

unfortunately, it's just not holding a candle to 2-ply.

but that might just be me.

Tue, 10/18/2011 - 08:20 | 1784564 Scalaris
Scalaris's picture


* 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.

Tue, 10/18/2011 - 08:21 | 1784569 campag
campag's picture

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 ?

Tue, 10/18/2011 - 08:36 | 1784619 somethingelse
somethingelse's picture

Maybe they have a so-called "Rogue Trader" like UBS who lost the $2.5 Billion on those 2 days?

Tue, 10/18/2011 - 08:50 | 1784655 Tyler Durden
Tyler Durden's picture

That update comes when the 10Q is released. Usually within 10-15 days of the earnings release.

Tue, 10/18/2011 - 08:24 | 1784579 JPM Hater001
JPM Hater001's picture


Tue, 10/18/2011 - 08:24 | 1784581 firstdivision
firstdivision's picture

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?

Tue, 10/18/2011 - 08:29 | 1784598 williambanzai7
williambanzai7's picture


Tue, 10/18/2011 - 08:31 | 1784601 mtthw2
mtthw2's picture

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.

Tue, 10/18/2011 - 08:35 | 1784613 Josh Randall
Josh Randall's picture

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:

Tue, 10/18/2011 - 08:35 | 1784614 Hyper Entropy
Hyper Entropy's picture

I guess this means I should apply for a job there.

Tue, 10/18/2011 - 08:37 | 1784622 Zgangsta
Zgangsta's picture

You mean we've finally found something that's not bullish??

Tue, 10/18/2011 - 09:54 | 1784829 Zgangsta
Zgangsta's picture

And GS is green.  I guess it was bullish...

Tue, 10/18/2011 - 08:42 | 1784628 Davilis
Davilis's picture

Epic buying opportunity.  Goldman going private in 5... 4... 3... 2...

Tue, 10/18/2011 - 08:43 | 1784629 Note to self
Note to self's picture

This feels like it was cooked purposely for PR reasons - - show that the squid is fallable.

Tue, 10/18/2011 - 08:44 | 1784635 Johnny Lawrence
Johnny Lawrence's picture

And GS is up $1.00 pre-market.

Explain that.

Tue, 10/18/2011 - 08:44 | 1784638 RobotTrader
RobotTrader's picture

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......"

Tue, 10/18/2011 - 11:11 | 1785220 Tsunami Wave
Tsunami Wave's picture

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."

Tue, 10/18/2011 - 08:45 | 1784640 digalert
digalert's picture

Things that make you go...


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

Tue, 10/18/2011 - 08:47 | 1784646 warchopper
warchopper's picture

And the stock is up premarket...along with BofA.

Tue, 10/18/2011 - 08:50 | 1784653 strangeglove
strangeglove's picture

How much of a Tax refund will they earn?

Tue, 10/18/2011 - 08:58 | 1784680 Esso
Esso's picture

$666 trillion.

Tue, 10/18/2011 - 09:33 | 1784781 Solid Gold Bubble
Solid Gold Bubble's picture

Must.. open.. green...

Tue, 10/18/2011 - 11:01 | 1785165 Where My Dawg At
Where My Dawg At's picture

I knew you kids would enjoy this.

Tue, 10/18/2011 - 11:37 | 1785420 bruinjoe93
bruinjoe93's picture

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.

Wed, 10/19/2011 - 23:27 | 1791419 Hephasteus
Hephasteus's picture

Farmers don't like it when crows shit all over their scarecrows but that's the price you pay for using strawmen.

Tue, 10/18/2011 - 12:55 | 1785744 SRV - ES339
SRV - ES339's picture

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)!

Tue, 10/18/2011 - 14:03 | 1786005 I only kill chi...
I only kill chickens and wheat's picture

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.

Do NOT follow this link or you will be banned from the site!