Without the leverage they used to have how are they making these profits? Are these real profits or are they pulling a fast one on everyone?
And those same guys would have taken down GS if the government decided not to bail out the entire financial industry.
meredith whitney had some good commentary on goldman before earnings yesterday when she upgraded them to buy. basically she said since goldman underwrites a ton of the debt issued recently then that is a huge short term boost to their earnings. she said her call isn't a long term call on goldman but a trading call. she also upped her earnings estimate to 4.65 v. the 3.54 estimate. gs obviously came out and reported an even better number at 4.93 but her estimate was much closer than other analysts out there. also, let's not forget that the market has bounced a ton off of lows.
They have the best people on the Street, hands down. That's why they paid back the TARP money asap -- they knew they'd lose all of their people otherwise.
Greenwald... Go read the whole thing... http://www.salon.com/opinion/greenwald/2009/07/13/goldman/index.html
There is an article in Rolling Stone this month called Inside The Great American Bubble Machine, subtitled Matt Taibbi on how Goldman Sachs has engineered every major market manipulation since the Great Depression. Rolling Stone is certanly not what you would call a credible informed source for financial news, even if the article didn't basically read like a paranoid conspiracy theory. But it is somewhat emblematic of the fact that there is a whole lot of general ill will for and suspicion of GS out there right now.
Oh please save that answer for the children. GS was given the golden life jacket by Henry "Bazooka" Paulson which was a backdoor handshake and guaranteed their survival. Add to that GS converted from investment bank to a holding bank last year which allowed them to tap into TARP slushfunds created solely for the purpose of rewarding Hank's old pals on Wall Street.
Relatively speaking, they were not one of the big houses on mortgage back securities. A lot of their exposure were on the secondary market and CDS, which for the most part they were on the right side of the betting game.
Still better than being on the other side, plus you don't know if GS also hedged their exposure some where else.
Haha, nice. Garbage in, garbage out. Had a friend in b-school who went to work for Lehman as a Securitization Analyst, turning down a job in Goldman's fixed income IB group. Oops.
Thank you for stating the obvious. CDS is toxic poison for all parties involved, the gambler and the underwriter. In this case AIG was the fat cat that saved all these pigs from getting slaughtered. 12.9 billion was the figure on GS http://www.nytimes.com/2009/03/16/business/16rescue.html
