Goldman-Sachs Posts $1.8 Billion 1Q Profit, Looks to Sell Stock, Repay TARP

#1

Post by ojbyrne » Tue, Apr 14, 2009, 2:25 AM UTC

Goldman-Sachs Posts $1.8 Billion 1Q Profit, Looks to Sell Stock, Repay TARP
money.cnn.com

Re: Goldman-Sachs Posts $1.8 Billion 1Q Profit, Looks to Sell Stock, Repay TARP

#2

Post by ashishk » Tue, Apr 14, 2009, 3:28 AM UTC

this is fantastic news, though i guess it makes sense. goldman attracts the most talented folks just by winking at them.

Re: Goldman-Sachs Posts $1.8 Billion 1Q Profit, Looks to Sell Stock, Repay TARP

#3

Post by ilkhd2 » Tue, Apr 14, 2009, 3:52 AM UTC

Goldman Sachs is one of not many who had been behaving prudently. Next news would probably be "Chase is doing good.." or some other obvious thing brought as revelation.

Re: Goldman-Sachs Posts $1.8 Billion 1Q Profit, Looks to Sell Stock, Repay TARP

#4

Post by ajju » Tue, Apr 14, 2009, 4:05 AM UTC

Accounting regulations were changed last week [1] so that banks do not have to "mark to market" in "inactive markets" anymore. Since Goldman Sachs is now a bank holding company, they don't have to do this either. What is now a ~2B profit would probably have been a far greater loss by the old rules.

[1] http://www.reuters.com/article/governmentFilingsNews/idUSN09...

Re: Goldman-Sachs Posts $1.8 Billion 1Q Profit, Looks to Sell Stock, Repay TARP

#5

Post by gills » Tue, Apr 14, 2009, 4:17 AM UTC

As you watch democracy die to thunderous applause, remember to subtract the $10 billion of government funding and the $13 billion looted from the taxpayers through AIG face-value swap repayments.

Re: Goldman-Sachs Posts $1.8 Billion 1Q Profit, Looks to Sell Stock, Repay TARP

#6

Post by smanek » Tue, Apr 14, 2009, 4:18 AM UTC

ashishk wrote: post #2

this is fantastic news, though i guess it makes sense. goldman attracts the most talented folks just by winking at them.

There's an old joke that a new MD at Goldman is looking to hire 5 new analysts for his department.

The new MD goes to his old boss and asks, "What should I do? I have 10 resumes from 10 great candidates, who all went to Ivy League school, graduated with perfect GPAs and all interviewed very well. How do I decide who to hire?"

The old boss asks to see the pile of resumes, and gives them a quick glance. He then shuffles the pile of resumes, throws the top five in the garbage, and hands the new MD the remaining five and says, "Hire these five."

The new MD is shocked - he exclaims, "Is this how Goldman Sachs does is hiring?! It's so capricious!"

The old boss responds, "It isn't capricious. Goldman Sachs doesn't hire unlucky people - and all the resumes I threw out belong to unlucky people."

Re: Goldman-Sachs Posts $1.8 Billion 1Q Profit, Looks to Sell Stock, Repay TARP

#7

Post by ajju » Tue, Apr 14, 2009, 4:22 AM UTC

ashishk wrote: post #2

this is fantastic news, though i guess it makes sense. goldman attracts the most talented folks just by winking at them.

Goldman's secret to "success" in this instance is the freshly changed accounting rules (see my comment elsewhere) and in the recent past has been the patronage of ex-Goldman Sachs CEO and now treasury secretary Paulson.

Re: Goldman-Sachs Posts $1.8 Billion 1Q Profit, Looks to Sell Stock, Repay TARP

#8

Post by j2d2 » Tue, Apr 14, 2009, 4:27 AM UTC

ajju wrote: post #4

Accounting regulations were changed last week [1] so that banks do not have to "mark to market" in "inactive markets" anymore. Since Goldman Sachs is now a bank holding company, they don't have to do this either. What is now a ~2B profit would probably have been a far greater loss by the old rules. [1] http://www.reuters.com/article/governmentFilingsNews/idUSN09...

Interestingly, they're sitting on over $100B cash and cash equiv.

http://finance.yahoo.com/q/bs?s=GS&annual

Re: Goldman-Sachs Posts $1.8 Billion 1Q Profit, Looks to Sell Stock, Repay TARP

#9

Post by ajju » Tue, Apr 14, 2009, 4:31 AM UTC

j2d2 wrote: post #8

ajju wrote: post #4

Accounting regulations were changed last week [1] so that banks do not have to "mark to market" in "inactive markets" anymore. Since Goldman Sachs is now a bank holding company, they don't have to do this either. What is now a ~2B profit would probably have been a far greater loss by the old rules. [1] http://www.reuters.com/article/governmentFilingsNews/idUSN09...

Interestingly, they're sitting on over $100B cash and cash equiv. http://finance.yahoo.com/q/bs?s=GS&annual

With accounts payable of $257B, so the cash doesn't really mean that much and a net ~64B assets-liabilities and all those numbers are from Nov '08

Re: Goldman-Sachs Posts $1.8 Billion 1Q Profit, Looks to Sell Stock, Repay TARP

#10

Post by mattobrien » Tue, Apr 14, 2009, 4:34 AM UTC

ashishk wrote: post #2

this is fantastic news, though i guess it makes sense. goldman attracts the most talented folks just by winking at them.

This is most likely not fantastic news. This is most likely terribly misleading news. As noted, suspending aspects of mark-to-market undoubtedly helped their bottom line. And who knows how much of these "profits" were the result of one-time payments from the government via AIG. There is so much opacity with all banks' financial statements that trusting them seems unwise. Wells Fargo claimed they had record profits in Q1, and just today an analyst estimated that Wells actually needs at least another $50 billion. Who do you trust - people effectively talking up their own books, or independent observers who still see huge problems ahead?