No surprise that brokerage firm results are deteriorating, and at least Goldman is still profitable and idd a tad better than anticipated….although I haven’t dug into the numbers to see how solid those profits are. But bad numbers from Goldman would not have gone over at all well this week.
From the Wall Street Journal:
Goldman Sachs Group Inc. posted a 70% drop in fiscal third-quarter net income on declining client activity and asset valuations as return on equity fell….
The slightly better-than-expected results on the earnings front — though far worse from the second quarter — serve as a small relief for shareholders who had been looking to the quarterly results from Goldman Sachs, one of the only two remaining big investment banks, for clues as to how bad things have gotten amid the crisis on Wall Street.
Still, many worries remain as Goldman’s latest numbers show even a firm that in the past was seen as golden is being badly hurt by deteriorating market conditions. Shares of Goldman fell 7.3% to $125.75 in recent premarket trading.
Bloomberg’s story covered similar ground but with a downbeat title:on the news summary page: “Goldman Profit Slumps 70%, Biggest Drop Since Company Went Public in 1999.”
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goldman beat numbers on a lower tax rate. Normalize the tax rate and the number was a $0.30 miss. AUM down. But of course comp to revenue flat at 48%. Totally unbeliveable. Just can;t help themselves. i don;t think talent flight is a problem at this stage.
Hardly surprising. You can’t make much money as an investment bank if nobody’s doing deals. Pretty much the only thing going on at the moment is restructuring and low-fee issues by sovereigns, supranationals and agencies.
Read-through on commodities:
they made more money this q on commodities than they did last year…since q-ended Aug 31 and commodities got mauled in July and Aug…good chance they were net short. i know that sounds insipid…but they’ve been big time commodity/EM bulls (at least in oil)
disclosure: long gs (this is NOT an endorsement to buy/hold/sell gs…merely color on commodities)
They need to hire Paulson back. He’ll get the ship righted!
Maybe they will after the election …. if they are still around .
Johan said…
They need to hire Paulson back. He’ll get the ship righted!
September 16, 2008 10:53 AM
where does the talent fly to?
Yee Haw! Look at my +GSMT Jan@100 puts go! Still $30 out-of-the-money and already trading well over $10!
[Lackey’s note: Mr Mundy is spending far too much time in his Trading Bunker, where he has “Ice Station Zebra” running on at least three of his monitors. At last report he was seen spinning in his chair cackling “I’m Rich, Byatch!” An American nouveau riche, and a Texan at that… the Horror… I’d retire to Brighton, but he pays too well and also has my passport.]
When others are losing their heads, only losing your ass is a win. —And GS only lost its lunch! Not bad, in context. We have at least one crew of universal masters running before the wind . . . until we don’t.