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What Does a “Dismal” Quarter Look Like for Goldman Sachs?

July 20th, 2010

Goldman SachsGoldman Sachs had a relatively dismal Q2 with earnings per share dropping 83% to 78 cents. But “relatively” is what matters. Relative to Q1, where in 63 trading days GS did not lose even once, and according to their SEC filings, they netted at least $100M on 35 different days. According to Zero Hedge, “the statistic probability of this event is itself statistically undefined. Goldman is now the market…Goldman is the house, it controls the casino, and always wins.”

A perfect or near-perfect record of profitable trading even during the worst of times, GS is a de facto monopoly earning risk-free profits; those risk free profit are someone else’s loss, and that someone else is you. It will be interesting to see their SEC filings, particularly the 10-Q when that’s available, to see how “dismal” this quarter really was for GS. My guess: not very.

If the recent past is any indicator, we need only look to their 2Q 2009 filings.  There was a lot of fallout after the total financial implosion in late 2008 and second quarter of 2009 was marked by some tumult in the markets. During that quarter, GS brought in close to $5 Billion, and lost money only on two trading days.  They had forty-six days netting over $100M.

But there’s nothing wrong with the economy (LULZ!). This isn’t a malfunction. This isn’t an anomaly.  This is exactly what’s supposed to happen.  The markets are doing exactly what they’re designed to do, which is to “concentrate real economic power for the State and its beneficiaries”.

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  • Matt says on: August 6, 2010 at 4:18 pm

     

    I would argue that the concentration of real economic power is not for the State, but rather for the very few who comprise the most powerful corporate interests. From this perspective, I’d also argue that the State is the beneficiary if we define the State as being those who make the laws, and the direct benefit being the retention of power. Semantics I suppose, but I wanted to get your take.

    • David Z says on: August 6, 2010 at 4:55 pm

       

      Semantics :) kind of a distinction without a difference – they’re really one-and-the-same in my book. I think it’s probably true that the largest corporations wield more power over the government than the government does over those corporations, as long as they don’t step too far out of line.

no third solution

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