Tuesday, April 14, 2009

It's gone!

This morning when I read about the blow out, amazing, super duper wow results at Goldman Sachs I admit the cynic in me rose up. Your job, should you decide to accept it, will be to find the lie.

Analysts are flipping over rocks to look where slithery things lurk. Voila, a slippery creature seems to have been found! December is the month when most of us celebrate a major holiday. Gifts are exchanged, good cheer and fellowship reign. December tends to boost retail sales and waistlines. So it comes as a remarkable discovery that, rather like the Grinch, Goldman Sachs has canceled December!

That's right, gone. With the stroke of a pen, December has been banished from Goldman's results. If true, this is a Madoffian exhibition of chutzpah. Last year, along with Morgan Stanley, Goldman Sachs transformed itself into a card carrying, goverment supported, FDIC wallowing bank. There were many reasons for this with regard to capital raising issues. One reason I did not foresee was the new calendar. From Julian, to Gregorian, now to the Goldman calendar.

Goldman Sachs previously had a November ending Fiscal year end. When making the change to bank it took on a January to December fiscal year. In December Goldman apparently lost $2.15/share, but it fell into limbo between reporting periods. Add it to the first quarter results just announced and the performance is just a little below consensus expectations rather than far above.

Several weeks ago Citibank leaked a memo celebrating great results. Last week it was Wells Fargo's half story of earnings. Now Goldman Sachs. I must say, it is weakening. Is it any wonder Diogenes never found his honest man?

John Barnyak