Oh what fun today!
Last time Mr. Blankfein testified before Congress he was a little bit testy – letting Congress know in no uncertain terms that they were wasting his time and preventing him from doing “God’s work.” That work gave Goldman Sachs an Operating Profit of $7.37Bn on $9.62Bn in sales (77%) in Q4 but this quarter the Opertating Profit was “only” $5.2Bn on $14.4Bn in sales (36%) mainly because of a $5.9Bn jump in SG&A (ie. bonuses). Yes the Lord is certainly smiling down on Goldman and all of their alumni.
Lloyd is batting clean-up this afternoon and The Pragmatic Capitalist has a very nice copy of his prepared remarks along with layman’s translation to help get us ready. Blankfein’s prepared comments are short as his major job, the one he is getting the big bucks for, is damage control. By getting the last word, Lloyd will be able to “spin” the prior testimony and give his supporters some talking points, which is going to be critical because even our “friendbuddypal” Jim Cramer has seen which way the populist wind is blowing and, like a rat fleeing a sinking ship, is now saying the GS charges are “NOT frivolous” and the firm will have to settle or pay $2-3Bn in fines. I certainly hope the Daily Show does outtakes of this along with Cramer’s vigorous defense of Goldman with his “inside” information that he shared with CNBC viewers the day the charges came out that prevented the sheeple from getting out before things got worse. Sadly, the video was pulled from CNBC’s web site already but they do have this text:
The SEC this morning charged Goldman with securities fraud, Reuters reported, claiming the bank sold to unwitting investors a subprime mortgage CDO, called ABACUS, that was both put together and shorted by hedge fund Paulson & Co. Fabrice Tourre, the 31-year-old Goldman vice president primarily responsible for creating the CDO was charged with fraud as well.
But Cramer countered those charges, citing his own sources, by saying that Goldman was “not shooting against the client.” In fact, he said that Goldman had invested about $90 million in the ABACUS CDO.
“My information is that Goldman Sachs was an investor in this particular security,” Cramer said, “not a short seller.”
“I think that’s a very important fact,” he said, adding that while he couldn’t reveal his sources, he did say they “indicate that this is true.”
That “may explain the incredible confidence they had,”…
