Goldman Sachs net plunges

[FourScore]

Source: Reuters

Goldman Sachs Group Inc (GS.N) said on Tuesday third-quarter earnings plunged 70 percent as one of the worst market slumps ever weighed on banking and trading results.

The largest U.S. investment bank reported net income of $845 million, or $1.81 a share, for the quarter ended August 29, down from $2.85 billion, or $6.13 a share, a year earlier. Net revenue fell by half to $6.04 billion from $12.3 billion.

"This was a challenging quarter as we saw a marked decrease in client activity and declining asset valuations," Lloyd Blankfein, Goldman's chief executive, said in a statement.

The results come as the year-long credit crunch gains steam. Six months after Bear Stearns collapsed and was acquired by JPMorgan Chase (JPM.N), Lehman Brothers Holdings Inc (LEH.P) on Monday filed for bankruptcy protection while Merrill Lynch & Co (MER.N) rushed into the arms of Bank of America Corp (BAC.N)...



Read more: http://news.yahoo.com/s/nm/20080916/bs_nm/goldmansachs_dc

[dkf]

1. Hey at least they are making money.

[bemildred]

2. Where did Lehman's $600 billion debt come from?

Didn't Lehman's have "earnings" too? What sort of "earnings" is it that turns into $600 billion in obligations?

[dixiegrrrrl]

3. counterfiet earnings

Same thinking that turns a house that sold in Cal. for 800 K in 2007
( people kept buying because of perceived resell value )
into a house that no one can afford to buy for 100 K in 2008

[bemildred]

4. Yah. Fake everything. nt.

[dixiegrrrrl]

5. Just found this

really good explanation also:
from another post, quoting Huffington:

http://www.huffingtonpost.com/hale-stewart/from-one-disaster-to-anot_b_126442.html


So, let's sum up all the points made above.

1.) Incomes shrank for most Americans over the last expansion.

2.) But Americans kept spending thanks to a mammoth increase in household debt.

3.) To increase the amount of debt in the system, lending standards were lowered.

4.) Lowered lending standards have led to a higher default rate from borrowers.

5.) Higher default rates have lowered the value of all the collateral backed by mortgages.

6.) Lowered collateral values have killed the balance sheets of literally every major financial company.

[Scooter24]

6. That's what happens when a bank loans itself $30 Billion...

to try and take the bad debt off its balance sheets.

[Scooter24]

7. .

[Scooter24]

8. As I said before, Goldman will probably be the only investment bank left...

after this crisis is over with. All the others will be gobbled up by the large commercial banks throughout the world.

If Goldman can survive, which I predict they will, their position going forward as the the country's only dedicated investment bank will give them more power and prestige.

[pointblank]

9. ...

Cuz I'm praying for rain
and I'm praying for tidal waves
I wanna see the ground give way.
I wanna watch it all go down.
Mom please flush it all away.
I wanna see it go right in and down.
I wanna watch it go right in.
Watch you flush it all awaaaaaaaaay.



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