Dimming the Aura of Goldman Sachs

[ShockediSay]

Source: NYTimes

Goldman Sachs reported a $1.8 billion quarterly profit this week, and sold $5 billion in new stock at a triple-digit share price. It appears to have weathered the financial crisis as well or better than any of its competitors. It made money on mortgages when the making was good, and somehow got out before the explosion devastated its competitors....

Goldman’s explanations sometimes do not ring true, even if they are. When it announced its profits this week, it buried an important fact in the tables on page 10 of a news release, and did not mention it in the text of the release. That fact was that Goldman had lost a lot of money in December, which would have been part of the quarter had the firm not changed its fiscal year. As a result, that loss does not show up in any quarterly number. Goldman won’t say if a December-to-February quarter would have been profitable.

Was Goldman’s disclosure misleading? Legally, no. There was full disclosure. But the existence of the orphan month, with its big loss, was largely overlooked in the initial news stories. When it was reported later, Goldman was left looking as if it had tried to pull a fast one.

Read more: http://www.nytimes.com/2009/04/17/business/economy/17norris.html

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More accounting gimmickry in play for bonus bums.