You Really Gotta Read the Fine Print

[tengers]

Sooooo you think a 1st quarter report needs to show the December before if its really bad? OK. Page 10 of the accompanying press release.
http://www2.goldmansachs.com/our-fir...1-earnings.pdf

Yes, I saw this document, but given the circumstances, you would have thought that the report which basically compares the 1st quarter of 2009 with the last quarter (through Nov 28) of 2008 would have mentioned in the executive summary a $1.3 Billion hit in December. And while it is true that the data on page 10 is there, it is never discussed, nor is there an explanation as to what happened that caused the losses, which were very significant. But all this aside, there was a great big deal in this country with stocks taking off because people read the executive summary of the report and said whooppee. The executive summary should have said, this is a special first quarter report, which also covers the last month of December 2008, as the Bank has changed its reporting period to match that of other institutions. During the month of December we lost $1.3Billion, however during the first quarter of 2009, we are reporting earnings of $1.8 Billion. Then you understand what they did.

[Cruella]

But you know why they did. There will be reference to Dec 08 in the annual accounts for this year. Standard procedure is that you compare first quarters to first quarters anyway.

[tengers]

Cruella, this is what I see going on. The Fed and the Treasury Dept have effectively taken control of American Finances, which not only includes the money supply, but now includes a $12.8 Trillion Bailout Plan and the future tax stream of the United States. The personell running the Fed and the Treasury for the past few years come from the top banks and GS. The Fed refuses to disclose where the $12.8 Trillion is going, claiming that they are not obligated under the FOIA regulations to disclose that information because they are not part of the US Government, although this money is effectively coming from the US Treasury and is backed by tax streams and the people of the United States. Bloomberg's sued for this information in the NY Courts. The previous Treasury Secretary (from GS) essentially tried to set himself up above every political body in the country in the Bailout legislation. He was only partially successful, but he was completely successful in keeping the entire affair in-house by putting it all under Treasury or the Fed with only the $700 Billion subject to any scrutiny at all. The Fed also required Fannie and Freddie to buy junk in the market to the tune of $40 Billion a month to create a "market for it" and to allow the banks to divest themselves of this stuff over time. They also want Ginnie to play now. All of the mortgage relief programs that were yakked about are essentially doing nothing as only a small number of people actually fall into these categories of relief. Therefore the Fed, which is essentially the Banks "Super Board of Directors" are performing stress tests, that they will not explain to the public, nor allow the banks to release information on, because the small banks aren't doing too bad and the large banks own all this junk that they want to transfer to the taxpayers. The stress test is testing the capitalization of the banks under the present economic conditions and also under more strained conditions, but the test is a "trade secret".

Now all of this stuff is supposedly founded on a mortgage situation where homeowners supposedly wrecked the economy by borrowing more than they could pay back, but the entire US home real estate mortgage market is worth aboyt $8 Trillion and perhaps 5% of loans are in some form of default. The market has declined from about $10 trillion, but most people are paying their mortgages even thoiugh they are upside down. So 5% of say $8 to $10 trillion is maybe $500 Billion, soaking wet. Let's double it for good measure and pick up the commercial and consumer junk and call it a Trillion. So WHY the hell are people running out the back door with a $12.8 trillion line of credit with a bunch of cash, that's what Bloomberg and I want to know and probably a bunch of Tea Party guys, who think that this is Obama's doing. As for GS, they took $10 Billion in Bailout money and a bunch of warrants for maybe another Billion or Two. They want to pay the money back because they are concerned that executive salaries and bonuses will be put under control, if they have TARP money. The whole bonus issue was quietly sidelined after the public uproar. In order to give the money back, GS decided to sell $5 Billion worth of stock and just prior to this sale, they released the aforementioned results, shouted "Gold!" in the mining camp and their price went up and they sold the stock. Perhaps after the miners figured out what happened, the price dropped back down. Now as I said, GS buys and sells 5% of the NYSE trades and most of it was not for clients, but for their own holdings. The United States Congress, while they hold hearings and all that, actually control almost nothing. Of the $3.5 Trillion in Federal spending, the amount that is discretionary is small, most is mandated and people like Obama have little control and all of these people, whether Congress or Obama have virtually no control over the $12.8 trillion because, they won't even tell you where its's going. There is now a big hoo-haa about Bank Stress Tests, but all this is designed to do is to figure out how much to recapitalize the banks or rearrange the upper deck chairs on the ship, no one is paying attention to steerage, where the compartments are flooding.

[Cruella]

tengers, I'm in the middle of writing my annual report at the moment, which is dicking with my ability to concentrate!

Genuine request: Please could you break your post up into paragraphs so I can have some small chance of following you properly? I may not respond for a while, but I find the fact that you're so informed - and passionate - fascinating, and wonderful.

[tengers]

Cruella, this is what I see going on. The Fed and the Treasury Dept have effectively taken control of American Finances, which not only includes the money supply, but now includes a $12.8 Trillion Bailout Plan and the future tax stream of the United States.

The personell running the Fed and the Treasury for the past few years come from the top banks and GS. The Fed refuses to disclose where the $12.8 Trillion is going, claiming that they are not obligated under the FOIA regulations to disclose that information because they are not part of the US Government, although this money is effectively coming from the US Treasury and is backed by tax streams and the people of the United States. Bloomberg's sued for this information in the NY Courts.

The previous Treasury Secretary (from GS) essentially tried to set himself up above every political body in the country in the Bailout legislation. He was only partially successful, but he was completely successful in keeping the entire affair in-house by putting it all under Treasury or the Fed with only the $700 Billion subject to any scrutiny at all.

The Fed also required Fannie and Freddie to buy junk in the market to the tune of $40 Billion a month to create a "market for it" and to allow the banks to divest themselves of this stuff over time. They also want Ginnie to play now. All of the mortgage relief programs that were yakked about are essentially doing nothing as only a small number of people actually fall into these categories of relief. Therefore the Fed, which is essentially the Banks "Super Board of Directors" are performing stress tests, that they will not explain to the public, nor allow the banks to release information on, because the small banks aren't doing too bad and the large banks own all this junk that they want to transfer to the taxpayers. The stress test is testing the capitalization of the banks under the present economic conditions and also under more strained conditions, but the test is a "trade secret".

Now all of this stuff is supposedly founded on a mortgage situation where homeowners supposedly wrecked the economy by borrowing more than they could pay back, but the entire US home real estate mortgage market is worth about $8 Trillion and perhaps 5% of loans are in some form of default.

The market has declined from about $10 trillion, but most people are paying their mortgages even thoiugh they are upside down. So 5% of say $8 to $10 trillion is maybe $500 Billion, soaking wet. Let's double it for good measure and pick up the commercial and consumer junk and call it a Trillion. So WHY the hell are people running out the back door with a $12.8 trillion line of credit with a bunch of cash, that's what Bloomberg and I want to know and probably a bunch of Tea Party guys, who think that this is Obama's doing.

As for GS, they took $10 Billion in Bailout money and a bunch of warrants for maybe another Billion or Two. They want to pay the money back because they are concerned that executive salaries and bonuses will be put under control, if they have TARP money. The whole bonus issue was quietly sidelined after the public uproar.

In order to give the money back, GS decided to sell $5 Billion worth of stock and just prior to this sale, they released the aforementioned results, shouted "Gold!" in the mining camp and their price went up and they sold the stock. Perhaps after the miners figured out what happened, the price dropped back down. Now as I said, GS buys and sells 5% of the NYSE trades and most of it was not for clients, but for their own holdings.

The United States Congress, while they hold hearings and all that, actually control almost nothing. Of the $3.5 Trillion in Federal spending, the amount that is discretionary is small, most is mandated and people like Obama have little control and all of these people, whether Congress or Obama have virtually no control over the $12.8 trillion because, they won't even tell you where its's going. There is now a big hoo-haa about Bank Stress Tests, but all this is designed to do is to figure out how much to recapitalize the banks or rearrange the upper deck chairs on the ship, no one is paying attention to steerage, where the compartments are flooding.

Here you go

[Cruella]

Thank you very much. Be back later, or possibly tomorrow, depending.