Global Economic Analysis is one of my favorite blogs. It is much more bearish than I am in general, but he made a great catch on the recent Goldman earnings that were such a catalyst for the big market rallies over this past week.
How To Beat The Street (the old fashioned way)
Bloomberg is reporting Goldman Sachs Profit Falls 53%, Less Than Estimated. Here is the key snip:
Goldman's so-called Level 3 assets, which are the hardest to value, rose to about 8 percent of the firm's total assets from about 7 percent in the prior quarter, Viniar told analysts. The increase was largely related to commercial real estate loans that were moved from Level 2, where assets are valued in part using market prices, to Level 3.
Goldman has $873 billion in assets. That means Goldman moved $8.73 billion in commercial real estate loans from Level 2 "Mark To Model" to Level 3 "Mark To Fantasy". Something tells me Goldman did not like the answer their model was giving them.
I wonder how the markets would have reacted if this little bit of sleight of hand hadn't been done.
skip to main |
skip to sidebar
"Financial Advice is a tale told by an idiot, full of sound and fury, signifying nothing."
No comments:
Post a Comment