The post title sounds like an Irving Wallace book, but as the articles below indicate/speculate, there is definitely a truth-stranger-than-fiction story behind Goldman’s (and Merrill’s) missing December.
Consider that Goldman Sachs lost $1.3 billion in December — compared to $2.12 billion for the entire previous three months. Merrill Lynch, too, took at least $8.1 billion of losses in December, compared to $5.9 billion in November.
A variety of theories have been posited, including everything from a massive currency trade to bets on subprime mortgages. Doubts plague us, however. What we do know is this: Merrill Lynch declined to disclose its fourth-quarter earnings at all, even though it was still an independent company at the time.
We’re simply here to kick off what we have already deemed the Q1 ‘09 Earnings Season Clusterf*ck. You will most likely be deceived, tricked, and possibly even lied to. But, it’s cool, because everyone is all of a sudden profitable out of NOWHERE. We just want to tell our readers not to place too much weight or emphasis on this earnings season simply because if the earnings already reported are any indication, this past quarter took place in Candyland, not recessionary America. So, keep on your toes and don’t put on any big positions before these releases… you’ll have better luck at blackjack or baccarat.
Economic Policy Journal: The Goldman Sachs Three Card Monte Act
Was Goldman fully protected on their own? Maybe, maybe not, depending on how much insurance Goldman actually bought. But, what van Praag is doing is, like an expert three card monte shark, keeping you focused on the wrong card. While everyone is focused on the card van Praag is playing with, the real action is the card left over on the other side. That card is the wholesale liquidation of AIG portfolios at fire sale prices that Goldman and money center banks were able to flip for billions in profits at the expense of the taxpayer.
And then there’s goldmansachs666, of course.