Tuesday, December 2, 2008

Goldman faces $2 billion loss, maybe it's really $5 billion!

Goldman Sachs has been downplaying estimates for their quarter for six weeks and now the WSJ says the loss could be $2 billion:

Goldman Sachs Group Inc., known for avoiding many of the blowups that have battered its Wall Street rivals, now is likely to report a net loss of as much as $2 billion for its quarter ended Nov. 28, according to industry insiders.

The loss, equal to about $5 a share, would be more than five times as steep as the current analyst consensus for the Wall Street firm, as it faces write-downs on everything from private equity to commercial real estate.

Though analysts and investors already were bracing for Goldman's first quarterly loss since it went public in 1999, the pessimism has grown sharply. "The last two weeks have been nothing short of horrible, with asset prices coming under ever more pressure than before," said Susan Katzke, an analyst at Credit Suisse Group, who on Monday reduced her Goldman estimate to a fiscal fourth-quarter loss of $4 a share. Previously, she projected a profit of $2.47 a share. Goldman is expected to report its financials in a few weeks.

http://online.wsj.com/article/SB122818833059071519.html

A $2 billion loss for "$150 oil" Goldman Sachs? After $10 billion from the Government? After $10 billion in an equity raise? Does anybody really believe that Goldman's loss is contained?

Sell it until it gets a three-handle.

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