The Washington Post better be careful or else Goldman might hire another swarm of attorneys to sue the newspaper for talking about the company. Yesterday Goldman reported a first quarter profit (forecast-busting, they say!) of $1.81 billion. Pretty impressive in this climate. Too bad Goldman somehow forgot about a few small losses in December that they skipped over. Because they shifted to being a bank, they changed their quarter and somehow - who knows how - overlooked almost $3 billion in commercial real estate losses. Yes, it's legal because of the change in quarterly reporting but it hardly signals a healthy Goldman Sachs. If anything it only highlights the high slime factor of this menace. Of course, they get away with whatever Washington allows them to get away with.
The company included a page of charts in its Monday news release showing its December results, but it didn't include a narrative description of those results as it did for the January-through-March period. In a conference call with analysts yesterday, Chief Financial Officer David A. Viniar said the firm incurred $2.7 billion in "fair value losses" in December, meaning losses related to declines in the value of assets it holds. Among those write-downs were $1 billion for "non-investment grade loans," Viniar said, according to a transcript.Obviously too much discretion if they can choose to ignore $2.7 billion for now.
Viniar told analysts that the company faced "a difficult market environment" in December.
Michael Williams, director of research at Gradient Analytics, which specializes in examining corporate accounting, said companies have a lot of discretion in deciding when to recognize gains and losses.
