Goldman Sachs Beats Estimates On Trading. Or Is It Stealing?

Just a few off the cuff remarks. The street knew Goldman was going to beat. The stock is pretty much stuck in neutral today. I just went to the Edgar database to see if their quarterly results were posted yet. Not available yet.

So without quarterly results, I'll just think out loud a little. One, it will be interesting to see how much in taxes they pay this year. Last year Goldman paid a 1% tax rate while receiving massive bailouts both implied and in actual cash from the American people. They give some bullshit answer as to why this is so. Something about international earnings mix. Maybe they could clarify this for us given Americans now have to pay Goldman's bonuses ad infinitum with all of the bailouts they received. Two, much of the earnings was trading. Trading and derivatives contracts are a a zero sum game. So, who lost at Goldman's expense? Well, first of all society lost. Goldman is trading against its clients and the American people. And, secondly, since they almost surely took much of that money from other U.S. financial institutions who are also trading, society lost again if government is invoked to bail out firms again in the future. Additionally, many people are questioning if Goldman is involved in illegal trading that is effectively stealing. Barry Ritholtz remarked on this a week or so ago. And, so have quite a few other bloggers.

It's good to be the king. Not much longer though.