Goldman: Strike Three in Q4

Superman is dead, Mighty Casey Struck Out, and Goldman Sachs Group Inc reported its only quarterly loss as a publicly traded corporation and is spinning the same song every other mortal on the Street that loss is good news because it could have been much worse. Income in the entire company suffered and writedowns overwrote revenue from from all sources, resulting in a $1.58 billion dollar revenue hit.

Writedowns topped $5 billion, and revenue from investment banking businesses, including merger advisory and underwriting, dropped 31 percent.

Then the bank infamous for its aggressive compensation schedule decimated it in the wake of the Q4 results.

Amid these declines, Goldman slashed its compensation and benefits spending for the year by 46 percent to around $10.93 billion, or $364,000 per employee.

And in what must have seemed like piling on Moody's cut mighty Goldman's credit rating, after the bank reported and it was too late for investors to do anything, but cut them none the less.

Moody's Investors Service cut its Goldman credit rating to A1 from Aa3 and said the firm's outlook remains "negative," citing its vulnerability to credit markets and a difficult operating environment.

Meanwhile Goldman's minions blame the switch from investment banking for the quarterly loss,

"We were an investment bank for 139 years and a bank holding company for three months. We're still a little new at this game," Chief Financial Officer David Viniar said on a conference call with reporters.

and note the bank still generated a fiscal year 2000 it profit despite the difficult conditions.

“Our results for the fourth quarter reflect extraordinarily difficult operating conditions, including a sharp decline in values across virtually every asset class,” said Lloyd Blankfein, chairman and CEO of Goldman. “While our quarterly performance obviously didn’t meet our expectations, Goldman Sachs remained profitable during one of the most challenging years in our industry’s history.”

We point out that it is not Goldman Sachs that's changed but the credit conditions as Blankfein says and that without Warren Buffett and Uncle Sam Goldman Sachs most certainly would not have turned a profit for the year. And of coarse Goldman Sachs is most potent profit generator, insider connections were in play again. In addition to the $10 billion hand out from Uncle Sam the bank was able to raise $3 billion disguised as a rescue of AIG, orchestrated by CEO and US Treasury secretary Henry Paulson.

The largest recipients were Societe Generale, which got $4.83 billion, Goldman Sachs with $2.97 billion, Deutsche Bank AG with $2.92 billion, Calyon Securities with $1.89 billion and Merrill Lynch & Co. with $1.32 billion, the person said.

And you can be sure that Goldman will continue to play both ends against the middle and sell out their clients at every profitable opportunity. Then in the "Have too much gal to believe if I didn't see it myself" category, we have the Golden Tin Man with one hand held out to wage earners for their scraps of TARP, pushes it's profits to off shore tax havens with the other.

which got $10 billion and debt guarantees from the U.S. government in October, expects to pay $14 million in taxes worldwide for 2008 compared with $6 billion in 2007.

The company’s effective income tax rate dropped to 1 percent from 34.1 percent, New York-based Goldman Sachs said today in a statement. The firm reported a $2.3 billion profit for the year after paying $10.9 billion in employee compensation and benefits.

So it wasn't only profits that fell at Goldman Sachs, but the tax rate that dove straight to the 1% mark.

The tax-rate decline may raise some eyebrows because of the support the U.S. government has provided to Goldman Sachs and other companies this year, Willens said.

“It’s not very good public relations,”

I think we all know by now that public relations is not what concerns the Golden Godfather.

So, the credit bubble has burst, Goldman Sachs has become a bank meaning that its insiders have got theirs and gotten out. Now they're sticking the rest of the to us.