Goldman Sachs Earnings Decline

Goldman Sachs reported that its third quarter earnings fell to $1.9 billion, or $2.98 a share, from $3.19 billion, or $5.25, earned in last year's third quarter.

The company commented on the issue:

"The firm continues to manage its capital conservatively."

It looks like exactly that brought about the decline.

"Our third quarter result reflects solid performances across our business", said Lloyd Blankfein, Goldman’s Chief Executive Officer.

Somehow I get the idea that something is awfully wrong with this picture. Revenue goes down by 2 billion and the CEO says all is fine and dandy.

Trading and principal are the areas where Goldman Sachs is losing ground. If somebody would look into that swiftly, it could be handled and the company would be a star in regards to the fourth quarter results. But with just blaming the economy "...while economic condition continues to be challenging in numerous important markets..." nothing gets handled.

Goldman Sachs is large enough that they can make the economy instead of sitting on the sides and blaming it. Goldman Sachs has an average of 173 billion in excess liquidity. That is an awful lot of cash. To put it into perspective: The 2010 U.S. budget was $130 billion for overseas contingencies, primarily the wars in Iraq and Afghanistan, or to compare it to another figure: The $173 billion is about one fourth of what the U.S. spends on social security per year.

If you are in this range, you can no longer blame the economy.