Are the reported earnings of the financial sector stocks (such as Goldman Sachs) legitimate?
Posted by admin
guitarman asked:
The financials led the big increase in the Dow today. This makes no sense. Goldman Sachs stock is on fire right now. I mean it is hotter than hot. They continue to post massive earnings. I don’t understand this. Many of these firms were about to go under a few months ago and then they received bailout money. Some of these firms still have an enormous amount of toxic debt/ toxic assets. And credit is still tight. Are these earnings legitimate or are they the result of creative accounting techniques?
Daiwa Fishing Reels
The financials led the big increase in the Dow today. This makes no sense. Goldman Sachs stock is on fire right now. I mean it is hotter than hot. They continue to post massive earnings. I don’t understand this. Many of these firms were about to go under a few months ago and then they received bailout money. Some of these firms still have an enormous amount of toxic debt/ toxic assets. And credit is still tight. Are these earnings legitimate or are they the result of creative accounting techniques?
Daiwa Fishing Reels
January 17th, 2010 at 1:40 pm
In my opinion, no. The figures themselves are accurate in so far as they go, but much of their viability comes from the fact that they did receive massive amounts of money from the government bailout. Until such time that every cent of that money is paid back to the government, they should not be considered to be profitable to my way of thinking. That doesn’t mean however that someone might not make a tidy profit by buying their stock and reselling it as it continues higher. Easy short selling. I think that the overall stability of the company however is still in doubt for the reasons you gave…i.e. toxic assets and debt.
January 17th, 2010 at 10:12 pm
Goldman was not into the toxic asset mess as much as the other companies and like it or not mortgages are only a portion of the activities that these banks take part in. Goldman in particular has been able to pick up market share due to the decline of companies like Bear Stearns and Lehman. Trading activities have been extremely profitable for the banks thanks in part to the activity of the FED. Basically yes the numbers are real. You are not going to get a major accounting firm signing off on your statements if they were not. If you think results are so easy to fake then don’t you think these companies would not have reported the massive writedowns they have been taking?
January 20th, 2010 at 12:39 pm
first you need to go and get educated about finance because it you obviously don’t understand anything about the stock market. Second, on which document do you find reported earnings? Third, have you ever heard of the SEC or Sar-bans- Oxley, and no its not a skateboard.
How do you expect anyone to be fabricating earnings after what just happened? Were you asleep during the tsunami? Have you not seen what happens to people that steal? (Madoff)? You are a complete dork!
January 20th, 2010 at 8:08 pm
After Bernie Madoff you have to wonder don’t you.
~
January 21st, 2010 at 4:17 pm
Goldman Sachs did not get in as much trouble as their competitors. Now that their competitors are either out of business or much smaller, it is logical that they will do better. They should repay all of their TARP moey as soon as Obama is willing to take it.