Clearly, we have very few investors here. Everyone on this thread is acting like the $3 Billion writedown (NOT A WRITEOFF) is going to shock Wall Street.
The only IDIOTS/DUMBSHITS who think this $3B writedown is a big deal is the amatuers on this board who have no clue!
Let me clue you in...
Mike Mayo, an analyst at Deutsche Bank, is ALREADY forecasting a $3.5bn writedown by Goldman for the quarter due to its exposure to leveraged loans and commercial mortgage-backed securities.
Lehman has ALREADY adjusted estimates for GS and MS citing asset write downs and investment losses. The firm lowered GS Q1 EPS to $1.95 from $2.10 and MS to 93c from 97c. Lehman is ALSO expecting GS to writedown depreciation.
Wachovia ALREADY expects an ugly Q1 for brokers but also said in their research that they would focus on firms that have managed to grow book, not dilute shareholders, and have better capital positions. Wachovia believes LEH and GS are better long-term investments and will recover faster than MER, BSC, and MS. Wachovia expects a $2 billion writedown.
Banc of America ALSO already expects GS to have writedowns. They lowered their estimates by 27% overall as they assume incremental markdowns on LBO commitments/loans and RMBS & CMBS inventories and that the investment banking environment has continued to soften. They cut estimates on GS by 45%! They also cut LEH by 43%, MS by 15%. Once again, $3B writedown will be NO SUPRISE!
And HERE IS A DIRECT QUOTE from back in FEBRUARY...
"The world knows this quarter stinks for Goldman, as well as the others," says Glenn Schorr at UBS. "Goldman has tipped off investors for months that they make mistakes like everyone else. In addition there is a keen focus on expenses. However, the firm (GS) still does well with trading profits and risk management."
Translation? This writedown was foreshadowed back in February! Again, no suprise!
Should I continue?
Fox Pitt cut GS Q1 EPS estimates back in the middle of February to $2.58 from $5.30 and FY08 EPS estimate to $19.87 from $21.52 citing continued challenges in the credit market, leveraged lending, and corporates in particular. Fox Pitt also wrote BACK IN FEBRUARY they expected GS to have $2.7B Q1 write-downs.
Punk Ziegel is another firm that does not expect GS's Q1 results to be good (compared to previous quarters) as the values of some of its core assets declined this quarter. However, they also said they would much rather HOLD the stock than sell as they believe the book value is understated, not overstated.
Credit Suisse lowered their 2008 EPS estimates on GS back in February to $19.50 from $21.25. They cited reductions in the leveraged loan book, private equity mark downs, and weakness in investment banking activity. They maintained their Outperform (which obviously the stock has not outperformed in the last 30 days) and maintained their Target Price of $275.00.
ALL THESE ANALYSTS HAVE ONE THING IN COMMON...They all expect GS earnings to be way down compared to last quarter and they ALL forecasted a writedown WELL BEFORE the London Telegraph "broke the news."
Guess what? It's not breaking news. Everyone on Wallstreet already knows.
Look for GS to RALLY HARD on the UPSIDE...at least 10%!
Visa IPO IS BEING PRICED TOMORROW...Goldman the lead along with JP.
.75 bp cut tomorrow will also cause a rally!
Look people. I'm a New Yorker. I know people who know people. GS will beat! Bank on it.
People. Listen up! The fees alone from Visa's upcoming IPO will generate roughly $480-$500 million in fees for the associated investment banks according to the registration statement with the SEC. JP Morgan and Goldman Sachs are the lead on what is expected to be the biggest IPO ever. JP got shares, Goldman is getting most of the underwriting fees.
The IPO is on and will be priced tomorrow. My buddy over at Cantor..."I do hear that the deal is on and is expected to be strong," said Sal Morreale.