Saturday, August 8, 2009

Goldman's State of the Market – August 2009

“Proprietary and Confidential” yet all over the internet, if you haven’t seen their August “State of the Market” update, I will say that there is a lot of good data and charts inside – most of which has been covered on this site, but not all.

Of course you have to wade through 99 pages of material, 20% of which is written by their legal department. They offer trading “suggestions…” and I know it’s tempting to just do the exact opposite of what they say, but they do seem to be almost as negative as me on the economy and present some pretty good data.

Keep in mind that anytime you read something from Goldman, you should first; put on gloves, wash your monitor thoroughly, and if you print anything be sure to give your printer some TLC as it’s awfully traumatic to force such evil karma through the wiring and circuit boards. In fact, Google may want to hire a priest to exorcize their servers now.

But first I just want to point out a couple of charts that caught my eye…

Note that of all the places in the world, the good old USofA is experiencing the worst current account balance – by far! Oh so proud…



This is a chart that’s making the rounds in various forms, but GS sure made it pretty, so here it is – S&P earnings. Oh yeah, earnings are doing much better. Gee, that chart’s slope looks just like the slope of the stock market over the past six months… NOT. Stock prices are ultimately driven by earnings! Even those earnings are WAY OVER INFLATED due to the financial industry’s return to mark to fantasy and their HIDING of derivatives and off balance sheet DEBT. Thanks GS. While I don’t really believe in Hell, if there is such a place I’m sure most of you will be welcomed very WARMLY.



Hey, at least they admit that CRE (commercial real estate) probably has a way to go on the downside. What caught my eye here is the Commercial Mortgage Backed Securities (the securitization of commercial mortgages) is effectively DEAD. GOOD!





Santana – Evil Ways (GS Theme Song!):