God Bless Goldman!

Goldman Sachs is reporting a "robust turnaround" in performance (says the NY Times.)

That "robustness" translates into net earnings of $3.44 billion just for the second quarter of 2009.

According to their own press release, GS business highlights include:

*Ranking first in worldwide announced M&As for the year-to-date
*Record quarterly net revenues of $736 million in equity underwriting
*Repurchase of their stock form the TARP Capital Purchase Program

It's been a heck of a great year for Henry Paulson's old employer....

According to today's NY Times story:

"Many analysts are likely to welcome the news as another sign that the financial industry is stabilizing, and the Goldman results will probably set a positive tone for a slew of other bank results expected in the coming week. Other banks like JPMorgan Chase have been emerging as strong players since last year’s financial troubles, and analysts also expect them to record strong results, again partly on the back of robust trading revenues.

But Goldman’s performance in particular is raising questions about how its rapid return to making strong profits will be perceived by lawmakers and taxpayers who helped it with the multibillion-dollar cushion last fall after the nation’s financial industry was shaken to its foundations.

Goldman, along with other banks, also benefited from a government program that allows banks to issue debt cheaply with the backing of the Federal Deposit Insurance Corporation. In addition, it received money from the government’s bailout of the American International Group, being paid 100 cents on the dollar for its $13 billion counterparty exposure to the insurer."

There is no doubt that God's grace shines brightly on Goldman this year.

But according to a story by Mortimer Zuckerman in today's WSJ, God's casting a less benevolent eye on the rest of the country:

"The recent unemployment numbers have undermined confidence that we might be nearing the bottom of the recession. What we can see on the surface is disconcerting enough, but the inside numbers are just as bad.

The Bureau of Labor Statistics preliminary estimate for job losses for June is 467,000, which means 7.2 million people have lost their jobs since the start of the recession. The cumulative job losses over the last six months have been greater than for any other half year period since World War II, including the military demobilization after the war. The job losses are also now equal to the net job gains over the previous nine years, making this the only recession since the Great Depression to wipe out all job growth from the previous expansion."

Zuckerman, who is the editor in chief of US News and World Report, then goes on to give ten gloomy reasons why "we are in even more trouble than the 9.5% unemployment rate indicates," and includes facts like: no wage gains in June for people outside of Goldman's lucky orbit; the average length of unemployment increasing to 24.5 weeks, the longest period since the government started tracking this data in 1948 and factories operating at just 65 percent of capacity. Here's Zuckerman's downer of a top ten list:

- June's total assumed 185,000 people at work who probably were not. The government could not identify them; it made an assumption about trends. But many of the mythical jobs are in industries that have absolutely no job creation, e.g., finance. When the official numbers are adjusted over the next several months, June will look worse.

- More companies are asking employees to take unpaid leave. These people don't count on the unemployment roll.

- No fewer than 1.4 million people wanted or were available for work in the last 12 months but were not counted. Why? Because they hadn't searched for work in the four weeks preceding the survey.

- The number of workers taking part-time jobs due to the slack economy, a kind of stealth underemployment, has doubled in this recession to about nine million, or 5.8% of the work force. Add those whose hours have been cut to those who cannot find a full-time job and the total unemployed rises to 16.5%, putting the number of involuntarily idle in the range of 25 million.

- The average work week for rank-and-file employees in the private sector, roughly 80% of the work force, slipped to 33 hours. That's 48 minutes a week less than before the recession began, the lowest level since the government began tracking such data 45 years ago. Full-time workers are being downgraded to part time as businesses slash labor costs to remain above water, and factories are operating at only 65% of capacity. If Americans were still clocking those extra 48 minutes a week now, the same aggregate amount of work would get done with 3.3 million fewer employees, which means that if it were not for the shorter work week the jobless rate would be 11.7%, not 9.5% (which far exceeds the 8% rate projected by the Obama administration).

- The average length of official unemployment increased to 24.5 weeks, the longest since government began tracking this data in 1948. The number of long-term unemployed (i.e., for 27 weeks or more) has now jumped to 4.4 million, an all-time high.

- The average worker saw no wage gains in June, with average compensation running flat at $18.53 an hour.

- The goods producing sector is losing the most jobs -- 223,000 in the last report alone.

- The prospects for job creation are equally distressing. The likelihood is that when economic activity picks up, employers will first choose to increase hours for existing workers and bring part-time workers back to full time. Many unemployed workers looking for jobs once the recovery begins will discover that jobs as good as the ones they lost are almost impossible to find because many layoffs have been permanent. Instead of shrinking operations, companies have shut down whole business units or made sweeping structural changes in the way they conduct business. General Motors and Chrysler, closed hundreds of dealerships and reduced brands. Citigroup and Bank of America cut tens of thousands of positions and exited many parts of the world of finance.

What we've learned is that sharply focusing the nation's recovery efforts on rescuing the financial community has been highly beneficial to Goldman Sachs.

But not so beneficial for anyone else in America.

Seems that God now blesses just the Goldman among us....