The big gains in financials are nothing more than selling opportunities for insiders. They know exactly what is coming down the pipe and are simply using the intervention coupled with media hype to lure in new buyers. Even Goldman Sachs will be in rough shape next week.

Da boyz are consistent - VHF

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Goldman's Cracks: Earnings Set to Slide

Goldman Sachs Group might not be so golden this quarter.

The Wall Street investment bank has hardly emerged unscathed from the credit crunch. But compared with Lehman Brothers Holdings and Merrill Lynch, Goldman has made it look easy.

Not so this quarter. When the firm reports earnings on Sept. 16, it won't be pretty.

There is no obvious sign of big trading losses. But the third quarter wasn't kind to most of Goldman's businesses, as trading activity and investment-banking business swooned.

In recent weeks analysts have cut earnings estimates to $2.13 a share, or $953 million, from $3.29 a share Aug. 15, according to Thomson Reuters. That probably remains too high. The few analysts at $1.50 a share may look smartest. Goldman earned $6.13 a share, or $2.85 billion, in the year-earlier period.

The main culprit: Trading volumes across certain products dropped drastically in August. For example, monthly U.S. equity volumes fell 30% year-on-year, according to NYSE Euronext. This drop will ripple through a host of Goldman's operations. Less client trading will cut into profitable businesses such as prime brokerage. This is all likely to hit the firm's principal and trading-business line, which accounted for 59% of revenue in the second quarter.

Investment banking, another profitable business, also has been weak. In August, for example, Goldman's completed mergers-and-acquisitions volume fell almost 60% globally from 2007, according to Thomson Reuters.

And there are likely to be write-downs from the firm's $17 billion commercial real-estate portfolio.

Investors are in for a shock. Goldman is mortal after all.

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Global banks may incur $0.4-$0.5 tln writeoffs: Deutsche Bank
09.05.08, 8:31 AM ET

FRANKFURT Sept 5 (Reuters) - Sept 5 (Reuters) - The global banking sector will likely incur a further $0.4 trillion to $0.5 trillion in writedowns, of which the European banking sector is expected to take $0.2 trillion, according to Deutsche Bank.

The brokerage also downgraded the European banking sector to a 'small underweight' from a 'small overweight,' and said higher inflation would drive a policy response of higher rates, reducing gross domestic product (GDP) growth and increasing bad debts.

'In practice, GDP growth appears to be slowing independently of any policy response, under the weight of credit denial and falling asset prices,' the brokerage said.

The brokerage cut its estimates for 16 European bank stocks, and raised its aggregate bad debt charge for the sector to 69 basis points from 47 basis points.

Deutsche Bank said its top picks were Credit Suisse AG , DnB NOR and BNP Paribas.

Its top stocks to avoid included Nordea , Svenska Handelsbanken , Commerzbank , Banco Pastor and Banco Popular .