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 The congratulations going to Goldman, Sachs & Co. (NYSE:GS) for its surprisingly strong first-quarter earnings is quickly turning into dismay and disbelief among financial blogs upon seeing how the bank left December 2008 -- one of the worst months for banks -- out of the results. Dubbed the "orphan month" by The New York Times' Floyd Norris, Goldman changed its fiscal year when it converted to a bank holding company, and thus was able to cull December's performance (when conveniently the bank suffered some serious losses) from their first-quarter results. Floyd writes: "One way was to hide a lot of losses in not-so-plain sight. Goldman's 2008 fiscal year ended Nov. 30. This year the company is switching to a calendar year. The leaves December as an orphan month, one that will be largely ignored...The orphan month featured -- surprise -- lots of write-offs. The pretax loss was $1.3 billion, and the after-tax loss was $780 million." The "orphan month" is already generating much cynical commentary in the blogosphere. John Hempton writes: "Am I surprised that Goldies had an 'orphan month' and stuffed the bad news in it? No. If you were -- then obviously you are new to investment banking." While Paul Krugman comments: "This is Bush-style budgeting, with sunsets and all that which made the true costs of policies disappear, but this time applied to the private sector. Add to this the questions about reported profits at other financial institutions, and you get the feeling that what we're seeing isn't so much green shoots as smoke and mirrors." - George White See Floyd Norris' NY Times post See Bronte Capital post See Paul Krugman post
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