James Moore: Goldman once more leads the pack, but what's really going on is anyone's guess

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The Independent Online

Outlook That great vampire squid wrapped around the face of humanity relentlessly jamming its blood funnel into anything that smells of money? Well let's put it this way, there's nothing wrong with its nose.

Goldman Sachs is still sniffing out deals like a genetically engineered bloodhound and was leading the banking pack (again) yesterday, posting revenues that breezed past the expectations of the scribblers on the street of dreams. Of course, those scribblers have a tricky time of it when it comes to forecasting Goldman's results.

The top earning division in yesterday's quarterly numbers was institutional client services, the various trading activities that the bank carries out for customers, which racked up $5.1bn (£3.2bn), down a bit but nobody's really worried.

However, at No 2 was the Investing & Lending operation, the unit which covers the bank's deployment of its own money. It is this which causes the forecasters difficulties.

Investing & Lending was created in 2011, supposedly to counter criticism of a lack of transparency, but it didn't do all that much to help Goldman watchers who still aren't really sure what's going on inside it.

That could be seen in the spread of their revenue forecasts, which ranged between $1bn and $2.2bn, the sort of spread that suggests they're basically reduced to sticking their fingers in the air to see in which direction the wind is blowing and then making guesses.

History suggests that when Investing & Lending is good – as it was yesterday – it is very good. But when it is bad, it surely is ugly, as was the case when it tipped the bank into a rare quarterly loss back in 2011.

As we know, the squid is driven by a corps of fiendishly clever workaholics. The reason it does so well and can afford to cock a snook at its critics is that clients are very keen to have those people on their side. Small wonder.

But for the sake of the financial world generally, not to mention the American taxpayer, we'd better hope that whatever it is that those people are doing with Goldman's (as opposed to clients') money continues to prove successful.