Goldman Sachs was treated like a rock star by the media as it delivered its fiscal second-quarter 2009 earnings report in an almost party-like atmosphere. Unlike the company’s first quarter results, where the press pounded Goldman for hiding losses in an orphaned month of December, this quarter barely heard a foul word, which is evidence that Goldman Sachs is frontrunning more than just their clients.

The headline numbers intended to be jaw-dropping were just that.  Witness:

Somehow, the company did manage to mention the level of level 3 assets for the quarter.

Level 3-According to the Goldman Sachs earnings report ( page 4 )level 3 assets were approximately 50 $4 billion as of June 26, 2009 (down from $59 billion as of March 27, 2009) and represented 6.1% of total assets.

Then there are threats which are not measured by the normal metrics of finance. Despite all the privileges, insider information, political connections and market manipulation, the record profits piggied on the back of credit spreads seem more and more like a one-off event.

“The big sandout= fixed income, currency, and commodities- is blowing up not only from less competition, but a steep yield curve thanks to low interest rates and continued volatility in debt. The other moneymakers, equity and debt underwriting, have the wind behind their backs as companies from all industries exploited market optimism to raise capital in the second quarter.”

And raising capital is how Goldman Sachs repaid its TARP funds with interest.

The positive earnings come even after the firm’s one-time preferred dividend of $426m, included in the $10.04bn repurchase of TARP preferred stock from the US Treasury Department. Goldman completed a public offering of 46.7m common shares at $123 per share for total proceeds of $5.75bn in an effort to boost capital.

The bank raised $5 billion in the first quarter and another $5 billion in the current quarter to repay the $10 billion it raised from the government. The funds did not come from earnings. The company’s level of cash raised did not change one iota.

Nor has the company balanced its loans from the shadow banking system and Chief Financial Asshole David Viniar indicates it has no intention to.

Chief Financial Officer David Viniar said on a conference call with analysts today that there are no call provisions on the $30 billion of government-guaranteed debt that Goldman issued between November and March so the firm isn’t able to buy it back.

And while you struggle to swim with the deadweight of $43 billion to bailout the executives bonuses, and the global economy careens toward another Great Depression, the company and its cheerleaders do not understand what you do not understand.

James Reynolds, chief executive officer of Loop Capital Markets LLC in Chicago, said criticism of Goldman Sachs’s success was misplaced.

Government’s Intention

“This is what the government investment was meant to do,” Reynolds said in an interview. “I just don’t understand why the country, or a working person in Michigan, Ohio or Kansas, would cheer against Goldman doing well just because the government invested in Goldman at a time when the financial markets were in chaos.”

Well, James, let’s see if we can help your misunderstanding. The out-of-the-loop working person really believed the government’s investment wasn’t meant to pay billions of dollars in bonuses to the people who broke their company and crashed the economy. Imagine their surprise, James.

And while Goldman’s employees move into their new mansions, the wacky working people in Michigan, Ohio or Kansas are moving into the unemployment lines as their homes are foreclosed because Goldman created the chaos the financial markets are in. See, James, Goldman Sachs gets a strong assist for blowing the housing bubble, too. I know how frustrated you are James, but homeless hungry people just don’t see things clearly. Try to understand the little people, James.

Chief Executive Officer Lloyd Blankfein, after repaying the government’s bailout money along with $426 million in dividends to taxpayers, is reverting to a business model analysts deemed irretrievably broken during the global credit crisis. While rivals including Morgan Stanley have pared risks, Goldman Sachs has increased them this year.

“The wind is at their back, so their earnings numbers are going to be very strong,” said Jon Fisher, a portfolio manager at Fifth Third Asset Management in Minneapolis, which oversees about $18 billion. “I think numbers are going up. I think they repeat this quarter next quarter and the quarter after that.” Fisher said Fifth Third doesn’t own the shares now and will probably buy them in the next few weeks.

Down boy.

First by reverting to a business model that was irretrievably broken by the credit crisis, they do not have the wind at their backs, nor do they have record profits coming they way for all eternity. As Goldman Sachs monopolizes itself in the chilly shade of Ponzi finance, its ever increasing gains come over shares of an ever decreasing market. Implosion is sure to follow.

In addition they did not repay the Treasury a single cent. Goldman simply loaned the treasury $10 billion of its own money, your money. The piggy bank is still there to stick in the not so dark shadow banking system.

Fisher said Fifth Third doesn’t own the shares now and will probably buy them in the next few weeks.

Is Fisher talking about Goldman Sachs shares? Fisher is a liar. Why wait? Why not buy them now? Because Fisher wants you to buy shares of Goldman Sachs and he is happy to sell you his, after he gets a few more points up of course. Who said pump and dump wasn’t legal?

“This stock’s move up is exhausted,” said Luis Benguerel, a trader at Interbrokers Espanola in Barcelona who looks at technical indicators such as Bollinger Bands. “Not even today’s earnings may keep the shares at these technically high levels.”

The only busniess model that Goldman Sachs uses is the unseen and unspoken one, the the one not mentioned by the media and analyst phonies. There are fewer players, but the game is the same. Goldman Sachs does not take risks; it transfers risk and wealth in different directions. Care to take a guess which way what goes?