Only squidding: Goldman Sachs reported a huge 91% jump in net earnings from the first quarter of 2009 (which was four days shorter than this year), but if the Squid thought that would make the SEC go away, it was very much mistaken. As this report from the financial website Marketwatch reveals, analysts were not going to be put off by the Goldman earnings or the defence. The UK financial regulator has started an inquiry, Germany could follow and there are mutterings from elsewhere. Goldman’s woes are not going to fade away. Watch the next quarterly results for the cost of legal fees. Goldman has hired a former White House lawyer who is claimed to be “close” to president Barack Obama. The bank wants this to go away. The Republican candidate for the old Illinois Senate seat of the President was forced to return over $50,000 in donations from Goldman Sachs employees this week. The mud is sticking.

That’s a lotta squids: But looking at the numbers there were other questions. While a strong result, it wasn’t as good as the Goldman cheer squad tried to claim. We have to remember that a year ago, financial markets were still in recession and only starting to rebound, fuelled by the record low interest rates on offer from the Fed, the Bank of Japan and the European Central Bank. Those rates are still there and that’s money for jam for big aggressive investors such as Goldman and other top-level banks such as Citi and JPMorgan.

Really squidding: The quarterly profit of $US3.46 billion was larger than any analyst had. Revenues rose 36% to $US12.78 billion, thanks to $US7.39 billion in revenue in the fixed-income business. The investment banking unit saw revenues rise by 44% from a year ago to $US1.18 billion. However, they were off by 28% from the prior quarter. Goldman’s accounts compare the March quarter with the same quarter of 2009 and the final quarter of 2009. All banks around the world have to provide those comparisons now. Because the first quarter of 2009 was so depressed, a more accurate comparison should be the sequential one, with the December quarter when the markets and economy were much stronger than a year ago. On that comparison, the latest results were LOWER, $US3.296 billion from $US4.787 billion in the December quarter (and $US1.659 billion a year ago).

Really, really squidding: It was only the strong result from the trading business (using the cheap central bank money), that powered Goldman home. In fact total revenues in the December quarter were $US9.61 billion against the much larger $US12.78 billion in the final quarter of last year. The $US4.1 billion boost in revenues in the trading and principal investments area (to $US9.19 billion) had nothing to do with the economic recovery and everything to do with Goldman Sachs’ way of doing business. The $US7.39 billion in fixed interest trading revenues (bonds of all kinds) was the big driver. This is akin to the old business model of Goldman Sachs as a huge investment bank. That’s now broken out into a smaller division covering broking, advice, etc. Now it’s a commercial bank, a move overseen by the Fed. Nothing in this result shows that it is a commercial bank, like JPMorgan. You’d have to wonder if US regulators are turning a blind eye to the likes of Goldman for other reasons.

Bad luck Rupe. Rupert Murdoch will have to add the Daily Mail and General Trust to his list of digital demons (already headed by the BBC in the UK and the ABC in Australia) after the London-based media group (the Daily Mail tabloid is its biggest asset) told investors it would not ask readers to pay for general news content online, but only for mobile access and “niche content”. Martin Clarke, publisher of Mail Digital, told a London conference that “Readers will not pay to consume general news on the web”.

Defiance: Clarke told the conference that DMGT’s advertising-based strategy would make a lot of money. “MailOnline – uniquely among UK newspaper sites – is now big enough to make the advertising model pay,” he said. UK Audit Bureau figures show that MailOnline was the most popular UK newspaper website in January and February of this year, with an average 2.27 million unique browsers every day. Clarke said on Monday that “staying free” would allow DMGT to expand its news brand internationally. That’s contrary to the approach of the Murdochs, Rupe and James, who condemn everyone opposed to their paywall stance. They plan to charge people for access to their Times and Sunday Times websites from June. The Sun and the News of The World will follow. The Mail‘s news might force that to change.

Hardly stirring: The oomph seems to have gone from the sales growth of Harvey Norman Holdings. It said yesterday that its nine-months sales rose 2.2% to the end of March, while like-for-like sales for the same period increased by 1.4% compared with the corresponding period in 2009. At the 31 December halfway mark, the company said headline sales were up 4% and like-for-like sales were up 2.5%. So it looks as though the sales growth has almost halved. No wonder shareholders didn’t like the numbers and sold the shares down 5% yesterday, or 18c to $3.39, the lowest since last August.

Blame the stronger dollar: Harvey Norman said there was a negative impact on sales from currency depreciation, following a 2.9% fall in the New Zealand dollar, a 13.6% drop in the euro and a 21.6% decline in the British pound. Selling prices in Australian dollars would have also fallen on imported goods from Asia, especially China and especially consumer electronics. That was an extra $100 million in top line sales for the three months compared with a year ago. Unlike the 9 month report in 2009, Harvey Norman actually cut the amount of information released yesterday, omitting to give top line and like-for-like sales growth figures for the three months to March 31.

Throwing good money after Greece? European Central Bank Governing Council member Axel Weber said Greece may require assistance of up to 80 billion euros, not the 45 billion suggested by the recent deal involving the ECB and the IMF. The Wall Street Journal reported that Weber also told legislators that Greece’s situation was worsening and that “the numbers are changing all the time.” Volcanic ash cloud willing, the fate of Greece’s finances will start being decided in Athens tonight, our time, when the country’s government, the IMF, the ECB and the European Commission sit down to complete the horsetrading over the 45 billion euro financial backstop and how it’s to be used.

More than an eruption: There are reports Greece is happy with the cuts it has so far promised, and won’t be offering any more. Regardless, we seem to be about to start a slow motion default that could last several years. There’s a few figures we should keep in mind that will tell us that Greece has no chance of surviving in its present form, default-free, unless there’s a sugar plum fairy out there to help. First off Greece needs to raise 50 billion euros of new money for each of the next five years to roll over existing debt and pay interest. That’s around 250 billion euros, or about equal to the country’s 2009 GDP. Last night’s excellent ABC program Foreign Correspondent revealed the sheer futility of anyone looking for Greece to mend its ways.

An Olympus-sized debt: The IMF has already told the finance ministry informally that Greece’s debt will reach 150% of GDP by 2014, according to media reports in Europe. Greece’s debt-to-GDP level of 113% at the end of last year was the highest in the eurozone. The IMF reckons Greece will need to find 120 billion euros of new money (or $US162 billion) over the next three years. An Olympian task if ever there was one.

Growth burst looms? An outbreak of growth in Europe and the world would help, especially for oil and other commodities carried in Greek-owned ships. Tourism could improve if the euro stays low, but that will be more a function of poor growth prospects for the eurozone than any boom. The IMF will lift its 2010 growth forecast to 4% when it reveals its new World Economic Outlook tonight. That will be up from 3.1% last October and a 3.9% forecast in January. There’s a forecast of 4.3% for 2011. Greece won’t be sharing in much of that. The IMF is also worried about Government debt, and it is also worried about inflation and it is also worried that governments will take their stimulus packages away too early. It worries a lot, doesn’t it, and runs around like an out-of-work fireman looking for a blaze.