Whitney's Ready With the Goldman Smackdown

Paging Meredith Whitney. Paging Meredith Whitney. What do we do if Goldman (GS - commentary - Trade Now) pulls a JPMorgan (JPM - commentary - Trade Now)? Do we hope for a congressional investigation? Do we call our representative and demand the stock go lower? Perhaps put a ceiling on it?

Yep, that's what happens when we get to the moment we are in where we know that Meredith doesn't like it up here but we begin to see visions of $30 earnings per share for 2010 in our heads, and we are trying to figure out how it doesn't get a 7 multiple -- about half of everything else in the sector even though it is at least twice as good?

Meredith, how about a Goldman Sachs windfall profits tax?

Yep, see, what Whitney's forgotten is that the price-cutters -- the equivalent of the Costcos (COST - commentary - Trade Now) and the Wal-Marts (WMT - commentary - Trade Now) (I am talking about Lehman and Bear) are all gone. The multiples are expanding on sales and trading. The M&A market is heating up. And I do not think that an errant Fortress Investment Group (FIG - commentary - Trade Now) IPO, RailAmerica, is going to derail a buoyant IPO market any more than the awful FIG secondary derailed the great secondary market of the spring and summer.

Now, let's tell the truth about what's going on behind the scenes in Goldman. The October 190 and 195 call-sellers are monstrous. The Goldman 190 and 185 October put-buyers are mad as hatters, taking them down by the boatload. I would be buying the under-purchased October 180s for a coup de grace in late-afternoon trading.

What do these colossal call-sellers and massive put-buyers know? They know that "Splash" Whitney has her five bullet points about why Goldman Sachs' quarter is bad already set for release -- damn the Goldman release, she has a better one. They know that she will be on TV nonstop telling you why this is either a.) the last good quarter or b.) not a good quarter at all -- it's pick'em.

And that's as good as gold.

Let's just hope, bears, hope that she has the added advantage of being true.

At the time of publication, Cramer was long Goldman Sachs and JPMorgan.

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