Once again, it's good to be Goldman Sachs
The worse it gets for Goldman Sachs, the better it gets for Goldman Sachs.
The banking giant’s evil vampire-squid image was further reinforced Monday with the revelation that the firm stands to get a $1-billion payment from tottering lender CIT Group if the latter should file for bankruptcy protection.
More bad publicity for Goldman, already reviled as the most power-hungry and ruthless denizen of Wall Street? Of course.
The year-to-date gain in the stock: 121%, about seven times the gain of the average financial stock in the Standard & Poor’s 500.
Everyone, it seems, hates Goldman -- except for its shareholders and those who wish they were.
The potential $1-billion payment from CIT was negotiated when Goldman agreed to extend a $3-billion financing deal to CIT in June 2008, Bloomberg News reported, following an earlier report in the Financial Times. Goldman told the Wall Street Journal on Monday that it was talking to CIT about amending the agreement.
U.S. taxpayers, meanwhile, stand to lose if CIT fails, because the Treasury bought $2.3 billion in preferred stock from the company late last year under the Troubled Asset Relief Program.
As for Goldman’s horrible public image, Reuters' Felix Salmon wrote:
"Given the choice between making lots of money and having a good public reputation, Goldman will always choose the former. But the bank always used to have a reasonably large number of defenders in the press; that number seems to be shrinking daily."
Does Goldman care? More from Salmon:
"Goldman has seconded its president’s chief of staff, Samuel Robinson, to the PR department in recent weeks, in what is surely an attempt to reverse this decline. Judging by today’s headlines, he still has his work cut out for him."
For now, Goldman employees have only their rapidly rising net worth to compensate for being the target of the nation’s ire.
-- Tom Petruno