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Tuesday, July 21, 2009

Goldman Sachs: The Great Vampire Squid Watch — July 21, 2009

Items of Interest:

David Reilly / Bloomberg:
Goldman Sachs Lack of Love Puts Profit at Risk -- Weathering the aftermath of the financial crisis may prove tougher for Goldman Sachs Group Inc. than surviving the storm.

Long the Wall Street firm everyone loves to hate, Goldman saw the brickbats rain down last week after it posted blowout second-quarter results and set aside a record amount for compensation. Even the arch-conservative Wall Street Journal editorial page joined the attacks.

Usually, Goldman takes a sticks-and-stones approach to such vitriol, even if being labeled a “great vampire squid wrapped around the face of humanity” by Rolling Stone magazine is new. This time, though, names may hurt the bank and its share price...

Allan Sloan / Washington Post:
Foolish and Tacky, Goldman Sachs Spurns Its Saviors -- I've always thought that the guys running Goldman Sachs were really smart -- not only about making money, but also about projecting a classy image to the world outside Wall Street. Clearly, I overestimated them.

If there was ever a firm with the motivation -- and the money -- to be gracious to the U.S. taxpayers who kept it alive when the financial markets were imploding, it's Goldman. It had a chance to look good and do good for taxpayers and itself and Wall Street for a relative pittance -- and has blown it. Horribly...

What you probably don't know is that Goldman, flush with cash and profits, is squabbling with the Treasury about how much it should pay taxpayers to buy back the stock-purchase warrants it gave the government as part of the TARP deal last fall. Talk about tacky.

Had Goldman retained something it was once reputed to have -- a sense of short-term sacrifice in return for long-term profit -- it would have agreed to pay the government generously for the warrants. It could have announced that on Tuesday, along with its profits, and looked like a decent, concerned corporate citizen instead of Greedhead Central...
Linus Wilson / Seeking Alpha:
Do Goldman Sachs and Morgan Stanley Want Half Price on the TARP Warrants?
Mike Morgan / GoldmanSachs666.com:
Paulson's Goldman Sachs Bait and Switch Dance -- Here we have Congressman Stearns calling Paulson the crook he is. Unfortunately, Congressman Stearns is a lone voice. Where are you America? Wake up. Do you realize you are being raped, robbed and beat to a pulp by Goldman Sachs and their bankster accomplices? One more fact. Hank Paulson was more responsible for the current global financial crisis than any other ten men combined on the face of the planet. Why? ...

Paul Farrell / MarketWatch:
Goldman Owes Paulson a $1 Billion Bonus -- Cheers for King Henry -- world's greatest nudger

Welcome back King Henry! The same week Congress brutally grilled former Treasury Secretary Henry Paulson for strong-arming Bank of America into the Merrill Lynch deal last fall, J.P. Morgan Chase, Citi, Morgan Stanley, Bank of America, and Hank's old buddies at the Goldman Conspiracy were all wildly cheering him. His power play with TARP's billions last fall saved Wall Street and the world's banking system from a total collapse worse than the 1930s Great Depression.

Cheering? Yes, record second-quarter profits were cheers for King Henry. Wall Street banks know Hank is the world's greatest nudger...

President Bush deserves the credit for bringing Paulson on board three years earlier. But Paulson has kept such a low profile since leaving office six months ago, he could have been in a witness protection program...

John Tamny / RealClearMarkets:
Once Again, Paulson Misses the Point -- In testimony before Congress last week, former Treasury secretary Henry Paulson said he was "proud to have been among the many public servants" who came together "to prevent a far more damaging meltdown of our financial system." It would be hard to list a lack of certitude among his weaknesses.

A more humble Paulson might have thanked Congress for allowing the very architects of our financial meltdown the opportunity to administer the system's return to health. Paulson then should have apologized for having done such a poor job of fixing something that he should never have been allowed to fix to begin with.
Zero Hedge:
Is Goldman Starting To Offload Prop Positions? -- Abby Joseph Cohen must have threatened with retirement and David Kostin is here to pick up Olympic torch. Goldman Sachs just raised its 2009 year end S&P target to 1060, "13% above the current level" meaning Goldman prop positions are full and the great offloading to marginal buyers has begun.
Mike Morgan / GoldmanSachs666.com:
Is Goldman Sachs Front Running the Entire Market? -- Goldman Sachs just raised the S&P target for 2009 to 1,060. Why? It's not because things are "really" getting better. And it's not because they would be buyers in this market. No, it's because they need to pump this market, so they can dump their shares to you . . . at inflated prices that will be big losers for you...

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