"Is It Too Late for Goldman Sachs to Play Offense?"
• What financial services firms should do differently as a matter of self-governance
• What new, appropriate U.S. and international financial industry regulations should be adopted to ensure the safety and soundness of the financial system and to avoid such catastrophic results in the future
— It announced robust revenues after the second quarter in 2009 ($13.76 billion) but also reserved about 50 percent of that amount for compensation (in line with its historic practice). This reserve set off a firestorm of criticism, even though it was not a pay-out commitment. (Indeed, at the end of the year, Goldman used 36 percent of revenue for compensation, rather than 50 percent — not that anyone was starving.)
— It defensively set up a $500 million facility las fall, to provide credit to small businesses not being served by smaller commercial banks, which received little notice or praise — a result that would have been far different had this action been taken at the time of the 2Q earnings.
— Blankfein made unfortunate, insensitive, off-hand remarks ("God's work") that received outsized attention.
— Goldman's very success in the midst of a great recession, with so much economic suffering all across the nation, made them a target, even though from a purely business perspective they had clearly outperformed their rivals, both in 2009 and during the stresses of 2008 (compare their real estate losses in single digit billions to the losses of other financial companies in the tens of billions). The growing populism on Main Street — reflected through the media and public officials — saw commercial success in 2009 as predatory, not admirable.
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