Obama's Two-Sided Treatment of Goldman Sachs (GS)
Although Goldman Sachs (NYSE: GS) has been the whipping boy in the fight by President Barack Obama and his administration in recent months as it has pushed through with financial reform, when the government needs to get down to business -- it still calls on the firm.
In a report from New York Post reporter Mark DeCambre, it is pointed out that the government has time and time again shunned the Wall Street mega bank, but has also turned to it when something needs to be done.
The government publicly attacked Goldman before a Senate subcommittee in April when it called the bank’s financial products “junk" and “crap.” Yet, when the government looked needed to have a firm handle the public offering of American International Group’s (NYSE: AIG) AIA unit, it was Goldman’s job. This, even after Goldman was accused of being the biggest benefactor of the $182 billion bailout of AIG.
"They all articulate anger at the company, but they all do business there," said Dick Bove, an analyst at Rochdale Securities. "The value of Goldman isn't its lovability; the value of Goldman is that it can get things done that other people can't."
Goldman CEO Lloyd Blankfein was one of only two top executives not to be invited to the signing of the historic FinReg bill, but Obama did call the scorned CEO hours after the event to apologize for not sending an invitation.
So despite the government’s perceived anger -- atleast in the public eye -- of how Goldman conducts business, the current administration has no problem tapping the firm when something must be done right.
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