"AT its nadir last November, Goldman Sachs’s share price closed at $52, nearly 80 percent below its high of around $250....
By then, many of its chief competitors — Bear Stearns, Lehman Brothers, Merrill Lynch and UBS — were dead or shadows of their former selves.
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But somehow, less than five months later, on the heels of a surprisingly profitable first quarter of fiscal 2009, Goldman Sachs is once again riding high, with its stock closing Tuesday at $115 a share.
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..... the firm has come to be known, as a headline in this newspaper last October put it, as “Government Sachs.”
How can one ignore, the conspiracy-minded say, the crucial role that Henry Paulson, who followed Mr. Rubin to the top at both Goldman and Treasury, played in the decisions to shutter Bear Stearns, to force Lehman Brothers to file for bankruptcy and to insist that Bank of America buy Merrill Lynch at an inflated price?
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..... A few days after Mr. Paulson refused to save Lehman Brothers last September — at a cost of a mere $45 billion or so — he came to A.I.G.’s rescue, to the tune of $170 billion and rising. Then he decided to install Edward Liddy — a former Goldman Sachs board member — as A.I.G.’s chief executive. Goldman has since received some $13 billion in cash, collateral and other payouts from A.I.G. — that is, from taxpayers.
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In a conference call he held last month, Mr. Viniar made the shocking claim that Goldman “had no material exposure to A.I.G.” because the firm had “collateral and market hedges in order to protect ourselves.” If so, then why did Goldman need the government’s help in the first place?
During yesterday’s conference call, Guy Moszkowski, an analyst from Merrill Lynch, asked Mr. Viniar what role the $13 billion Goldman has collected from A.I.G. had on its first-quarter showing.
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Part of the answer lies in a little sleight of hand. One consequence of Goldman’s becoming a bank holding company last year was that it had to switch its fiscal year to the calendar year. Previously, Goldman’s fiscal year had ended on Nov. 30. Now it ends Dec. 31.
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All told, in the last seven months, Goldman has lost $1.5 billion. But that number didn’t come up on Monday. How convenient.
Which leaves us with the real reason Goldman has cleaned up this year: the huge misfortunes of its major competitors.
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Being free of the TARP yoke will give Goldman yet another competitive advantage: the ability to pay its own top talent and new recruits whatever it wants without government scrutiny....."
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http://www.nytimes.com/2009/04/15/opinion/15cohan.html?_r=1&ref=opinion>