Tuesday, July 14, 2009
Many giants of Wall Street are still struggling to rebound from the collapse last year. Morgan Stanley is expected to report a loss for its second quarter of 2009, while Citigroup and Bank of America are barely getting by with the help of the federal government. But the same cannot be said for Goldman Sachs, which seems to have regained its moxie quicker than many had anticipated.
Not only has the firm paid back the billions it received last year in bailout funds from Washington, but it also is likely to report a $2 billion profit for its second quarter activity. The turnaround is remarkable considering Goldman, at the end of 2008, endured its first-ever quarterly loss ($2.12 billion) since the firm went public 10 years ago.
How did Goldman do it? The same way it always has—by taking risks. Analysts say the firm was aggressive in the first part of the year, trading bonds, and buying and selling currencies, as well as commodities like oil. The cavalier strategies also helped make believers of other investors on Wall Street, who have returned to buying up Goldman shares. The firm’s share price has gone up 68% so far in 2009.
-Noel Brinkerhoff
For Goldman, a Swift Return to Lofty Profits (by Graham Bowley and Jenny Anderson, New York Times)
Controversy to Surround Goldman Success (by Simon Atkinson, BBC News)
Goldman Sachs Plans Record Bonuses (by Noel Brinkerhoff, AllGov)
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