Could Goldman’s star be on the wane? The Wall Street Journal points out that GS stock is down 45% since early September, against a 22% drop for the rest of the financial sector.
This week, Merrill Lynch analyst Guy Moszkowski predicted Goldman will post its first-ever loss as a public company in the fourth quarter, due to the “stressed equity environment”. Ladenburg Thalmann analyst Dick Bove recommended selling its stock on the grounds that mark to market accounting rules are inimical to Goldman’s historical policy of buying distressed assets and that core businesses like private equity, prime brokerage and credit derivatives are suffering.
Additionally, the Financial Times today reports that Goldman is cutting back on hedge fund clients “in an indication of tougher market conditions and of the changes sweeping through what was once the premier investment bank”.
So if Goldman isn’t the most prestigious place to work any more, where else do you go (assuming, of course, that the choice existed)? The WSJ flirts with the idea that Bank of America may be the new top dog – its stock price has fallen a mere 29% in the past month and once the Merrill deal goes through, it will be a leader in investment banking with a balance sheet to match.