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Is Bank of America the new Goldman Sachs?

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.

Comments (10)

  1. BARCAP is the next top dog

  2. Goldman is still the place to work, once the recession is over, (however long it may be), they will still have the reputation and franchise intact. Who else can say that?

  3. Investment banking has fundamentally changed. GS has the best brand and the best staff (arguably) – it should be able to reinvent itself and return. The problem is that when you see an IB like Lehman bros go to the wall, nothing is surprising.

  4. The new Goldman sachs is HSBC. Tier one capital of plus 8%, solid funding and no need of government money, broad exposure to Asia.

  5. Goldman Sachs is the new Goldman Sachs

  6. TJ tier 1 ratios are high because they are a boring bank – a safe haven in the bad times. They have a global presence which means they haven’t had to bother lending to ‘sub-prime’ in order to keep growing. But they could not be described as dynamic! For those at IBs which survive, there will be plenty of opportunities in the future.

  7. To even insinuate that Bank of America is superior to GS is ludicrous. Ok, so GS might make a loss in the fourth quarter. Big, big deal. Most other banks have been making losses since Q4 2007. And Merrill, who Bank of America is throwing its lot in with, is by far the worst of the lot. Goldman is still top. Goldman will stay top.

  8. Bank of America is the OLD Goldman Sachs. BarCap is the NEW Goldman Sachs…. Or is it the other way around?

    mmmm… this latest forum debate from efinancial is really challenging….

  9. Goldman can collapse because they take more risks than other banks… investors don’t like this business model anymore, and Goldman should delist because it will never be rewarded by the financial market, that clearly evaluate such business model to be too much risky…. What is Goldman sachs today? an Hedge Fund? a PE firm? an IBK? a Broker? Clearly all these divisions are poorly valued by the market at the moment….

  10. GS is and will always be GS, TOP INVESTMENT BANK with exceptional talent…

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