September 16, 2009

Goldman Sachs finds success has critics

New York bank Goldman Sachs is finding success in the middle of an economic downturn earns both praise and criticism from peers and rivals.

Marsico Capital Management Chief Executive Officer Thomas Marsico praised the firm. While other banks failed, Goldman executed for its customers, said Marsico, whose firm owns 13 million Goldman shares.

Goldman's earnings have allowed it to set aside $11.4 billion for bonus checks this year, 33 percent more than last year, USA Today reported Wednesday.

But a Rolling Stone article likened the firm to a great vampire squid.

Nobel laureate Joseph Stiglitz at Columbia University said: Goldman's activity is of negative social value. Its recent profits came from trading, which basically amounts to profiting from insider information at the expense of others.

Goldman CEO Lloyd Blankfein said, I believe in the high public purpose of what we do.

To its advantage, the bank raised $10 billion just as the financial crisis was unfolding last fall, in part due to a $5 billion investment from billionaire investor Warren Buffett. In addition, the federal government pressed it to take $10 billion in bailout funds, which it has already returned, with interest, to the government.