Greed, Denial, Lack of Transparency: Goldman Not Immune to Wall St. Crisis
2 December 2008
Goldman Sachs stock was a notable laggard during Tuesday’s recovery effort, hit by a WSJ story forecasting the firm will suffer a wider-than-expected loss of $2 billion, or $5 per share, for the quarter that ended Nov. 28.
A loss of that magnitude (or anything close) would certainly change perceptions of the company once viewed as the gold standard on Wall Street. And if Goldman is suffering such steep losses, is there any hope for the “lesser lights” on Wall Street?
Expect at least another six months of bad news from the financial sector (and the economy generally), says Nariman Behravesh, chief economist of IHS Global Insight and author of Spin-Free Economics. “We’re not out of the woods yet. There’s a lot more retrenchment and restructuring” to go on Wall Street, meaning more layoffs and industry consolidation.
That said, Behravesh believes “the writing off of Wall Street” is premature, even if many corporate executives were guilty of denial, lack of transparency, and blind greed that led to a herd mentality during the boom years, as discussed in the accompanying video.
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Greed, Denial, Lack of Transparency: Goldman Not Immune to Wall St. Crisis
2 December 2008
Goldman Sachs stock was a notable laggard during Tuesday’s recovery effort, hit by a WSJ story forecasting the firm will suffer a wider-than-expected loss of $2 billion, or $5 per share, for the quarter that ended Nov. 28.
A loss of that magnitude (or anything close) would certainly change perceptions of the company once viewed as the gold standard on Wall Street. And if Goldman is suffering such steep losses, is there any hope for the “lesser lights” on Wall Street?
Expect at least another six months of bad news from the financial sector (and the economy generally), says Nariman Behravesh, chief economist of IHS Global Insight and author of Spin-Free Economics. “We’re not out of the woods yet. There’s a lot more retrenchment and restructuring” to go on Wall Street, meaning more layoffs and industry consolidation.
That said, Behravesh believes “the writing off of Wall Street” is premature, even if many corporate executives were guilty of denial, lack of transparency, and blind greed that led to a herd mentality during the boom years, as discussed in the accompanying video.
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