ED (evildevil) wrote in ontd_political,

Goldman Sachs makes Awesome profits and all it cost them was their Reputation!

Goldman Sachs’ reputation tarnished

Goldman Sachs’ reputation among both the general public and financially sophisticated Americans has been damaged by the events of the past year, according to research conducted for the Financial Times.

In a survey of 17,000 Americans, Brand Asset Consulting found that Goldman’s stature – as measured by several gauges of brand strength – had suffered in 2008 and 2009.

“Goldman Sachs still has that Gordon Gekko look to it among the general public,” said Anne Rivers, who oversaw the survey, referring to the villain of the 1987 film Wall Street.

Goldman’s long-time rival, Morgan Stanley, also suffered a decline in stature in the survey. But respondents liked and respected Morgan Stanley more than Goldman, a reversal of respondents’ sentiment in 2006.

Yet among those familiar with the two businesses, Goldman still led Morgan Stanley in a category known as “energised differentiation”, a measure that translates into pricing power, Ms Rivers said .In other categories, including relevance and esteem, Goldman lagged or was tied with Morgan Stanley.

Brand Asset Consulting , owned by WPP, the marketing services group, surveys a group of 17,000 people about major brands at least four times a year. Its surveys have a statistical accuracy of 95 per cent, according to the group.

Goldman declined to comment on the findings.

In recent months, Goldman has faced an unprecedented spate of negative publicity as a variety of lawmakers, corporate governance experts and magazines have accused the bank of causing last year’s financial crisis, vilified its plans to pay bonuses on a par with those handed out in the frothy days of 2006 and 2007, and claimed Goldman was relying on its alumni network in Washington to insulate it from the consequences of the failure of AIG, the insurance group.

The onslaught of criticism began slowly following the collapse of Lehman Brothers and the rescue of AIG last September, built gradually over the intervening months as the US plunged into the worst recession in decades, and reached a crescendo in recent weeks after Goldman paid back its taxpayer rescue funds and posted record profits, thus positioning the firm to ladle out bonuses as though last year’s financial crisis had never occurred.

In Rolling Stone last month, Goldman was described as a “great vampire squid wrapped around the face of humanity”. The headline on the cover of New York magazine last week asked: “Is Goldman Sachs evil? Or just too good?” The subsequent article argued in favour of the former, with a tip of the cap to the latter.

The bank has been approached by a gaggle of crisis public relations firms promoting ways for Goldman to improve its image.

Eric Dezenhall, a crisis communications expert, thinks Goldman should steer clear of such approaches. “A lot of these image campaigns don’t do anything to convince the public that company is a cuddly koala bear”, he says.

However, some marketing professionals say the storm will pass. “All of this giant squid language they can pretty much brush off,” said William Barker of Brand Finance. “My guess is that their customers are probably very happy with them.”

In July, Goldman reported record quarterly profits of $3.44bn on revenues of $13.8bn.
Tags: banking
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