Goldman Sachs profit bonanza could stoke anger

Steve Eder
Reuters
Sunday, July 12, 2009

NEW YORK (Reuters) – Under normal circumstances, Goldman Sachs Group Inc (GS.N) might be afforded a moment of gloating as it struts toward what could be a banner earnings announcement just nine months after being roiled by Wall Street’s worse crisis since the Great Depression.

But these aren’t ordinary times for the biggest U.S. investment bank, which lately has faced a torrent of unwanted publicity stemming from employee theft allegations and an unflattering spread in Rolling Stone magazine.

Now Goldman, expected to announced second-quarter earnings on Tuesday, finds itself in a no-win situation.

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If earnings are too good critics may lambaste it for ramping up risk too much and embracing a hedge fund-like model that could make it vulnerable to big market swings.

If they fall short, investors may accuse the firm of failing to live up to its reputation for being more aggressive and intelligent than its rivals.

Full story here.

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