Goldman's public relations 'problem'

Goldman's public relations department seems to think "that prospective investment-banking clients concerned about their association with the firm will simply hire other players rather than face the fallout of working with Goldman." Let me offer an alternative view- prospective investment-banking clients may simply be aware that this whole bubble is nothing more than a big Ponzi scheme and the TBTF banks are insolvent. Maybe those investors don't think that mark-to-fantasy accounting is a good way to do business. Maybe those investors don't like the fact that Goldman is a bank that is not really a bank. Maybe those investors are afraid Goldman will shove it's blood-funnel into their companies. Maybe Morgan Stanley offered a better bribe.

We suggested recently that the Treasury (Treasury news) really couldn't select Goldman Sachs (NYSE: GS) as top underwriter and advisor for its staggered sale of its massive horde of Citigroup (NYSE: C) stock. It just would've been way too controversial, red meat for the conspiracy theorists.

And that has some Goldman Sachs executives worried, according to a sort of inside-the-firm report from Fox Business News. Until now, the PR nightmare from which the company cannot seem to wake hasn't really hit the bottom line. But some think that's now changing unfortunately.

Clearly, Goldman Sachs saw itself as a prime candidate for the job that went to rival Morgan Stanley (NYSE: MS). Some executives now worry "that prospective investment-banking clients concerned about their association with the firm will simply hire other players rather than face the fallout of working with Goldman." All this makes the need for some sort of coordinated image effort a must. But it remains unclear how aggressive Goldman Sachs will be.

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