January 19, 2011, 6:15 PM — The following is a Public Service Announcement:
One of America's cherished institutions is in trouble and needs your help.
For the third straight quarter, investment bank Goldman Sachs Group Inc. has suffered declining earnings. Due to a sharp downturn in client trading and investment banking, Goldman's net income plunged 52 percent in the fourth quarter to $2.39 billion from $4.95 billion a year ago.
(Also see: Goldman Sachs or Goldman Sulks?)
Simple math proves that, should this trend continue unabated, Goldman will be panhandling at various intersections on Wall Street a year from now, or at the very least busking for donations, which would really suck in February because it's hard to form chords on your guitar in freezing cold weather, except maybe an open D or C. Barre chords, forget it.
That's not the worst of it, however. Goldman was forced to reward its employees -- and we use the word "reward" loosely here -- with only $15.38 billion in salaries and bonuses in 2010. That's 5 percent below what it gave out in 2009. Think about it: How are Goldman employees supposed to pay their mortgages
for luxury vacation homes in the Hamptons and Bali on that kind of money?
So dire is Goldman's situation that it recently had to take its offer of $1.5 billion private shares of social networking company Facebook to investors in China, rescinding a previous offer to its wealthy U.S. clients. No doubt pride played a part in this decision, as the documents hand-delivered to Goldman's clients in New York soliciting their interest in Facebook reportedly were printed on recycled paper, triggering rumors and catty comments all over Manhattan. At least the Chinese are discreet enough to pretend not to notice cheap bond paper when they see it.
Some of you may be thinking, "Why doesn't Goldman just go to the U.S. government for a bailout? It's been done before." Point taken, but Goldman's recent $550 million settlement with the Securities and Exchange Commission over allegations that it defrauded investors has left relations between the investment bank and Uncle Sam slightly strained.
So this is where you come in. It stands to reason that if Goldman Sachs is too big to fail, it also is too big to suffer. But you, dear readers, are not too big to fail. In fact, if your net worth is less than $1 million, you've already failed, so there's no real downside here.
Now is your opportunity to dig down and donate what you can to this noble American institution. Indeed, one could consider it your patriotic duty.
Whatever you can come up with, it's not enough, so try to come up with more. If money is tight, sell off some assets. Start with your home, assuming it's not in foreclosure. Plus we hear renting is all the rage these days. So too are shantytowns and living in your car, provided it hasn't been repossessed.