Goldman Sachs (GS) has been in the news a lot lately and is one of Wall Street's biggest players. For the past few months I've followed coverage of GS to learn how Wall Street works--I believe understanding Wall Street is an integral part of understanding our current economy and the state of the nation. 

In short, GS is the most profitable investment bank in the world. For years, former GS employees have held--and currently hold--positions of incredible power in the U.S. government. Whether that relationship affects both GS' balance sheet and how our government makes financial decisions is covered in articles by PBS, Rolling Stone and The Times articles (read them).

Detractors, like Matt Taibbi in Rolling Stone, paint GS as the world's most succesful con men and part of a group of "the nation's six largest banks—all committed to this balls-out, I drink your milkshake! strategy of flagrantly gorging themselves as America goes hungry." 

Supporters, as explained in this piece by The Times of London, portray GS as "the overachieving child of globalisation..."  with "...the big brains and brutal work ethic help[ing] to give Goldman the edge when it comes to snagging the best, and richest, clients." 

No matter which side you fall on, the fact remains that GS makes a ton of money and has a massive amount of influence in the world financial markets. Here are some key highlights:

• GS posted a record profit of $13.4 billion in 2009, according to the PBS Newshour production Unraveling the Profit Puzzle at Goldman Sachs.
• GS had 2009 net revenues of $45.1 billion with operating expenses of $25.3 billion, leaving a pre-tax earning of $19.8 billion. Of pre-tax earnings, $17.3 billion came from trading and principal investments, $1.2 billion from investment banking, and $1.3 billion from asset management and security services -- FORM 10K Annual Report for The Goldman Sachs Group, Inc.
• GS' market cap is $85.66 billion (source).
• 32,500 employees work at GS (source). The list of former employees who now work or have worked in the U.S. Government includes: "the treasury secretary under George [W.] Bush (Hank Paulson); the current president and former chairman of the New York Federal Reserve (William Dudley and Stephen Friedman); the chief of staff to the treasury secretary Timothy Geithner (Mark Patterson)... the past and current heads of the New York Stock Exchange (John Thain and Duncan Niederauer); the chief operating officer of the Securities and Exchange Commission’s enforcement division (Adam Storch)," according to The Times. 

Perhaps this quote from The Times sums up Goldman Sachs best: "For Blankfein [CEO of GS], in the end, it all comes down to one thing: finding the best, fastest, and safest way to make money with money, then make some more money, with money on top."

--Jens

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