Even with its stock off by an enormous amount, it is business as usual at Goldman Sachs (NYSE: GS). Its CEO sees no reason to change course even with its new status as a commercial bank. Perhaps, all the money from Warren Buffett and the Treasury have made it feel secure even in these dangerous markets. Rumors that it would have to raise more money have pressured the stock in recent days.

Goldman Chief Executive Chief Executive Lloyd Blankfein was almost defiant in a presentation yesterday. According to The Wall Street Journal, he said "We're going to consider everything," but won't be provoked into "doing something rash" that the company will spend years reversing,"

Taken at face value, the comments could call a bottom to the financial crisis among the more healthy firms in the financial sector. The weak sisters in the industry may not be saved, but, with federal money moving into the market and hope that plans by the government may make housing prices more stable, Goldman and strong banks like Wells Fargo (NYSE: WFC) may be in a position as dominant and relatively healthy companies to expand their franchises as competitors simply hope to survive.

Of course, if the recession gets substantially worse and lasts well over a year, optimistic predictions won't be worth a dime.

Douglas A. McIntyre is an editor at 24/7 Wall St.

The Goldman Sachs Group (NYSE: GS) plans to can 10% of its 32,500 person staff. Despite its glorious reputation, Goldman is not that different from other financial institutions (FIs). It earned high returns by borrowing too much and now that over-borrowing is causing a painful implosion. As I pointed out last night at The Wharton Club of Boston, the current debt-led bubble has cost $37 trillion so far -- six times more than the equity-led dot-com bubble.

The cost of debt is clear from a quick examination of Goldman's financial statements under current CEO Lloyd Blankfein. When he took over from current Treasury Secretary Hank Paulson, Goldman's ratio of assets to shareholder equity was 18.7 but by the end of 2007, the ratio peaked at 26.2 as assets more than doubled to $1.1 trillion and its return on equity (ROE) climbed to 32%.

Much of the increase in Goldman's ROE was due to debt. In particular, 65% of the increase in Goldman's ROE from 2003 to 2006 was a result of its industry-leading use of borrowed money to increase its assets. While high leverage amplifies returns when asset values climb, it causes even more offsetting pain when asset values decline. For example, the $305 billion in profits earned by the top nine investment banks over the last three years has been wiped out by $323 billion in write-downs in the last year.

Goldman Sachs Group Inc. (NYSE: GS) is cracking down on how its employees can waste their time while they are at work.

According to Dealbreaker, the top investment bank has blocked Facebook and prohibits workers from posting comments on the snarky Web site. The incident is so noteworthy that the gossip blog has a flashing siren graphic above its post on the topic.

"I'm sure the lot of you are going to argue that the vast majority of financial firms have long blocked access to the social networking site, but Goldman's supposed to be above such pedestrian measures," the blog says, adding that Chief Executive Lloyd Blankfein used to not care about such things as "as long as you're kicking ass (by lying about level three assets)."

Fair enough but times are tough on Wall Street. Investment bankers are scrambling to hold onto their jobs as the credit crunch shows no signs of easing. Nannies who used to care for the children of Wall Streeters are finding themselves unemployed. I am sure the strippers at New York's "gentlemen's clubs" are hurting too.

Even Goldman, the best run of any Wall Street bank, is not immune. Its shares are down more than 25 percent this year. Maybe Blankfein needs to remind Goldman's employees that they should be grateful to have jobs at a time when banks are laying off tens of thousands. They are plenty of eager people who could live without recreational Internet surfing who would love to take their place.

Bruce Wasserstein's New York Magazine published a list of Wall Street titans who have seen their personal net worth decline in the last year. One name was conspicuously absent from that list: Bruce Wasserstein, who would rank second on the list of biggest losers if he not decided to exclude himself from his own publication. This type of omission has a proud history, as I have never seen Steve Forbes's name on his magazine's rich list.

Nevertheless, here are the top three biggest losers when Wasserstein's name is added accompanied by the amount they have lost:

• The Bear Stearns Companies (NYSE: BSC) former CEO James Cayne saw his net worth plummet $467 million
• Lazard Ltd.'s (NYSE: LAZ) CEO Bruce Wasserstein's net worth has fallen fallen $260 million. (This is calculated by multiplying Wasserstein's 11,394,504 shares by Lazard's stock tumble -- from its May 2007 high of $56.90 to January 24, 2008's $34.09); and
• The Goldman Sachs Group's (NYSE: GS) CEO Lloyd Blankfein has suffered a $100 million decline.

It's nice to own the means of production over at New York Magazine -- and that ownership clearly influences what it chooses not to publish.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.

Goldman Sachs Group Inc. (NYSE: GS) today posted solid fourth quarter results which were particularly impressive given the turmoil on Wall Street.

Profit after paying preferred dividends was $3.17 billion, or $7.01 per share, compared with $3.10 billion, or $6.59 per share in the year-ago period. Revenue rose 14% to $10.74 billion. Wall Street analysts were expecting profit of $6.87 per share on revenue of $10.16 billion, according to Thomson Financial.

Investment Banking net revenue rose 47% to $1.97 billion, while Trading and Investments jumped 4% to $6.93 billion and Asset Management and Security Services increased 29% to $1.84 billion.

In the press release, Chief Executive Lloyd Blankfein said the New York-based investment bank continues to "see significant growth opportunities across the global economy."

Ralph Cole of Ferguson Wellman Inc., a Goldman shareholder, summed up the situation well to Bloomberg News:
"They continued to perform as every one of their competitors had troubles..They've been able to establish that they're the best investment bank out there.''

Goldman seems to be profiting at the expense of its rivals. As Bloomberg notes, analysts expect Morgan Stanley (NYSE: MS) and Bear Stearns Cos. (NYSE: BSC) to both report their first ever quarterly loss because of bad bets on mortgage securities.

I've never met Goldman Sachs Group's (NYSE: GS) CEO, Lloyd Blankfein. But his rise within Goldman from being a lowly gold trader to bossing around investment bankers who shunned him has a satisfying story arc. And this year's bonus of about $70 million looks to be more than 30% higher than last year's lowly $54 million.

But -- like last year -- he'll probably continue to suffer by comparison with some of the hedge fund managers within Goldman who report to him. Not to mention the measly pay he received relative to his predecessor -- Hank Paulson.

But I don't really feel sorry for Blankfein. After all, Goldman seems to have emerged relatively unscathed by all the subprime gloom that has slowed things down on Wall Street this year compared to last. I think it has something to do with a decision to short mortgage backed securities this summer.

And it doesn't lower Blankfein in my eyes that he awarded my brother, William D. Cohan's book ,The Last Tycoons, the Financial Times & Goldman Sachs Business Book of the Year Award 2007.

Be sure to check out more Money Winners of 2007.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Goldman Sachs.

The New York Post reports on Corporate Leader magazine's poll of the top CEOs based on a survey of analysts and investors. Here's my assessment of the top five:

• Steve Jobs, Apple Inc. (NASDAQ: AAPL). With its stock up 94.4% in the last year -- though 13% below its 52-week high -- Apple's new products this year have been outstanding. But it's a pretty pricey stock; it trades at a Price/Earnings to Growth (PEG) ratio of 1.56 on a P/E ratio of 42.3 and Earnings Per Share (EPS) growth of 27.2% to $6.26 in fiscal 2009.
• Eric Schmidt, Google Inc. (NASDAQ: GOOG). With its stock up 27.8% in the last year -- though 15% below its 52-week high -- Google continues to take share from traditional advertisers while struggling somewhat to profit from all its innovations. But it's a somewhat pricey stock; it trades at a PEG ratio of 1.39 on a P/E ratio of 49.6 and EPS growth of 35.8% to $18.19 in 2008.

The New York Times provides some useful clues on how Goldman Sachs Group (NYSE: GS) was able to profit while its peers took enormous write-downs on holdings of Mortgage Backed Securities (MBS). Its culture encourages a healthy paranoia, which gives unusual power and pay to Goldman's risk managers -- and a willingness to act in conflict with clients' interests if it helps Goldman make more money.

The critical moment came late last year -- coincidentally around the time of my NovaStar Financial (NYSE: NFI) short call -- when Goldman's CFO called a "mortgage risk" meeting which concluded that Goldman should reduce its MBS holdings and buy expensive insurance as protection against further losses. Despite this strategy shift, Goldman continued to package risky mortgages to sell to investors. Many of these clients took losses while Goldman made money. (I think if it was truly concerned about its clients' well-being, it would have warned them of the dangers it saw.)

Goldman has a relatively flat management hierarchy which allows people closest to the markets to get their views heard. And one of the keys to adapting to risk at Goldman is the unusual power and pay of its risk managers. Its controller's office, the group responsible for valuing Goldman's huge positions, has 1,100 people, including 20 PhDs. If there is a dispute, the controller is always deemed right unless the trading desk can make a convincing case for an alternate valuation.

I've heard about analysts having conflicts of interest, but this one takes the cake. Goldman Sachs (NYSE: GS) CEO Lloyd Blankfein actually called VTB Group CEO Andrei Kostin to apologize for an analyst's sell rating on the company's stock. Why would he do that? Bloomberg sums it up:

The situation highlights the tension U.S. investment banks face wooing clients in developing markets while complying with regulations at home that compel them to publish independent research. Goldman, which lags behind competitors in Russia, is adding 25 bankers in Moscow this year to tap what it considers the country's ``huge potential.''

Goldman worked on the bank's May IPO. While it's tempting to decry this as a sign of a lack of analyst independence, I think it's actually the opposite: This has all been done out in the open, and the analyst's report on the company was allowed to be published. That's a far cry from what might have happened a few years ago.

So while Blankfein's pandering is pathetic, we can take some encouragement from the fact that report is still available.

• Read about the exit of Goldman Sachs' star Mark McGoldrick

A top-tier investment bank like Goldman Sachs (NYSE: GS) might seem like it would logically be a supporter of the traditionally more pro-business GOP. But the company's CEO, Lloyd Blankfein, is casting his lot behind Senator Hillary Clinton. According to a PR put out by her campaign, Blankfein said that "As a New Yorker, I have seen firsthand the outstanding work Hillary Clinton has done as a senator, proving herself to be a strong and experienced leader."

Morgan Stanley (NYSE: MS) CEO John Mack, a formerly vocal supporter of the current President's candidacy, is also supporting Ms. Clinton. So what gives?

While it would be cynical to assume that these men cast their votes solely based on the interests of their employers, that could be one factor. The Democrats have been, by and large, vocal supporters of leveling the tax playing field between large private equity firms and the investment banks with which they compete. Having a firm like Blackstone (NYSE: BX) paying less in taxes puts Mack and Blankfein at a competitive disadvantage: If two firms are bidding for a deal and one has to pay twice as much in taxes, guess who's going to be able to bid the most on the deal? As a Senator from New York, Clinton is the logical choice for these executives.

Of course John Edwards was quick to attack Clinton for being supported by an investment bank. Wait, didn't he work for a hedge fund and receive compensation in the high six-figures? Oh yeah, he did that to learn about poverty. In a related story, Barry Bonds claims he used steroids to learn about how hard it is to compete as a drug-free athlete.

Wow! That was my initial reaction when I read the Bloomberg News story about the pay accruing to Blackstone Group's top executives. And yet, compared to hedge funds, these guys are lightweights. When you look at their photos, though, you can only come to one conclusion -- it pays to be bald!

Blackstone Group LP co-founders Stephen Schwarzman and Peter G. Peterson will get $2.33 billion and keep 28% of the company after its planned initial public offering. That was interesting but what really got my attention is their pay -- Schwarzman made $398.3 million last year and will own Blackstone shares worth $7.7 billion while Peterson took in $212.9 million in 2006 and will own $1.31 billion worth of stock after the deal is done.

This seems like a nice payday but it depends on whose you compare it to. Schwarzman's pay is about 7.4 times that of Goldman Sachs Group Inc.'s (NYSE: GS) CEO Lloyd Blankfein -- who made only $54 million in 2006 and 6,638 times that of the average U.S. family which pulled in $60,000 last year.

Yet Schwarzman's $398 million is less than a quarter of the $1.7 billion that top hedge fund manager, James Simons, pulled in last year. Do you feel sorry for Schwarzman now?

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Goldman Sachs.

It's not news that on June 27, 2007, The Wall Street Journal shall be host to some of the world's most powerful and influential business and financial professionals at their first annual Deals & Deal Makers Conference to be held at The New York Stock Exchange. With speakers including the likes of Lloyd Blankfein, CEO of Goldman Sachs Group, Inc. (NYSE: GS), Steven A. Schwarzman of The Blackstone Group, and Carl Icahn of Icahn Associates, there shall be a tremendous concentration of economic high fliers playing poker, chewing on buffalo wings and tossing back mugs of light beer.

All kidding aside though, this conference represents an extremely noteworthy gathering of power brokers. I'd give one year's wages to get a transcript of their full discussions. The event is by invitation only and you can see by this Primewire news announcement that it is extremely exclusive. They're not letting just any old straw boss in there and I assume that reporters won't be allowed near the place. I also assume that the event shall be a resounding success but shall any of us regular folks even know that?

Will they discuss the price of oil and how that is affecting their operations around the globe? Will they discuss the many ethical disruptions and legal misdeeds among the members of their peer group and what they can do to reduce that? Will they formulate a plan to persuade Hugo Chavez to disappear into the Venezuelan rain forest? Will they decide who's to be the next American president or will they just pity the one we have?

I probably won't hear one peep about what those fine people truly discuss and probably neither shall you. It is for certain though that we all shall be affected by those discussions. They're not calling it a deal makers conference for nothing you know. The question for me is what deals will they be making and just how much will we all be affected by them?

By the way, you can request an invitation to the conference via this link. Good luck!

Wondering how to make the big bucks at The Goldman Sachs Group, Inc. (NYSE: GS)? Besides hard work, talent, meeting your goals, and organizational savvy, it helps to be bald.

According to Bloomberg, GS paid its CEO Lloyd Blankfein $54 million for his work in 2006.

It also paid $53 million to both first year co-presidents Gary Cohn (on the right) and John Winkelreid (left).

One of my Wharton classmates is a Goldman Managing Director who also happens to have a shiny pate.

I'm not the first to notice this trend. Fellow BloggingStocks blogger Rick Rickertsen wrote about the same trend back in October.

Could Goldman face a class action lawsuit from its non-follically DisAbled staffers who aren't cracking through Goldman's gold-plated executive ceiling? I doubt Lloyd Blankfein will be pulling out his hair worrying about it.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm, He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Goldman Sachs.

This year Wall Street bonuses are looking to hit a new record. Last year, they hit a record of $21.5 billion and I've seen estimates that they'll be up between 10% and 25% in 2006.

One expert, Options Group, estimates that the big winners will be investment bankers and equity underwriters and traders. Driven by a record year in mergers, investment bankers will receive bonuses 20% to 25% higher than in 2005, as will those in equity derivatives sales. The "losers" will be fixed-income proprietary traders, who will earn the same or less than they did in 2005.

This year, the best place for bonus babies is the Goldman Sachs Group (NYSE:GS), which is distributing $16.5 billion worth of bonuses among its 36,000 employees -- up 40% from 2005. While this averages out to $623,418 per full-time employee, a few traders will take home $100 million.

How can any company justify paying so much money to one person? That $100 million bonus is 2,159 times the $46,326 that the median U.S. family earns every year! Do traders really work 2,159 times harder than the average family? Are their lives really 2,159 more stressful? How can any CEO justify paying out so much money?

Today The Goldman Sachs Group (NYSE: GS) announced that it was paying its CEO Lloyd Blankfein $54 million. I think he should get $68 million. Goldman's net income rose 70% in the last year but Blankfein's compensation is only 46% higher than that of his predecessor who oversaw 23% net income growth. When his predecessor increased Goldman's 2005 net income 23% over the 2004 level, he got a 29% boost (6% above net income growth) in compensation over 2004. So I figure Blankfein should have gotten 76% more -- $68 million. In other words, Goldman stiffed Blankfein by 21%.

How so? In 2005 Goldman's CEO (and current Treasury Secretary) Hank Paulson got $38.8 million which was up 29% from the $30 million he received in 2004. As I posted earlier, Paulson's 2005 compensation was based on many factors -- such as the improvement in Goldman's revenues (+46%), net income (+23%), earnings per share (+26%), return on equity (+ 2 percentage points), and the revenues of its business units -- Investment Banking (+9%), Trading and Principal Investments (+23%) and Asset Management and Securities Services (+23%).

Under Blankfein, Goldman's operations improved far more than under Paulson. Revenues grew 60% to $69.4 billion; net income rose 70%; earnings per share climbed 78%. Revenues of most of its business units increased much more under Blankfein as well -- Investment Banking (+42%), Trading (+105%), Principal Investments (+64%). Only Asset Management and Securities Services (+16%) was up less under Blankfein than under Paulson.

If that's not enough, under Blankfein, Goldman stock rose 58% while under Paulson, it rose a measly 20% in 2005. If Goldman's board underpays its CEO, how can shareholders be sure he'll stick around to boost the value of their investment in the future?

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm, and a Professor of Management at Babson College. He has no financial interest in Goldman Sachs.