Bloomberg News columnist David Reilly points out that Goldman Sachs (GS) is JP Morgan’s biggest asset.
The fact that everyone loathes Goldman makes Blankfein’s company a perfect lightning rod for populist outrage that might otherwise be directed at JP Morgan (JPM). This in turn allows for a very easy life for Jamie Diamond’s company.
According to Reilly, JPMorgan has more than double the assets of Goldman, and the company has a massive $868 billion in deposits — 20 times the amount Goldman has.
In 2008, there were 1,144 JPMorgan employees that received a bonus of $1 million plus, topping the 953 Goldman employees getting that kind of payout. JPMorgan’s top four bonus recipients received a combined of nearly $75 million, a good deal more than the $45.9 million for Goldman’s top four. Yet, not a week goes by without articles criticizing or blasting Goldman how the firm is guaranteed privatized gains and socialized losses.
That isn’t to say, notes Reilly, Goldman doesn’t deserve the opprobrium directed its way. Its own shareholders are very critical about the New York-based firm paying record bonuses to its staff – pay and bonuses are estimated to average $717,000 each for 2009, the biggest payout in the firm’s 140 years. It’s just that JPMorgan seems to be getting a much easier ride. After all, JP Morgan is doing pretty much everything that Goldman does. It rakes in well, compensates its employees well, and it mints money on the back of government bailouts.
It seems that without Goldman, helping shield JPMorgan from questions about its own size, profits and payouts even as it reaps many of the same rewards as Goldman, there wouldn’t be a Wall Street for the public to hate.