Saturday, December 5, 2009

Why Goldman Sachs Is JPMorgan’s Biggest Asset

By David Reilly

JPMorgan Chase & Co. lists lots of assets, ranging from loans to securities to cash, on its $2 trillion balance sheet. Not to be found is one that might be its most valuable -- Goldman Sachs Group Inc.

For JPMorgan, No. 1 in the too-big-to-fail bank club, Goldman has become the perfect lightning rod for populist outrage that might otherwise be directed at it. That has helped shield JPMorgan from questions about its own size, profits and payouts even as it reaps many of the same rewards as Goldman.

Not a week goes by, for example, without what seems like yet another big magazine article or blog blast directed at Goldman. The latest is an 8,000-plus-word piece in the January issue of Vanity Fair magazine.

JPMorgan, meanwhile, gets articles like a Fortune magazine cover story gushing over how it weathered the financial crisis.

Goldman yields JPMorgan dividends in other ways. Silver- tongued JPMorgan Chief Executive Officer Jamie Dimon has found the perfect foil in Goldman’s Lloyd Blankfein, who seems to dig himself deeper with every interview.

Recent chatter about Dimon has focused on his possibly succeeding Treasury Secretary Timothy Geithner, should the need arise. Blankfein, on the other hand, was being widely mocked for joking to London’s Sunday Times that he’s “doing God’s work.”

This is about more than image, though. There may be real implications.

Read the rest of the column here.

David Reilly is a Bloomberg News columnist.

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