Posted on 11/23/2009 8:46:01 AM PST by TigerLikesRooster
The 70% Discount on Goldman's $500M Gift
IT’S BEEN DUBBED the apology with a half-billion-dollar gift attached. In an attention-grabbing move this week, Goldman Sachs (GS: 173.26*, +3.25, +1.91%) said it would launch a $500 million initiative to help small businesses with Warren Buffett as a key adviser, an announcement that coincided by hours with a public mea culpa from CEO Lloyd Blankfein for mistakes in the financial crisis. But it turns out Goldman’s program includes its own discount — the kind that only an investment banker could love.
According to a review of Goldman’s program by SmartMoney in consultation with corporate tax experts, the ultimate price tag of the initiative could be far less than the heavily publicized $500 million. A big chunk of the money is destined for charitable institutions, creating potentially sizable tax deductions for Goldman, while other portions are being made as loans that Goldman confirms it expects to be repaid with interest.
All in all, tax experts say, the ultimate cost to Goldman could total roughly $136 million to $150 million—70% or more below the half-billion figure that helped generate so much publicity for the firm this week. Interest income from the loans could lower the final bill even more. Asked about the estimates, a Goldman spokesman didn’t comment on the specific figures but defended the program as a boon to small businesses, while giving Goldman “a modest economic return.” Buffett didn’t return requests for comment.
(Excerpt) Read more at smartmoney.com ...
Ping!
Goldman is doing what their shareholders would want them to do. Nothing wrong with that, and in fact, it’s something to applaud. They get the most publicity (marketing) using the $500 million figure, and they minimize the after-tax cost. Brilliant!
$16 Billion for bonuses.
$135 million for PR.
Sweet.
For them, anyway.
Note: over 100 times as much for their greedy little selves.
What!!! Who is doing the appraisals for this gift? There is real liability involved for the writer of the analysis. Where are those bloodhounds at the IRS and each and every state regulator of appraisers. WHAT FOUL BALL!
In Goldman We Trust?
Pay Us Back Goldman Sachs...(from FReeper FromLori blog)
http://bluelori.blogspot.com/2009/11/pay-us-back-goldman-sachs.html
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