Per Bloomberg:
Goldman Chief Executive Officer Lloyd Blankfein is turning to Buffett, the billionaire investor and second-wealthiest American, to boost market confidence even though Goldman hasn't reported a quarterly loss since it went public in 1999. The bankruptcy of Lehman Brothers Holdings Inc. and emergency sale of Merrill Lynch & Co. to Bank of America Corp. on Sept. 15 have fueled fears about firms that rely on bond markets for funding.
![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyFsXqNGEg939EMnDFZGThIST0MLu5NBcTWTx04keSEqtRcCzIZlVEpZIb-_Y0w5wZidiPnTEI2aCZ65LgZSid9-sGYKyMqGVpDMfNHTpIMJpW71ki43xr5iBNoC43Jx-5KuQVe5HI6FU/s400/buffettbounce.png)
Expect the "Buffett Bounce" to fall flat. As reader Scott Frew astutely points out in a post by Yves over at Naked Capitalism regarding the $5 billion preferred portion of the capital raise:
$5 billion of 10% preferred--Goldie's been of late on a $7-8 billion annual net income run rate, so this dividend, which is paid in after-tax dollars, is a significant hit. The warrants are $10 in the money at the moment of the deal, $25 a share in the money not much later as the market reacted. This is not cheap capital for Goldman, to put it mildly.
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