Tuesday, September 23, 2008

Goldman Raising Capital

Goldman announced after the close today that they were going to be raising 7.5bio dollars from Warren Buffet's Berkshire Hathaway Inc.

Berkshire is buying $5 billion of perpetual preferred shares, New York-based Goldman said today in a statement. Goldman, which this week transformed itself from the biggest U.S. securities firm to the fourth-largest bank by assets, also plans to raise at least $2.5 billion by selling common stock in a public offering.

This was viewed positive by the market as Goldman was up quite a bit just before the close (it carried over afterwards also).

I heard on CNBC the other day an announcer saying, When will Buffett help out with some of his cash, well it seems he has finally found an investment that he likes. It seems to me that both Morgan Stanley and Goldman Sach have found partners and raised enough cash to fend off the market, at least for now.

Even if Goldman was ok before this move, they are clearly better off now. With a well respected name like Warren Buffet in your corner ( a very good friend of Bill Gates anther pretty wealthy guy) the market should look at this "merger" in a very good light.

``The investment will further bolster our strong capitalization and liquidity position,'' Blankfein, 54, said in today's statement. Berkshire's investment ``is a strong validation of our client franchise and future prospects.

I tend to agree with Mr Blankfein.

Good Luck and Good Currency Trading.



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