Whether customers are defecting from Goldman Sachs (NYSE: GS) is hard to quantify. As of now, it's fair to say the firm has lost some clients. But the clients that the firm cares most about are big Fortune 500 companies, and the New York Times reports that many of them are supporting the company, at least publicly. This isn't to say the crisis hasn't hurt the bank. Goldman Sachs had no chance to win the GM mandate, for example.

For customers of Goldman Sachs, this is something of a gift. The sheer power of the firm--and arrogance--and its capital markets clout are such that you have to be wary of them. You know they are cooking up all sorts of trading ploys to either hedge or make money as well as planning their next big principal investment. Now the bank is in an oddly humble position. It's been reaching out to clients, trying to reassure them, perhaps dangling favors and access. If you're a client, this is a good spot to be in. Executives should greet Goldman Sachs' overtures with sympathy and support, but deep down they should be thankful the firm is eating some humble pie. It keeps a certain balance in the relationship.

The smart companies will understand what the modern Goldman Sachs is all about. Recall the words of then WaMu CEO Kerry Killinger: "I don't trust Goldy on this. They are smart, but this is swimming with the sharks. They were shorting mortgages big time while they were giving CfC [Countrywide Financial Corp.] advice. 

For more:
- here's the article

Related Articles:
Goldman Sachs hired by British Petroleum
New book offers another view of Goldman Sachs's destructive power
Poll finds Goldman Sachs image woes continue
Goldman Sachs to lose more customers soon?