Goldman's Opinion on C, JPM: Apathy

Goldman Sachs evidently doesn't care about how competitors such as Citigroup, J.P. Morgan Chase, and Morgan Stanley are doing. They handed a pink slip to the equity analyst that follows them and suspended coverage of the stocks.

William Tanona was one of six senior analysts laid off in last week's axing of 3,200 Goldman employees. The other analysts were Deane Dray, Charles Chon, Ajay Kejriwal, Lawrence Keusch, and Peter Wahlstrom, according to Bloomberg.

Some of the companies covered by the now unemployed analysts were already reassigned, including Honeywell and United Technologies. Tanona's universe has been suspended pending reassignment. Goldman entirely dropped coverage of 20 stocks, including Agilent and Boston Scientific.

Ever since the Spitzer days, it's been widely known that research is a drain on investment banking resources since it produces no revenue directly for the firms. But the ouster of Tanona is still a curious choice.

While it's been very difficult in recent months for equity analysts to have any clarity on the future values of Wall Street's major firms, the analysts covering the sector have never been in higher soundbite demand.

Where would Meredith Whitney of Oppenheimer been without the credit crisis? Not likely the Fortune cover star she is. Ladenburg Thalmann's Richard Bove would have likely finished out his career as an obscure Florida-based banking analyst instead of the CNBC pundit and market-mover he is.

And, while we wouldn't dare to suggest any impropriety in the equity research business, there is also the matter of Tanona's coverage area that Goldman ought to have considered. If he's lucky enough to pick up a similar gig at another bank, one of the stocks he would most likely cover is none other than Goldman Sachs.

by Megan Barnett