2. J&J Meets G&G

We got a chuckle over Johnson & Johnson's ( JNJ) troubles this week courtesy of our friends over at Goldman & Goldman ( GS).

No, that's not a typo. We doubled-up on Goldman for a reason. Allow us to explain.

The investment bank's research analyst Jami Rubin downgraded the drug giant to sell from neutral Tuesday based on her belief that the company's focus on getting bigger is causing it to become less competitive. Shares of Johnny John, as Wall Street traders call it, sank 1.5% to $68 on the news.

"In our view, JNJ's focus on M&A versus cash returns to shareholders or a break-up strategy (like PFE, ABT, COV, BAX) puts it at a disadvantage as other companies get more aggressive. We advocated a creative strategy in our May 30 note, The case for breaking up J&J, which we believe would unlock significant value that is currently trapped in JNJ's conglomerate structure. However, our sense is that management has low interest in this approach to capital allocation," wrote Rubin.

Alright, she's entitled to her opinion, and it certainly is a candid one considering we rarely see bulge bracket investment banks telling clients to dump Dow components, and especially established ones like J&J. But that's not what tickled our funny bone though.

No, what amused us about this particular sell call is where J&J's management got the bright idea to bulk up in the first place. Guess who planted the seed in J&J's mind to get bigger? Come on, give it a shot.

Yep, Goldman Sachs itself. As pointed out by TheStreet's very own Antoine Gara in his Street Whispers column Tuesday, Rubin's bearish outlook on J&J -- predicated on a misguided M&A strategy -- comes only a few months after Goldman's investment bankers helped seal the healthcare giant's largest-ever acquisition.

"The real surprise is how arguments floated by Goldman's research analysts appear to undercut the bank's front and center role as an advisor to J&J on its $19.7 billion acquisition of medical device maker Synthes, the largest deal in the company's 126-year history. The downgrade is especially noteworthy given that Goldman's advisory work for J&J was also likely considered to be a capstone 2012 success in a relatively weak year for dealmakers," wrote Gara.

Look, we appreciate that Goldman's research arm is finally showing its independence after all the troubles it heaped on itself during the tech bubble (the last one that is). It really is refreshing to see a conflict of interest within an investment bank, as opposed to one between an investment bank and its client.

That said, you gotta admit the whole thing is laughable. And it will be even more so when J&J eventually takes Rubin's advice and breaks itself up. You just know they will. And guess who will pocket the advisory fees when they decide to get smaller?

Come on, give it a shot.

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