Investment bankers describe every deal ever done as a win/win for both sides. Few turn out quite like that. But Warren Buffett's deal to buy into Goldman Sachs may actually be one of these rare golden transactions.

For Buffett, he gets a sizeable stake in Wall Street's premier money-making machine and at a bargain price. The preferred shares pay a juicy 10 per cent coupon and Goldman has to pay an additional 10 per cent premium if it wants to buy him out. The warrants to buy ordinary shares at $115 a share are already showing a decent profit for Buffett. In pre-market trading this morning, Goldman shares surged to $135.

For Goldman, it gets a seal of approval from the most sagacious long-term investor on the planet. It also gets $7.5 billion of additional capital. If Congress derails the $700 billion bailout plan, we are heading for a fresh period of market turmoil where no bank can be regarded as overcapitalised. If the bailout plan works, Goldman will have the firepower to buy distressed assets back from the Government at what it hopes will turn out to be bargain prices. Either way, it is suitably prepared.

There are downsides, however. Goldman can expect to be accused of selling itself a little too cheaply. Buffett, no fan of Wall Street in normal times, may be accused of breaking his cardinal rule of investing only in simple to understand businesses where there is long-term visibility

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