Government Sachs’ golden profits
To the cronies go the spoils. So it was during the Bush administration. So it is during the Age of Hope and Change:
Goldman Sachs Group Inc said quarterly earnings surged 33 percent on blowout trading results, trouncing expectations and putting the bank on pace for windfall bonuses that could draw more unwanted public scrutiny.
The results continued Goldman’s extraordinary rebound from the near meltdown of the U.S. banking industry last fall.
Just nine months after the U.S. Treasury bailed out the nation’s largest banks with $125 billion of taxpayer money, Wall Street’s biggest surviving securities firm topped forecasts as improving markets fueled trading profits.
Goldman also blew the lid off compensation. It set aside $6.65 billion for salary, bonuses and benefits in the quarter, up by nearly half from the quarter ended in May last year.
That puts the average Goldman employee on pace to earn more than $900,000 this year. Chief Executive Lloyd Blankfein, senior officers and star traders will likely receive tens of millions of dollars.
The U.S. government wanted “to make sure that the banks are making money, so they do make money,” said Francis Campeau, a broker at MF Global Canada in Montreal. “The flip side is now one could argue they’re making too much.”Goldman reported net income for common shareholders of $2.7 billion, or $4.93 a share. That compares with $2.05 billion, or $4.58, in the quarter ended May 30, 2008, before the bank switched to a calendar-year schedule.
(link)
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Dang! I wonder if they need a new mail guy…
Or janitor?
Class warfare rear it’s ugly head.
If memory serves, isn’t Goldman run by a bunch of really big dem donors? And even some Clinton era officials? I don’t suppose that has any bearing on how they faired in the bailout. Or does it?
Perhaps it will be a big factor in whether or not the powers that be will attack them as viciously as they attacked AIG. Or perhaps the car execs for daring to fly to Washington in private aircraft.
Wait a minute, Michelle.
You need to state your main beef!
Please explain why you have a problem with GS’s numbers.
Hey, most of us on MM’s site are certified U.S. taxpayers, shouldn’t WE get SOMETHING for funding their bailout?
Secretary Geithner please arrange for my $900K to be deliverd by courier to me immediately, preferably in small, unmarked bills.
What makes you think that you didn’t?
1. GS complied with all the terms. That may have included interest/dividendes.
2. You benefited from the bailout because your credit cards and ATM card kept working.
It pays to have a “former” employee as Secretary of the Treasury.
corkie: My credit cards and ATM continued working because I have excellent credit!
How odd. I was under the impression that my ATM card continues to function because I continue to generate a paycheck and that revenue is deposited into my checking account. Had I know this was, in actuality, a “benefit” allocated to me by Government Sachs, I’d at least act a little more gracious for the pittance.
Goldman paid $426 million in dividends to the US government, or about 4% on the loan. You won’t personally see any of it.
Surely you’re not that naive. Did you think that your checking account functions like a piggy bank? Have you never heard of a bank run?
My ability to keep wiping my butt with Quilted Northern? Also apparently a benefit of the bailout.
ED: Yeah, but ACORN and their ilk will!
It take more than that!
Your financial institution must also have liquidity!
Take your head out of the sand.
Haven’t any of you ever seen It’s a Wonderful Life?
corkie: Yeah, I have.
Have you ever heard the government can only give to someone that which it took from someone else?
Idiot!
Wait. You mean that the federal government received the principal AND dividends? You mean all the TARP money wasn’t poured into a black hole?
Well, stop pretending that you haven’t.
What the heck does that mean?
It means our economy is now divided between “too big too fail” (politically connected financiers) and “too small to matter” (taxpayers).
No it doesn’t.
Keep in mind that while market trading volume continues to languish at abysmally low levels, those low levels are nevertheless inflated by programmed “velocity” trading. I’ll return to that.
Last week, GovSachs successfully argued to a judge that their computer programmer who had allegedly tried to abscond with a proprietary trading program should receive $750,000 bail, more than either Ponzi-schemers Madoff or Stanford, because the software in in question, falling into the wrong hands, would allow an unscrupulous operator to manipulate the market.
That software was a “velocity” trading program. So in the hands of the altruistic GovSachs, we are safe?
Lots of dots here to connect. Is anyone asking the question?
corkie: Talk about pulling your head out of somewhere dark!
The government is supposed to protect our lives, our liberties and our pursuit of happiness. It isn’t meant to protect us from falling down and scraping our little knees.
If I am stupid enough to put ALL my assets into a single bank or financial institution, and am not smart enough to get out when the getting is good, then that is my own D@MN fault and I don’t expect every other taxpayer to come to my rescue, including you.
Are you saying that you don’t support FDIC?
I’m curious to know how my earning a paycheck is contingent on Government Sach’s continued solvency.
It’s almost like I could opt not to use DirectDeposit, cash my checks at WalMart (while spending the necessary 10% or whatever on groceries), and stuff my paycheck cash in a mattress.
Or not. I dunno. Thanks for looking out for me, Big Government!
So if your bank became insolvent, you would refuse your FDIC payment?
“dur dur dur dur, Jeddite, but ur life would B so much harder if you didnt have a bank/credit card/ATM card”
Mmm, that’s true, it would mean a rather significant change in lifestyle to not have a bank/credit card/ATM card, but I’d resourceful enough – dare I say
self-sufficientnot-government-dependent-enough – to manage to live a “cash-only” lifestyle.Certainly wouldnt starve, be unclothed, or without a roof.
corkie: It means the money for the bailouts and stimulus package came from the taxpayers. It didn’t just appear from nowhere.
Either we the taxpayers fork over the $$$ or the gubmint prints more and we, the taxpaye pay for it in higher interests rates.
Recommend you stop watching old movies and burying your cash in the back yard and enroll in an Econ 101 class under Professor Walter Williams.
Yes, you and every American are free to do that.
I assume that you’ve never borrowed money. But if you have, then surely you would accept necessary regulatory action to preserve the economic and convenience benefits of using a bank.
I happen to think people would have been upset if their bank balances had dropped to zero and credit cards frozen.
It would have represented economic problems beyond mere inconvenience. Some people may have had trouble feeding their families that week. Do you deny this?
I have money in my account and don’t use credit cards. And don’t go back to your line of a run on a bank taking my money. You already refuted your own argument
That is what the FDIC is for. I received nothing from the bailout.
Forget the democrat doners, they got their boys running the US Treasury!
Please, please…………
No Arguing!
Can’t we all just get a loan?
This isn’t a coherent response to anything I’ve written.
No, some went to planting shrubs along an interstate, some to wooden arrows for children…
corkie: No, I didn’t say that. The FDIC collects $$$ from the banks to provide their protection program. Neither the government nor the banks pay for it out of the goodness of their hearts, they get the $$$ from us, the customers. I paid for insurance against a bank failure, I expect to be protected.
You can apply the earlier quote here, i.e., “The government can only give to someone that which it took from someone else?” The moneys used to shore up the FDIC comes from the bank’s customers and NOT from the government.
Look at Social Security for another example of what the gubmint is capable of doing to the taxpayers.
It is a coherent response to this:
No, no, no, no! FDIC refunds you for money lost in bank insolvencies. It doesn’t PREVENT insolvencies, therefore, it doesn’t prevent your ATM/credit cards from freezing up.
Good point. I should have stated, “What the heck are you trying to say.”
Goldman Sachs = golden profits
U.S. taxpayer = golden shower
Hey, the banks have done me a huge favor. Two years ago, the lines were out the door, everyone spoke Spanish. Now, there are no lines, everyone speaks English.
Corkie:
So, let me get this straight…
Fannie and Freddie, sponsored and monitored by incompetent federal government almost cause a monetary collapse because federal government laws forced risky mortgages to be taken on by financial institutions. Incompetent federal government steps in seizes un-Constitutional power in controlling financial institutions and pass un-Constitutional bail-outs taking my taxpayer money to fund corporations. Federal government uses bail-out leverage to seize more un-Constitutional power over other industries. Hundreds of billions of dollars, and many many MANY Constitutional violations later… unemployment almost at double digits, Executive branch wielding un-Constitutional powers to control/destroy corporations. Trillions of dollars of debt… Fed out of control printing money and buying our debt…
…and I should feel grateful to the federal government that my ATM card still works?
…are you serious?
I would call you a dumbass, but asses everywhere would be braying in protest at having your name attached to them![grumbles about political correctness] You’re an idiot.The Feds caused the problem. The Feds exasperated the problem. The Feds exploited the problem to seize power.
I am not grateful for their intervention. I am FURIOUS over it…
Slow Joe Biden will be Toastmaster of the Year before Corkie makes sense.
I need my blood pressure medicine…
guffaw!
While there may be a slight delay, the Government is watching the health of banks and would have been ready to act if a bank was going to need money from the FDIC. Please note #8 in the folloeing link. I feel much more comfortable with a fund funded by my bank getting me my money than the Government throwing around unregulated money.
I still believe I received nothing from the bailouts other than a soon to be arriving bill.
http://www.fdic.gov/deposit/deposits/rights/rights.html
The government backstops the program. It wouldn’t be effective if they didn’t. Especially since it’s practically broke. Everyone knows that.
There’s no need to convince me that government shouldn’t take from taxpayers. However, that doesn’t mean that prudent regulatory actions aren’t valuable to maintaining efficient capital markets. I believe that a government backstopped FDIC is one of these.
I also believed that Paulson’s bank bailout was prudent at the time. You are all free to disagree, but you have to admit that not all the money was “wasted” as many on here claimed would happen.
corkie: One more time, and then I quit.
The government cannot produce wealth. It takes wealth from individuals in the form of taxes — and NO, evil corporations don’t pay taxes, their customers do through higher prices.
Or, the government creates artificial wealth by printing more money and that leads to inflation.
You STILL need to quit watching old movies and take Econ 101 from Walter Williams (because he isn’t a liberal professor who will add more confusion to your addled mind!).
What if ALL the banks seized at once? That’s the scenario Paulson was faced with. Financial institutions began defaulting on fed wire obligations due to liquidity concerns. Related institutions began pulling funds from banks. It almost happened overnight. The fact that institutions were watching Paulson’s actions kept the system working.
Corkie can certainly defend himself, but I am curious as to why you think this (or rather, its opposite) is what corkie was arguing.
Quit. This discussion is above your level.
Beck was talking about this on his show this morning and he said he would go into it again on his Fox show tonight. Boy, you won’t believe this one if he says what he said on his radio show!
L
Thanks, chapoutier. I hope you can make sense of it. I’m going to focus on replying to those making intelligible points.
Chaps:
corkie thinks:
1) We the taxpayers benefitted from the GS bailout (post #7). I just wanted my fair share (post #6).
2) Government money appears from out of thin air when it comes from either the taxpayers’ pockets or the printing press, with inflation sure to follow.
There’s more, but that is the gist of it…
Oh Wise One, enlighten us with your wisdom!
“The way I run this thing you’d think I knew something about it.”
Bugs Bunny
If all of Obama’s borrowing and spending sets off inflation, it will pretty much have the same effect as destroying our checking and savings accounts anyway.
And if he raises taxes and interest rates high enough to offset his deficit spending, the economy will tank and we’ll be broke anyway.
Yes, I do. And, yes, you did. The same way you benefit from the government supporting FDIC. Feel free to deny the benefit, but you do receive it.
No, I don’t. And I’m not sure why you would think this.
I’m trying.
So, did they actually pay back that money they took from the taxpayer? Or are these phony profits?
I agree with corkie. GS are making a healthy profit and are beginning to payback money to the government.
Do you want them to go bust and thus waste the billions poured into them? Do you want them to hang onto the money and never pay it back? What more do you want?
I agree with everything you stated.
This is the battle we need to focus on. I don’t think GS is our enemy.
Change…smirk!
It worked great for Lehman Brothers, right?
Right?
corkie: I am trying to be reasonable, but my main sticking point with you has been that you seem to think the government FDIC program is a ‘freebie.’
Like anything else the government provides, be it protecting our life, liberty and our pursuit of happiness, it comes with a price.
The FDIC is financed by fees paid by the bank’s customer or the bank reduces its return to its customers. The federal backstop comes from the taxpayers. Either way, someone other than the bank and the federal government foots the bill.
The point that you seem unable to grasp is:
Our government doesn’t create wealth. It gets its wealth from the citizens in the form of taxes.
The government can create the illusion of wealth by printing more $$$ bills, but all those nice, new, crisp $$$ bills undermine the value of every other $$$ bill, which is ultimately paid for by all US citizens (whether or not they pay taxes) in the form of inflation.
pgtips: Yes, they should pay it back. To the ones who made it all possible in the first place, the taxpayer, not to the federal government so it can spend it elsewhere.
My original post (#6) was a tongue-in-cheek response to where I thought the money should go.
That is correct. However, the wealth in question has been generated by Goldman Sachs. Yes, the government took it from taxpayers. Yes, it was wealth redistribution. However, Goldman Sachs is now paying back the government for the money that was invested into it. What is the issue here?
Let us not become socialists and begrudge Goldman Sachs employees their pay.
Ah, I see the point you’re making now.
The logistics of that would make it practically impossible since they didn’t take it directly from the taxpayer in the first place. Would be nice, though I think it would be impractical.
crokie,
There is no proof that banks in general were about to fail. The “bailout” was based on trumped up hysteria designed to save the butts of a few politically connected individuals and build the power base of certain segments of the government. History will judge these bailouts harshly.
The FDIC (which did not exist during the time frame portrayed in “it’s A Wonderful Life”) protects INDIVIDUALS EQUALLY from bank failure. It does not give billions of dollars to failing buisinesss, nor does it stack the deck in favor of certain politically connected individuals.
The government, through existing legal protocol, could have presided over a controlled bankruptcy of GS, AIG, etc. and allowed existing successful businesses to pick up the pieces on an open bid basis. This would have cost the taxpayers very little and would have dismantled the failing institutions and replaced them with successful institutions.
nail49, I grasp your points. I don’t understand WHY you’re making THESE points.
It would be like me repeating the fact that 3 x 4 = 12 over and over and claiming that you don’t grasp the concept. You would be left wondering why I kept repeating it.
Tell me what concept you’re trying to prove.
i’ll bet goldman will be hiring EMPLOYEES before gubmint motors. yo, uaw, here’s how you really bribe and collect. take notes.
Yes, I understand your point now, too. I was actually thinking the same thing.
That should have been MM’s headline!
pgtips: That is a circular argument. GS was given tax $$$ to bail them out. They have generated wealth based on what the government loaned them and they will be taxed on that. However, they are also paying back the money the government loaned them. Guess what? The taxpayer is the one left holding the bag — the government invested our tax dollars and will now keep the return on that $$$.
No kidding!
When I invest and my investment returns a profit, I get rewarded for my risk. Remember, the current Administration believes our taxes are an investment, but, if the investment is a success, we get NO return on our risk.
Had GS failed, the government loses nothing and we, the taxpayers will be forced to fork over more $$$.
corkie: Hooray! It was what I tried to say (tongue-in-cheek) all the way back in post #6!
Think of all the poor electrons that were used up in all this back-and-forth! Oh, the humanity!
You’re right. It’s kinda like watching a riot about to start. You can see it coming, but you certainly don’t have any proof. A cop that nips a riot in the bud will never be able to prove that his actions prevented anything.
I strongly disagree.
1. From my position (within the finance industry) it was real – not trumped up.
2. Nothing was done to save any specific butts.
3. Regardless of what causes hysteria – hysteria alone can cripple a country’s monetary system.
You’re wrong. It would have cost the taxpayer a great deal.
Have you ever been involved with a bankruptcy proceeding? Do you know how long it takes to sort out who owes who? Do you know what everyone does prior to a bankruptcy?
Do you know what type of avalanche effect it would have had? Absorbing Bear Stearns and Lehman Brothers was difficult enough. After that, the buyers were gone!
Yes, but I’m glad they were expended so that I now understand you. And I’m glad you didn’t quit.
Fighter pilots don’t quit — they either run out of fuel or are shot down!
Thanks for staying in the fight…
Doesn’t it seem ominous that Goldman said it earned $3.44 billion and is paying its employees an average of $900,000…on Bastille Day?
“Where’s my cake dammit.”
What aircraft did/do you fly?
corkie: A-10′s and F-16′s. Last flight was two decades ago. Served 22 years in the AF.
And, government generated hysteria is a really great method for a power grab.
LOL, I needed some comic relief today.
Very little in relation to the bailouts
I’m just glad my Roth IRA mutual fund managers switched from major holdings in Citigroup to Goldman Sachs a few months ago.
It’s not like it is a secret that the government plays favorites. Fortunately for now, savvy individuals can still capitalize on government favoritism. . . albeit at the cost of higher taxes taken from me in the meantime.
That’s very true. In my naivete, I stopped at the Government loan being repaid. Guess I assumed that the Government would translate that to tax refunds or something.
Heh
I addressed this. I don’t think Paulson did this. Keep in mind that I’m only commenting on the September 2008 bailouts.
Please tell me whose butts weren’t saved.
How much did the bank bailouts cost? Or do you admit that you need to wait to see how much of the bailout money is repaid before you can calculate it?
Lucky you – getting to transition from one great airframe to another. Which aircraft did you like better and which community did you like better (and don’t do the whole ‘I like both my kids equally’ thing)?
My apologies if this article has already been linked.
From Rolling Stone….hardly a conservative rag.
http://www.rollingstone.com/politics/story/29127316/the_great_american_b
I would hope that a conservative publication wouldn’t be falsely accusing any corporation such a ridiculous, impossible-to-execute conspiracy.
Did GS orchestrate the housing bubble? Did they create the buyers? Weren’t they LESS aggressive than other investment banks in creating CDO’s, etc?
Did they underwrite all the internet IPOs?
I really hope conservatives stay away from this. Is this Beck’s deal?
Lets start with the senior management at GS.
Do you admit that IF any principal is returned to the government that Obama/Pelosi et. al. will spend it on pork or expanded social programs and none will go back to the actual wealth-producing taxpayer that have been, and will be, paying for this bailout?
corkie: I liked the A-10 misson and the people flying them — it was a very small community and, although underappreciated by the AF, the grunts certainly loved us! The 30MM gun was a real crowd-pleaser — when you fired it you could smell the cordite in the cockpit and actually see those 1-pound rounds going downrange (on a good day).
That said, the A-10 was like driving a Hummer off-road while the F-16 was like driving a Ferrari on the Autobahn. An F-16 with its one engine has more HP than the entire starting grid of the Indy 500. It was fun to light the ‘burner and then ‘slip the surly bonds.’
As for the final vote. My wife knows me best and she says I liked the F-16, but I loved the A-10. I agree with SWMBO!
Everyone else: Sorry for getting O/T.
What? Do you need to reread my question?
Yes, if we don’t fight hard against it. And let’s focus on THIS fight. Let’s not waste our resources pretending that GS is the boogeyman.
No, we got that thanks to Mr. Frank and Mr. Dodd.
The hysteria about the bubble bursting was courtesy of Pelosi with help from RINOs like McCain and prodded along by Obama who saw this as a giant pwoer grab opportuinty should he win the presidency.
I have traded in my American Express Card for the AlgoreCarbonCredit Card- good wherever shysters, hustlers and really dumb people meet. Instead of linking it to my checking account it is linked to Bail-Out Central administered by Government Sachs. Win win.
Not a Beck deal…Rolling Stone. Read it and decide for yourself. Don’t read it if you choose but lay off the conspiracy theories.
Thanks. Great answer.
I’ve heard about the AF fighter mafia – which you later joined!
Oops. I stand corrected. I thought you asked whose butts WERE saved.
To answer whose butts weren’t saved, can I start my list with a couple of million of recently unemployed individuals?
How will the Obama administration take this?
I bet the come out and say, “see, this proves that our plan is working.”
However, will they blame the success on the Bush administration?
After all, it was the AIG bailout that allowed Goldman to collect ridiculous profits led by transfer fees based on AIG transactions.
The AIG bailout happened on Bush’s watch.
I hope not.
I was referring to this earlier comment from someone else.
I did.
Um, tell that to Rolling Stone.
Great link, genso.
Like I said, it’s Bastille Day, and we’ve got Teleprompter Antoinette in the White House.
Seemed decently researched to me. Too many people from GS involved in the government and, oh look, they just made record earnings while the economy sucks. Even Buffett is taking hits now.
Mafia, no!
Brotherhood, yes!
We looked out for each other, but we also looked out for the AF.
Seemed to make preposterous claims to me.
And because you and Rolling Stone don’t understand how they made their profits you accuse them of conspiracy? The moon landing deniers have been evidence.
Never thought I would see the day when people on this board would defend Matt Taibbi.
Just because he had unkind words for Michelle Malkin, it doesn’t mean he doesn’t have anything worthwhile to say. We may be Malkinites, but we’re not sheeple.
That Rolling Stones article was the most interesting, informative article I’ve seen in a while. I recommend it to everyone. Draw your own conclusions.