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Goldman Sachs, which repaid a $10 billion TARP loan to the U.S. government, announced second quarter profits of $3.44 billion, which beat analysts' expectations. The NY Times says, "The results continue a robust turnaround for the firm since it rode out the final tumultuous months of last year with the aid of a federal rescue... [The bank] said in the first six months of 2009 it had set aside $11.4 billion for compensation and benefits. Analysts said this was up 33 percent from a year earlier and was enough to pay each employee $386,429 for the first half of this year." Bloomberg News notes that the firm is "reverting to a business model analysts deemed irretrievably broken after a crisis of confidence in Wall Street raised borrowing costs and led to the collapse of Lehman Brothers Holdings Inc. While rivals have pared risks, Goldman Sachs has increased them."
Goldman Sachs Quarterly Earnings Rise 33%
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GS is a well-run ponzi scheme.
it pays to have your mandarins pulling the strings in government.
http://www.goldmansachs666.com/
"...While rivals have pared risks, Goldman Sachs has increased them."
Goldman has always been one step ahead of the market. I'd say they are good at managing their risks and making good calls on where the market will go from here. To do this well during such a severe downturn is exceptional.
I don't understand how people admire Goldman Sachs. The fact that they "earned" so much money from the downfall of others is not noble, and is certainly not what the stock market was designed to do. GS and others of their ilk are leeches and skim off the investments, work and creativity of others, and in this sense GS are not too far off from racketeers from the mafia.
Exactly how to you supposed GS "earned money from the downfall of others"?
This is EXACTLY what the stock market was intended to do.
GS anticipated the movements of the market and took very calculated risks. This is why they get their uniquely talented team gets paid as much as they do.
Please explain to me how they are like leeches, and how they 'skim'?
Admiration should be the feeling, not jealousy.
You don't think there's anything remotely wrong about bundling subprime mortgages into securities that are rated AAA - and then selling them to your clients as a good investment - while simultaneously buying a credit default swap to protect yourself? Are you going to tell us that's it ok because these actions were done by different groups within the company?
If markets were truly free then Goldman would have had to cope with counterparty risk and some (if not all) of the swaps would have gone unpaid. Instead AIG got bailed out and Goldman got made whole.
On the plus side, these bonuses and the resulting tax revenue will surely help NYC out.
If you haven't read Matt Taibbi's "The Great American Bubble Machine" article from Rolling Stone yet, you should do it now. Warning: You may need some anti-depressants after reading.
+1
I'm on the fence about that guy. I think he's been blacklisted and is bitter so he drummed up some conspiracy.
you're right...it is depressing that he was allowed to write a feature article on a subject he knows so little about.
I really don't see where morals fit into the equation here. They're a business, charged by their shareholders with making a profit. Profit was pretty easy to come by this quarter since, you know, a couple of their major competitors put themselves out of business.
A business kept afloat by taxpayer-borne debt (I can't say 'cash' with a straight face).
A business that has peppered top governmental spots with its ex-employees.
If an institution is too big to fail, it should be broken up.
Sorry, for reposting it Longacre. I missed your original post.
Sharpen your pitchforks and get the gasoline for your torches ready.
It's amazing how so many in the Fed and Treasury either come from, or are connected to, Goldman...and they're the ones who have come out shining from all of this.
Amazing.
Rolling Stone has a must-read article by Matt Taibbi about GS's Master of the Universe.
"The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."
read the whole thing...
http://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine
When you think about it, what's really changed since Lehman went down? The banks that played every MBS and CDS scam are just not lending, that's all; and the Fed and Treasury signaled that they won't let another scam bank fall. At the end of the day, no new regulations or curbs on bad behavior exist. Goldman knows this and they're driving a truck right through all of the caution flags.
Goldman Sachs was the biggest packager and seller of collateralized debt obligations (CDOs), packaging thousands of mortgages together, 75% subprime, yet passing them off as AAA paper. When the market deteriorated, Goldman made profit by selling them short.
And many retirees, mutual funds, and city governments who bought these bonds with assurances of Goldman sales people were badly hurt.
Goldman Sachs also was a large purchaser of credit default swaps (CDSs), many from AIG. Representatives from Goldman placed pressure on Hank Paulson for government bailout funds for AIG. And where did billions of those bailout funds go? To pay off Goldman!
And we the taxpayers are picking up the tab.
Goldman Sachs developed computer algorithms for high frequency trading. As such, they insert themselves in rising or falling stocks, buying and selling with lightening speed and making huge profits.
As a result, the individual investor buys these stocks at higher prices and sells them at lower prices.
Goldman Sachs is profiting from the financial crisis recovery by taking the same huge risks with a bonus-driven culture.
And they have covered this risk by changing their designation from an investment bank to a bank holding company, which enables them to get FDIC protection and almost free Fed money.
So, please tell me how Goldman Sachs’ activities and business model benefit our society as a whole by creating financial products that contribute to the growth of American financial industry? What do they do that is valuable to other people? Or does Goldman merely create financial gimmicks to make money for Goldman, leaving the crumbs for the rest of us, and subjecting individual investors to a stock market with a casino mentality?