Something is rotten in the state of America, and Obama needs to fix it. Mark commented here that, when the subject turns to finance, people’s eyes roll back and their brains go dead. I’m asking you to spend around fifteen minutes reading this and watching two videos. You will come away with a much better understanding. If you at all like me, you will come away angry.
Even as the economy continues to struggle, much of Wall Street is minting money — and looking forward again to hefty bonuses.
Many Americans wonder how this can possibly be. How can some banks be prospering so soon after a financial collapse, even as legions of people worry about losing their jobs and their homes?
It may come as a surprise that one of the most powerful forces driving the resurgence on Wall Street is not the banks but Washington. Many of the steps that policy makers took last year to stabilize the financial system — reducing interest rates to near zero, bolstering big banks with taxpayer money, guaranteeing billions of dollars of financial institutions’ debts — helped set the stage for this new era of Wall Street wealth.
Titans like Goldman Sachs and JPMorgan Chase are making fortunes in hot areas like trading stocks and bonds, rather than in the ho-hum business of lending people money. They also are profiting by taking risks that weaker rivals are unable or unwilling to shoulder — a benefit of less competition after the failure of some investment firms last year… [emphasis added]
Inserted from <NY Times>
How could this be? Didn’t Congress pass TARP for the government to purchase toxic assets and thereby allow banks to lend money? Dylan Rattigan explains how we got from there to here in terms even a child could understand.
Rachel Maddow and Elliot Spitzer also take on the same issue.
Barack Obama needs to become part of the solution here, but sorry as I am to admit it, he has become part of the problem, through his choice in appointments. As long as Goldman Sachs owns the US Department of the Treasury, our economy will continue to socialize risk and privatize gain. As I always put it, only the poor have to put up with free enterprise. Only the rich get the benefits of socialism.
Has this helped you understand?
Are you angry?
21 Responses to “How Goldman Sachs Made $3.4 Billion in 3 months”
Sorry, the comment form is closed at this time.
Lloyd Blankfein the current head of Goldman Sachs stands to reap a $100,000,000 pay package for his magic on the street.
if this administration does not claw back the $70,000,000,000 in tax payer dollars before this guy reaps his rewards then there is no hope for us ever to get away again from Government by Goldman.
got about a dozen articles regards regulatory capture & reform posted for this week (right after the articles on the dollar) and i think this exerpt from yves smith sums up my feelings as well:
"The Financial Times reports that the so-called pay czar Kenneth Feinberg, who is in charge of overseeing compensation at TARP recipients, is going to crack down on some of the bonuses paid at AIG: While I think the pay levels in the financial services industry are to a significant degree unwarranted, using pay as a quick and dirty way to appease the masses and try to forgo the needed heavy lifting of real reform and meaningful oversight is likely to be ineffective."
Like a redneck politician here in Central Ontario once advocated, "Welfare just prolongs the agony." But here, we have Wall Street Welfare. Well, these fatcats are definitely not in agony.
Gold? Man, sacks. Fill 'em.
continuing my thoughts…we've had treasury secretaries from the past three administrations come out of Goldman, and you'd better read this to understand the scope of their influence: Another Goldman executive named to key government post as its profits skyrocket" – the article contains a litany…
Mark, you're absolutely right. While my focus was more on the advisers, claw back is definitely needed.
RJS, I'll be bye to see them later. Dis you know that your blog is not updating in my blog roll? It says the last post was three weeks ago. Otherwise, I would have been back sooner. Thanks for the second article as well.
Randal, you've been bad! No gold for you! 😉
I am hearing chatter about the govt. going after Hank Paulson. if they go after hanky-panky, then g.s. might get thrown under the bus with him.
Tom, I read and I listened and I do understand. I'll leave the commenting to the experts here tho! RZ, I hope you are right!
i screwed up the above hyperlink somehow: ill just paste the url in here:
http://www.salon.com/opinion/greenwald/2009/10/16/goldman/index.html
Sue, I hope he realizes his mistake before it costs him.
Thanks, RJS.
http://www.commondreams.org/view/2009/10/17-3
I like Dylan Rattigan.
Not sure why anyone is surprised by the outcome of the TARP bailout. Did you honestly believe that the average American people would benefit by this?
Barack Obama needs to become part of the solution here, but sorry as I am to admit it, he has become part of the problem, through his choice in appointments.
Obama has always been part of this solution and that's why we're in this mess. Remember, this is a guy who during the economics debate in SC couldn't even explain what capital gains taxes were. He was obviously clueless on economics…and that's why he has been clueless on his choices of who to appoint to head up his policies. He had no policy, he had no clue, and now we are paying the price.
Although…I will say this, that our country has been under the control of these banks and investment companies for many years and they have been allowed to rip us off with ease. Their lobbyists bought off a lot of Dems and Repugs who lined their pockets and then sat back while they destroyed our economy.
I am hearing very little about this. AIG really pisses me off and they are justifying it. I hear no outrage and I am afraid they will get away with it. Obama or someone better speak up!
Excellent post, Tom.
When Obama was first elected, his inexperience was a problem for some people. But everyone said he would surround himself with good advisors until he gained more experience. That seems not to have been the case.
I completely agree with Mary Ellen.
Thanks RZ.
Nunly, I have no problem agreeing that Obama is not an expert on economics. Presidents cannot know everything. They need to have advisers with divergent views so they can make better informed judgments. Unfortunately he has chosen the people who caused the problem. You're right that this corruption from Wall Street transcends party lines.
Jim, my outrage is here and I am speaking up.
Josie, where this issue is concerned, you bare correct. If you remember, before I went offline, I always said that Obama is more of a centrist than a progressive.
Despite my criticism, I still support him. Can you imagine how much worse we'd be with McConJob and Mooseolini?
Presidents cannot know everything.
Yes, but Obama convinced his voters that he not only knew everything,but that he knew better than anyone else…and some of his voters bought it hook line and sinker…hence, the messiah references and bogus Nobel peace prize medal for doing nothing. Con men aren't the guys you want in charge of the economy and Obama has filled his Cabinet with guys just like him.
Nunly, I never thought anything like that. But there were and are 'true believers' as there were for Clinton as well. Nothing you can say will convince me that he is a con man, and it's clear to me that nothing I can say will convince you that he isn't. I suppose we'll have to let it go at that.
the shell game that is TARP, bank bailouts, and derivatives will be over before we know it
only thing – we are not going to like the outcome…
i hope those gated communities the heads of AIG, Goldman, BofA etc live in have strong gates
DC, with trillions in unresolved derivatives remaining, I agree.
im revisiting this thread to deposit another goldman story: Report on Goldman's Bets on the Housing Crash": "Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting."
Why does that not surprise me?