Goldman Sachs lends money to its cash-strapped executives
In an indication that some have seen their personal wealth shrivel in recent months, Goldman is offering to lend money to around 1,000 staffers. The New York Times reported today that the bank is prepared to provide loans worth anything from a few thousand to hundreds of thousands of dollars.
The money is being offered because some Goldman employees face cash calls on their investments in some of the bank's own funds. These financial vehicles have invested in real estate and private equity and their value has plunged as the US economy has contracted. Employees who have invested in the funds are contractually obliged to put up more money if required – and the relatively meagre bonuses paid out in 2008 means some are struggling to meet their obligations.
Sources who spoke to the New York Times indicated that the loans were specifically aimed at assisting employees to meet their fund obligations and could not be used for other purposes. Goldman Sachs has not commented except to confirm the existence of the loan programme.
During the boom years, Goldman was famous for its remuneration policies, which were lavish even by the gilded standards of Wall Street. But much of this money appears to have gone back into its investment funds.
One former Goldman partner told the New York Times that a significant number of the bank's partners are now worth less than $5m (£3.6m) each, despite having enjoyed years of multimillion dollar bonuses.
Goldman was forced to give up its treasured investment-bank status last year, so that it could receive emergency funds from the Federal Reserve.
It is also one of many Wall Street firms to receive billions of dollars through the US banking bailout. These companies have been heavily criticised for continuing to pay bonuses for work done in 2008, a year punctuated by massive losses and writedowns across the banking sector.
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- bansheewail
- added this
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So, let me get this straight, the company went belly-up because the employees didn't do a very good job, then, the tax payers via the federal government bailed the company out, the employees of the company owe the company money because they made shitty deals with the company and now the company is going to loan the employees our taxpayer money to payback to the company. Is that about right? Anyone confused?? When I was ten years old, I had a lemonaide stand. Based on that experience alone, I think I could run Goldman Sachs better than these clowns!! I don't think this deal should be called a "bailout". We got "jacked" by Henry Paulson, George Bush and John McCain. Every real Conservative should be pissed off at these neo-liberal economic tactics.
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- bansheewail
- 8 months ago
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""I think I could run Goldman Sachs better than these clowns!!"" uh doubt that.
""I don't think this deal should be called a "bailout". We got "jacked" by Henry Paulson, George Bush and John McCain. Every real Conservative should be pissed off at these neo-liberal economic tactics.""
Ok so you don't even mention the sightest displeasure at what is going on NOW. I know, Obama has a 'get out of jail free card' for about 6 months but
people DEMS and Republicans are mad as hell at the stupid economic decisions. Citizens are up in arms and mad as hell.Wake up, Bush is Gone. Change (chicago style) has moved in and that printing press runs night and day.
Some people are ready to revolt like they did in France yesterday. People are suffering and all you do is the same Democrat dance about Bush.Sorry, Not one person, NONE read that 3000 or whatever page bill. They all admit it. Said they only had 2 days and it was too long and complicated that it would take a speed reader to read it in 24 hours.
So, This crap happening now is being "Jacked" by Geithner (tax thief who can't get anyone to fill his 16 open positions), Dodd, catch the news tomorrow and find out about his sweetheart deal with Countrywide, and His 10 acres in Ireland owned by him and a felon.I could go on and on about the rest of the cabinet but...off to bed perhaps to dream...that we will live through this Chinese Fire Drill government.
One more thing,People just automatically say, oh those people ran the company down. You don't know that! All companies are failing in degrees so with your rationale, they are all running the businesses in the ground. Businesses get bad because of inflation/recession/deflation esp. You better believe conservatives and liberals are pissed off at these neo democratic tactics.
