Goldman Sachs // Current

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11 hours ago

Matt Taibbi Interview Part 1 of 3 @ BreakRoomLive.com

http://breakroomlive.com Sam sits down with journalist Matt Taibbi to discuss his most recent article in Rolling Stone magazine... more

BreakRoomLive
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Goldman Sachs Using Share Sale to Return Bailout Funds

Six months after accepting a financial lifeline from Washington, a newly profitable Goldman Sachs is pushing to return the... more

bansheewail
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Should Geithner Go?

Laura Flanders talks to Matt Taibbi of Rolling Stone and Robert Johnson former chief economist for the Senate Banking Committee.... more

GRITtv
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Obama can't walk on water, he should save the taxpayers not AIG or Goldman Sachs

Barack Obama cannot walk on water after all, but that is unsurprising since he has four massive weights shackled to his ankles: AIG, Citigroup, Fannie Mae and Freddie Mac. Of these, the most urgent challenge is posed by AIG. The current row over the payment of $165m in bonuses - an outrage, admittedly, especially since 11 employees who received more than $1m in "retention" bonuses have already left the company - is a distraction, like Sir Fred Goodwin's pension in the UK, from the main concern.

Barack Obama and Tim Geithner have one sensible option: they must send the liquidators in to AIG to pick the bones clean. The sooner they take this drastic action, the more effective it will be. The perception is growing that the real motive behind the AIG bailout is to save the posterior of Goldman Sachs: AIG appears to have become a staging post through which billions of taxpayers' dollars travel into the coffers of Goldman Sachs and other banks.

The question is also being asked why Goldman Sachs' chief executive Lloyd Blankfein sat in on meetings discussing the AIG bailout. The core of the AIG problem and, by extension, of America's banking crisis, is the question of Credit Default Swaps (CDS), the contracts invented by a team working for J P Morgan Chase in 1997, regarded as state-of-the-art financial practice and imported into the banking system like a plague bacillus.

The exposure to CDS liabilities amounts to $15 trillion. Forgive an inquisitive foreigner questioning Uncle Sam's credit worthiness, but does America actually have that kind of money to spare? No, is the evident answer. So, what is to be done? The Obama/Geithner formula seems to be to throw exponential amounts of taxpayers' money at AIG to delay the inevitable. But there is one procedure that would solve the CDS problem at a stroke: the bankruptcy process would allow all these toxic CDS contracts to be torn up, to the relief both of the financial system and the taxpayer.

Why will Obama and Geithner not take this course? It might sound perverse to describe Lehman Brothers as a success story, but in the present dire circumstances it could be called that: liquidation of Lehman has allowed its viable divisions to put down fresh roots. Why will Geithner not do the same with AIG? Financial commentators were quick to notice the startling similarity between Geithner's bank bailout plan and proposals that Goldman Sachs had been hawking around for a month beforehand.

Timothy Geithner is toast: even the Treasury cat knows he cannot survive. The present policy is madness. Anybody who listened to Barack Obama's campaign speeches would have presumed that, in a conflict between the interests of the suits on Wall Street and the families on Main Street, Obama would not hesitate. Nor has he: the suits have it. Meanwhile, AIG is the mortal wound sapping life from the Obama administration. Change we need? Hope? Some hope.Barack Obama cannot walk on water after all, but that is unsurprising since he has four massive weights shackled to his ankles:... more

ClipsFC
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11 responses

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4 months ago

Goldman Sachs lends money to its cash-strapped executives

Goldman Sachs is about to start lending money to its own executives because the financial crisis has left them short of cash.

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.Goldman Sachs is about to start lending money to its own executives because the financial crisis has left them short of cash.... more

bansheewail
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2 responses

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4 months ago

AIG Lists Banks it Paid W/ YOUR MONEY!!

Financial companies that received multibillion-dollar payments owed by A.I.G. include Goldman Sachs ($12.9 billion), Merrill Lynch... more

smallgod
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7 responses

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4 months ago

Burger King Keeping Workers Below The Poverty Line?

What would you do with an extra $18,000 in your pocket? That's the amount of extra cash each and every Burger King... more

Future_America
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5 months ago

Who's keeping Burger King workers below the poverty line?

Check out this video, this is seriously wrong. Goldman Sachs (one of the BK's largest owners) squandered 6.5 billion of our... more

slowdive
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0 responses

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7 months ago

Goldman Sachs Evades Taxes, Takes Tarp Funds

When I heard “changes in our geographic earnings mix,” I immediately thought of a document that a friend had sent me... more

Paisano1
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0 responses

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7 months ago

Wall Street Bonuses Fueled Meltdown

Bonuses will be paltry on Wall Street this year, at least relative to the excesses of past years, but this may be for the best,... more

AcaiHelios
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0 responses

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7 months ago

Economy Takes Bite Out of Apple

The formerly invincible Apple may have finally met its match—the recession. Last month sales, of Macs declined 1 percent... more

AcaiHelios
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0 responses

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8 months ago

Goldman Sachs ready to hand out £7BILLION salary and bonus package... after its £6bn bail-out

Goldman Sachs is on course to pay its top City bankers multimillion-pound bonuses - despite asking the U.S. government for an... more

toshiba
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19 responses

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9 months ago

Foreclosed Mother Keeps Home... For Now

ANP: The morning her house was to be auctioned off Voltaire woke up to donations and reporters. Last week, ANP reported on the... more

Vierotchka
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1 response

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9 months ago

Freddie Mac, AIG, JPMorgan Helped Stage Republican Convention

Freddie Mac and American International Group Inc., two companies bailed out by the U.S. government as the financial crisis unfolded, each contributed $250,000 for last month's Republican National Convention, Federal Election Commission filings show.

The money went to the local host committee for the convention in St. Paul, Minnesota, which raised $50 million. The committees can accept unlimited amounts from corporations, unions and individuals. While the donors' names were posted on the committee's Web site, the amounts they gave were not released until the FEC reports. The host committee for the Democratic National Convention in Denver has yet to file.

The U.S. government took over McLean, Virginia-based Freddie and Washington-based Fannie Mae last month, saying that a rise in mortgage defaults threatened the two companies. That same month, federal officials took control of New York-based AIG in exchange for an $85 billion loan to prevent the bankruptcy of the nation's biggest insurer.

Goldman Sachs Group Inc. and Morgan Stanley, New York investment banks that changed to bank holding companies and therefore put themselves under increased federal regulation, also contributed money for the Republican convention. Goldman Sachs gave $255,000, and Morgan Stanley donated $100,000. New York-based JPMorgan Chase & Co., which bought Bear Stearns Cos., contributed $100,000.

Target, Qwest, Best Buy

The largest corporate donors to the host committee were Minneapolis-based Target Corp., which gave $3 million; Denver- based Qwest Communications International Inc., with $2.9 million; and Richfield, Minnesota-based Best Buy Co. Inc., with $2.7 million.

Other big corporate givers included San Jose, California- based Cisco Systems Inc., $1.8 million; Minnetonka, Minnesota- based UnitedHealth Group Inc., $1.5 million; San Antonio-based AT&T Inc., $1.4 million; and Redmond, Washington-based Microsoft Corp., $1.3 million.

New York Jets owner Robert Johnson IV, who has raised more than $500,000 for Republican presidential nominee John McCain's campaign, contributed $500,000. The host committee also received $25,000 from the Saginaw Chippewa, an Indian tribe formerly represented by ex-Republican lobbyist Jack Abramoff, who is now in prison. The Senate Indian Affairs Committee, then chaired by McCain, a senator from Arizona, held a series of hearings on Abramoff's representation of Indian tribes. Freddie Mac and American International Group Inc., two companies bailed out by the U.S. government as the financial crisis... more

Apocalipstick
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9 months ago

Hanky Panky!!

So when Brent comes up to you and asks if you know about Henry Paulson, this is what you should say...

openSermo
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9 months ago

Henry Paulson is a crooked idiot who dropped the ball and squandered the bailout cash

It seems like just three weeks ago that Paulson told us the world was going to end unless we did exactly what he wanted. Way back... more

MandyMonroe
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3 responses

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9 months ago

Behind the Bailout...what we SHOULD have known in JUNE and need to know NOW.

Almost 4 months ago, the handwriting was on the wall. And throwing useless liquidity at the problem will only make it worse. To make matters worse, Morgan Stanley and Goldman Sachs have been speculating in commodities, driving the prices up.

Please read the whole article!

Excerpts from the article by Mike Whitney dated 6/17/2008:

The Fed is currently in panic-mode because it doesn't have the tools or resources to fix the problems its facing. Its already eaten through more than half of its $900 billion balance sheet and has traded away hundreds of billions in US Treasuries for worthless MBS and collateralized debt obligations (CDOs) which are steadily losing value every month. The Fed is trying to revive the moribund banking system which has lost its main sources of revenue (structured financial investments) and is teetering on the brink of insolvency from its steadily wilting assets, a collapse in commercial and residential real estate, and a rise in corporate defaults...

...Now the underlying collateral (housing) is quickly deteriorating causing a system-wide deleveraging and a flight to safety (US Treasuries, foreign bonds). The dollar is in free fall, credit is tightening, and the banks are only able to stay open due to the generosity of the Federal Reserve...

...The larger question is whether the investment banks---faced with a frozen bond market and ravaged balance sheets---are diverting the money they're getting from the Fed into commodities (via the hedge funds) driving the prices upward and triggering political turmoil around the world?...

...According to economist and author Henry Liu, the same thing happened just prior to the Great Depression:

"The problem in 1929 was, as it is in 2008, that asset prices buoyant by speculation had outstripped the purchasing power of stagnant income of consumers. Assets and commodities in the economy were valued at price levels that aggregate wage income could not sustain. The solution was not to inject more useless liquidity to sustain inoperative price levels, which will only make the problem worse, but to INTRODUCE DEMAND MANAGEMENT THROUGH FULL EMPLOYMENT AND LET WAGES QUICKLY RISE BACK UP TO THE LEVEL OF WAGE-PRICE EQUILIBRIUM. This was the policy objective of Roosevelt's New Deal Program, an objective not yet recognized by policymakers in 2008 even amid a revival of populist rhetoric....

...There is no way to escape the day of reckoning now facing the financial system; the hundreds of bank failures, the corporate defaults, the meltdown in real estate, the massive loss of jobs, the dreary contraction of credit, the tumbling stock market, and the blow to our national confidence. But there is a way to rebuild, to reassert control over our own currency; to "even the playing field" and recommit to a strong middle class; to smash the system that diverts the greatest portion of the nation's wealth to a handful of unelected oligarchs whose main objectives are to expand their own personal power and subvert the democratic process. The existing system cannot meet the challenges of the new century. It's gotta go.Almost 4 months ago, the handwriting was on the wall. And throwing useless liquidity at the problem will only make it worse. To... more