More than money at risk for Goldman Sachs bosses (profits and pay surge to near record levels)

Have they learnt nothing?” goes the cry, as profits and pay at Goldman Sachs surge to near record levels.

The investment banks that have survived the crisis have returned to their bad old ways, paying outrageously high bonuses, that encourage excessive risk-taking at institutions that are too big to fail.

Much of this is nonsense. Profits certainly have recovered remarkably quickly and if the markets hold up for the rest of the year the bonuses will surely follow. The size of these payments will be very hard for many ordinary mortals to stomach. After all, Goldman has benefited massively from taxpayer-funded support for the financial system that Wall Street banks helped to undermine.

But, even if you believe big bonuses were a significant contributor to the crisis, there is no evidence that Goldman is encouraging excessive risk-taking.

The vast bulk of the money it is making comes from straightforward stuff such as making markets in commodities — where margins have shot up because competitors have pulled back — or helping companies to raise money from share issues. The bonuses it pays will conform to the rules drawn up by the Financial Services Authority with all the deferrals, clawbacks and the like.

But, say the critics, the fact that Goldman Sachs is too big to fail must inevitably encourage it to take excessive risks. If management screws up, the bank will be bailed out. It is extraordinary how prevalent this idea is among financially sophisticated people. If a bank is bailed out, the depositors will be protected and possibly the debt holders. But not the shareholders or the management. They will be no better off than if the bank was allowed to fail.

How many Goldman Sachs alumni are now working for the Obama administration?

GOLDMAN-SACHS-A-THON The Nation is infected with Goldmanites---they're like a STD that takes over the life of the infected. After the market meltdown last year, many Goldman Sachs execs fled to the "safety" of the Federal Reserve and Dept of US Treasury........and are sucking up tax dollars as we type.

Tax cheat (and US Treasury Secy) Tim Geithner hired a Goldman Sachs lobbyist as his COS. ...even though Obama said his admin is off-limits to lobbyists.

GOLDMAN-SACHS IS THE ENEMY WITHIN Sept 26, 2008 The Goldman Sachs Group announced that Edward M. Liddy resigned as a member of its Board of Directors in light of his new role as Chairman and CEO of AIG, Inc......effective Sept 23, 2008. Mr. Liddy was a Goldman Sachs director since June 2003....he served as chairman of the Audit Committee, a member of the Corporate Governance and Nominating Committee and the Compensation Committee.

The New York Times reported Goldman Sachs was AIG's largest trading partner......about $13 billion of US government funds that went to AIG, ended up being paid to Goldman Sachs.......

Ex- Goldman Sachs head, Hank Paulson, as Treasury Secy, stationed his G/S right hand man---Neel Kaskari---- to "oversee" $350B TARP payouts. We still do not know in which G/S rathole these two secreted the first $350B.

Paulson threatened US Senators with Martial Law if they did not vote him the bailout billions. This depraved G/S Pig---Paulson---demanded the TARP be exempt from judicial, legislative, and regulatory review. $350B disappeared without a trace. TARP had NO significant effect on the economy.

GOLDMAN SACHS SCREWS US AGAIN Ex- Goldman Sachser--Treasury Secy Pavelson told Congress bailout billions would be used for one purpose then the foxy, wily Pavelson changes horses in midstream and decides to use the billions for something else.

Typical G/S chicanery.

The heck with Congress enacting the bailout law for one use. Ex-Goldman Sachser Pavelson personally decides he and the G/S guys will use it for "something else."

As US citizens line up at soup kitchens and sell apples on street corners, Pavelson, Kashkari, and the G/S frat boys are cashing in bigtime......numbered offshore bank accounts, "parking" bailout billions at Goldman Sachs and other Wall Street entities; wire-transfers going 24/7.

G/S frat boys at the highest levels of govt are now pulling the levers of power. Watching them operate, we know Goldman types promote their own interests relentlessly...........the rest of us be damned.

G/S insiders are pocketing as fast as they can----making motions to bail out the crooks who contributed to the economy's meltdown (part of G/S' exercise in greed).

========================================

US Sen. Jim Inhofe (R-Oklahoma)famously said that Congress was not told the truth about the $700 billion bailout. "The American people don't know how much money Treasury Secy Henry Paulson has given away to anyone. IT COULD BE TO HIS FRIENDS. We don't know. There is no way of knowing.''

The late economist John Kenneth Galbraith blamed Goldman Sachs policies for causing the Great Depression of '29. In his book, The Great Crash, 1929, Galbraith, a key figure in JFK's admin, an entire chapter titled “In Goldman, Sachs, We Trust,” details the “large-scale corporate thimblerigging” that Goldman and other Wall Streeters practiced in the 1920s.

Goldman creates markets, and destroy them when it suits their purpose. They made sure that Lehman Bros. (and Bear Stearns, their competitors) were allowed to fail.......

LEHMAN BANKRUPTCY FALLOUT--FLORIDA Florida stands to lose $1 billion from Lehman Brothers' bankruptcy. Lehman Bros managed Fla's public assets, sold securities, underwrote bond deals and handled residential and commercial mortgages. Local governments are stuck with about $556 million in tainted securities that they can't redeem.

More than $440 million disappeared from the Fla pension fund. Counties, cities and school districts face a loss of more than $300 million for roads, sewers and schools. Fla has $290 million less to pay for everything from hurricane claims to health care, community colleges and care for infants with disabilities.

The biggest casualty of Lehman is Florida's giant public pension fund. It took a $230 million hit on Lehman stocks and bonds. The pension fund holds another $53 million in Lehman bonds that have lost most of their value and has $323 million tied up in tarnished mortgage-related securities purchased from Lehman. If the state sold those securities today, the pension fund would lose about $188 million more.

==================================

BGRND When ex-Goldman Sachs head--- Jon Corzine--- became NJ governor, he named several Wall Street cronies to the super-secret State Investment Council (SIC invests state pension billions):

(1) W. Montgomery Cerf, managing director and senior banker with JP Morgan's private bank unit, (2) Erika Irish Brown, a senior VP at Lehman Bros, , (3) Jose R. Claxton, director of marketing and investor relations with Latigo Partners---a hedge fund, and, (4) Goldman buddy Bradley Abelow to Treasury.

The SIC stunned the financial world Nov 2008----- JUST BEFORE THE WALL STREET CRASH --by putting $180M pension funds into Lehman Brothers (then about to sink). Can you say buddy bail-out? Kickbacks? Offshore wire transfers? Numbered accounts?

Lehman Bros went belly-up...... even AFTER Corzine ordered the state's Economic Development Authority to give Lehman Bros $123 Million tax dollars FOR DOING NOTHING. That's right---FOR DOING NOTHING. The EDA brainiacs unloaded $123 million tax dollars on Lehman Brothers (AND Morgan Stanley) ....……to cancel an earlier deal.

Corzine still has not announced the mega-hit his state took from Lehmans' bankruptcy.

Free Market Capitalism?

GOLDMAN SACHS BRASS STILL LIVING IN THE PAST
11/22/08, By Terry Keenan, NY Post

Did you hear the news? Goldman Sachs minted 94 new partners this week, a designation that comes not just with a fancy title but with the promise of untold riches this bonus season and for years to come. Trouble is, the firm seems to have forgotten the 300 million new partners it acquired weeks earlier when the US taxpayer footed the bill for a $10 billion loan to Goldman on extremely generous terms. Yes, get ready for it.

While the rest of America is hunkering down for the worst Christmas in 25 years, Wall Street's elves are merrily at work socking away at least $20 billion to be paid out in bonuses, and that's just for the three "investment" banks still standing - Goldman, Morgan Stanley and Merrill Lynch. After taking $10 billion from Uncle Sam and after shareholders have seen shares fall more than 50 percent. Which brings me to the next outrage. To begin with, none of these firms are investment banks anymore. Perhaps the good folks at Goldman forgot that they now work for a commercial bank. No, why bother with those troubling technicalities if you can be paid like an investment banker in the halcyon days, or better yet, like a partner in one of Wall Street's most exclusive private partnerships.

One problem: Goldman is no longer private, exclusive or hugely profitable. Goldman defenders will tell you that the firm was "forced" to take Uncle Sam's money last month, so as not to make the rest of the takers feel bad. As such, the argument goes, the firm has every right to go ahead with bonuses as usual. Don't buy that for a minute. In a letter that was circulating around Wall Street Friday, United Steelworkers President Leo Gerard presented Treasury Secretary Hank Paulson with a detailed analysis of Treasury's investment in the firm Paulson once headed.

It notes that just 20 days before Goldman announced that it would "accept" the Treasury's $10 billion investment, Warren Buffett invested $5 billion in Goldman. Although Buffett basically acquired the same type of preferred stock as Uncle Sam, taxpayers will get a 5 percent dividend for the first five years, while Buffett will get 10 percent. They don't call him the Oracle for nothing.

TERRY KEENAN is anchor of Cashin' In, an investing program that appears on Fox News Channel on Saturday mornings at 11:30.

SOURCE http://www.nypost.com/seven/11022008/business/goldman_sachs_brass_still_living_in_the__136494.htm

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.