Posted on 07/15/2009 10:00:34 PM PDT by FromLori
Yesterday saw one TARP recipient, Goldman Sachs, report $3.44 billion in profits even as another, CIT, teeters on the edge of either bankruptcy or another taxpayer bailout. Which way CIT will tip remained unclear as we went to press, but its very plight shows how the government's approach to systemic risk has created groups of financial "haves" and "have nots."
What the Goldmans of the world have in addition to profits is the widespread belief that they are too big to fail. Both Goldman and CIT converted into bank holding companies at the height of the financial panic last fall, which made them eligible for TARP injections. Goldman also benefited at a crucial moment from the Federal Reserve takeover of AIG, and it received the additional filip of FDIC-guaranteed debt issuance through the Temporary Liquidity Guarantee Program. CIT was excluded from the latter program on grounds that it didn't pose a systemic risk, even as larger competitors like General Electric were allowed in.
(Excerpt) Read more at online.wsj.com ...
If the WSJ is an “excerpt only” source, it’s a no no to post “the rest” down thread. If it’s not an excerpt only source why not post the whole thing to begin with?
Just wondering.
Oh I did not know you could not post the rest yikes.
No more bailouts!
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