I covered these issues earlier today. It's a decent discussion from this evening on CNBC. For all the reasons why there will be huge PR problems for Blankfein's crew come bonus time, read this. TARP investment paid back, Goldman is still firmly on the government dole.
Though I used to work there, I rarely read CNN's financial reporting. The implied message is the correct message. They have the same problems as CNBC. In fact, they attempt to be CNBC, right down to the pneumatic reporters.
However, they have built a decent bailout tracker, which you can find HERE. It has more company-specific details than the report issued by the FDIC last week, yet it is slightly outdated compared to the same FDIC report. CNN's totals are $10.5 trillion in committed funds, where the most recent number is $13.9 trillion.
Flying Beer Bong Slam Dunk from a Skateboard (ouch!)
Goldman Treasury faces, from left: Steve Shafran, Kendrick Wilson III, Henry Paulson Jr., Edward Forst and Neel Kashkari .
Hey suckers (myself included) check out where our tax dollars are headed: Goldman Sachs to Make Record Bonus Payout.
Government Sachs staff can look forward to the biggest bonus payouts in the firm's 140-year history after a spectacular first half of the year. Staff in London were briefed last week on the banking and securities company's prospects and told they could look forward to bumper bonuses if, as predicted, it completed its most profitable year ever.
In April, Goldman said it would set aside half of its £1.2bn first-quarter profit to reward staff, much of it in bonuses. It is believed to have paid 973 bankers $1m or more last year, while this year's payouts are on track to be the highest for most of the bank's 28,000 staff, including about 5,400 in London.
Why are they so profitable? Evaporating competition.
A lack of competition and a surge in revenues from trading foreign currency, bonds and fixed-income products has sent profits at Goldman Sachs soaring, according to insiders at the firm.
And don't forget the highly-corrupted AIG payouts to counterparties at PAR, that were ordered by B-52 and the Federal Reserve. At least $13 billion of your tax dollars have gone directly to Goldman (not including TARP) via this AIG conduit. And the AIG story is not yet finished.
Also, the change to FASB 157 (mark-to-market- accounting) now allows them to fudge asset pricing on the balance sheet, thus eliminating pesky writedowns and improving earnings and therefore bonus payouts.
Then we have FDIC-backed debt issued by Goldman saving the company hundreds of millions in interest payments. Not to mention the TALF and the myriad other Fed and Treasury liquidity programs in which they participate. Have I forgotten anything? The list of taxpayer largesse is so long it's difficult to keep straight.
Still waiting on my flight, so here's another clip from CNBC's surprisingly excellent, morning broadcast. Readers know that we've come to appreciate regional Federal Reserve President Thomas Hoenig's predilection for candor. Though he was late to dissent, Hoenig has recently been showing his independence from B-52 in his continuing call to allow large banks to fail and fall into government receivership.
I'm comfortable with giving up the charade anytime now. We're going to have to deal with Citigroup in an adult manner sometime in the next 12 months when they return looking for capital. Their off-balance sheet issues alone are enough to kill them, let alone the morass they do keep on the books.
So, it's refreshing to hear voices from Washington (Kansas City in reality, which could explain his forthrightness) that echo our belief (and yours) that certain failed institutions should actually be allowed to fail and their bondholders be asked to take the losses instead of taxpayers. But that's an old rant which you've read many times before. If only Bernanke, Geithner, Summers and Obama would listen. Fat chance to expect those beholden to the banking oligarchy to change their stripes, yet I remain optimistic, almost every day.
FDIC Chief Sheila Bair made an appearance on Squawk Box this morning. Sheila was shut out in the recent All Star Washington Power Grab For Financial Regulatory Pre-Eminence. In other words, Geithner made sure Sheila was kept in the corner, while he, Summers and especially Bernanke raided the pantry.
(Editor's Note: still travelling and will resume normal posting this afternoon...there are photos and a few new cartoons inside.)
And before I am flailed by both sides, remember, I have no dog in this race. I have zero tolerance for the leadership of both parties. Outside of a few outstanding members from both sides (Brad Sherman, Grayson, Issa, Capuano, Ron Paul), I have no positive feelings toward any of the corrupted.
More diversion from CNBC while I travel. There's something for everyone in here, hopefully.
Barry Ritholtz is a Trekkie apparently and within that context offers a different take on the bailouts of Chrysler and GM. His point is actually very solid; had we not bailed out Chrysler in 1979, things might have turned out very differently for Detroit and General Motors in 2009.
Jun 22, 2009 at 8:35 PM
