Bill Moyers Essay: 'Cronyism Blowout At Goldman Sachs'
Outstanding clip. Blankfein speaks at the 2:45 mark.
Bill Moyers explains how the fiscal cliff deal gives tens of billions in tax breaks to banks and corporations (especially Goldman). Even the Wall Street Journal called it a "crony capitalist blowout."
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More details from Matt Stoller:
Eight Subsidies in the Fiscal Cliff Bill, From Goldman Sachs to Disney to NASCAR
Subsidies for Goldman Sachs Headquarters – Sec. 328 extends “tax exempt financing for York Liberty Zone,” which was a program to provide post-9/11 recovery funds. Rather than going to small businesses affected, however, this was, according to Bloomberg, “little more than a subsidy for fancy Manhattan apartments and office towers for Goldman Sachs and Bank of America Corp.”
Michael Bloomberg himself actually thought the program was excessive, so that’s saying something. According to David Cay Johnston, Goldman got $1.6 billion in tax free financing for its new massive headquarters through Liberty Bonds.
Reader Comments (7)
http://www.huffingtonpost.com/2012/11/28/morgan-stanley-ceo-fiscal-cliff_n_2205756.html
http://www.youtube.com/watch?v=FSoglDcRbAg
Congress could overturn the Federal Reserve Act tomorrow, but it won't.
The US government is guilty of genocide against its own people.
http://www.mcclatchydc.com/2013/03/26/187001/financial-crisis-deal-makes-buffett.html
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Warren Buffett, the ultimate buy-and-hold investor, is grabbing a big chunk of stock in Goldman Sachs Group Inc. - without having to buy it.
The deal would make Buffett's Omaha, Neb.-based investment firm, Berkshire Hathaway Inc., one of Goldman's biggest shareholders. Based on Goldman's current stock price, Buffett would wind up owning about 9 million shares, or 2 percent, of the giant investment bank when the deal closes in October.
Buffett, 82, whose business savvy earned him the nickname "Oracle of Omaha," is being rewarded for an investment that amounted to an endorsement of Goldman at the height of the financial crisis, after its Wall Street rival Lehman Bros. had collapsed.
As part of that deal in October 2008, Buffett received warrants entitling Berkshire Hathaway to buy nearly 43.5 million common shares of Goldman Sachs for $115 a share at any time for five years.
Had Buffett bought the stock at that price and sold it Tuesday morning at the going rate of about $146 a share, he would have generated a profit of more than $1.3 billion.
Instead, under an agreement announced Tuesday, the companies will do the same math in the week before the warrants expire in October. Goldman will then provide Buffett with shares equivalent in value to the profit he could have made by buying the 43.5 million shares and then selling them.
For Goldman Sachs, the deal is less dilutive for existing shareholders at a time when the Federal Reserve has criticized the firm's capital plans. And for Buffett, the deal will provide what he loves best - ownership in a company he regards as a long-term winner.
He already had made about $1.7 billion on another part of his 2008 deal with Goldman - an investment in preferred stock that the Wall Street firm repurchased because it was paying Buffett such a hefty dividend - 10 percent annually.