In The Blogs

Goldman's Billions

| Thu Jul. 16, 2009 9:28 PM PDT

Matt Taibbi on the $3.44 billion quarterly profit announced by Goldman Sachs yesterday:

One of the most hilarious lies that has been spread about Goldman of late is that, since it repaid its TARP money, it’s now free and clear of any obligation to the government — as if that was the only handout Goldman got in the last year. Goldman last year made your average AFDC mom on food stamps look like an entrepreneur. Here’s a brief list of all the state aid that is hiding behind that $3.44 billion number they announced the other day.

Click the link to read the rest. And here's the New York Times on Goldman and JP Morgan: "Both banks now stand astride post-bailout Wall Street, having benefited from billions of dollars in taxpayer support and cheap government financing to climb over banks that continue to struggle."

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Comments

Look in a mirror at "They're

Submitted by Anonymous (not verified) on Thu Jul. 16, 2009 10:02 PM PDT.

Look in a mirror at "They're too big to fail" Kevin Drum. Mustn't break them up. Mustn't.

Confession: Only got halfway

Submitted by Tilli (MojaveDesert) (not verified) on Fri Jul. 17, 2009 1:20 AM PDT.

Confession: Only got halfway through Matt's piece.

It's too depressing.

JPM and Goldman Sachs

Submitted by Neal (not verified) on Fri Jul. 17, 2009 4:54 AM PDT.

Read the article attached below and understand exactly what happened.

The original mortgage bonds failed (down rated severely)due to people unable to pay their mortgage.

JPM and Goldman Sachs re-assembled the remaining mortgages into a new bond that was "Aaa" rated (how?). These "new" bonds were sold (to whom?)

Six months later these bonds were re-rated to "junk" status due to non-performance.

And JPM and Goldman Sachs reported record profits.

Barnum was right, there truly is a sucker born every minute.

And $17 billion sold last year and $27 billion so far this year.

(quote)

July 15 (Bloomberg) -- Originally top-ranked securities created in repackagings of home-loan bonds last year by JPMorgan Chase & Co. and Goldman Sachs Group Inc. had their ratings cut to below investment grade by Moody’s Investors Service.

The securities were among the 15 classes of five so-called Re-REMICs from 2006 or 2008 whose grades were lowered by Moody’s because of the “deterioration in performance and ratings” of the underlying bonds, the New York-based ratings firm said in a statement today. One class rated Aaa in the JPMorgan deal from December was cut to B2, or five steps below investment grade.

Securities firms have stepped up the use of such resecuritizations this year in order to create more valuable debt to sell or restructure investors’ holdings, expanding last month from home-loan bonds to commercial-mortgage securities and collateralized loan obligations backed by company loans. More than $27 billion of home-loan bond Re-REMICs have been issued this year, up from $17 billion for all 2008, according to a report last month by Bank of America Corp.

Re-REMIC stands for “resecuritizations of real estate mortgage investment conduits,” the formal name of mortgage bonds. Some of the new securities created in the deals offer investors an additional layer of protection from losses and downgrades, which boost the capital needs of banks and insurers and can force some investors to sell debt.

(end quote)

I hope your pension fund or IRA doesn't hold these.

What lessons have been learned? Who has learned the lessons? Were the perpetrators humbled and chastened enough from the chaos of the last couple years to tread a new path?

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What is really important...

Submitted by Fascism! Communism! Totalitarianism! (not verified) on Fri Jul. 17, 2009 6:28 AM PDT.

... is that the banksters get unfettered compensation -- not limited, not taxed, not questioned. Only then can the Republic survive!

If you liberals had listened

Submitted by MacGruber on Fri Jul. 17, 2009 6:40 AM PDT.

If you liberals had listened to conservatives, you would have let Goldman fail. You would have been spared this heartache and the U.S. financial system would be better off for it.

Sadly, in the eyes of liberals, every big company is too big to fail. Gotta bail them out.

excellent find. thanks a

Submitted by Anonymous (not verified) on Fri Jul. 17, 2009 7:43 AM PDT.

excellent find. thanks a lot!

Gee whiz! You mean giving a

Submitted by James2 (not verified) on Fri Jul. 17, 2009 8:12 AM PDT.

Gee whiz! You mean giving a company that failed miserably after making idiot bets a pile of money wasn't really in the taxpayers' best interest? Aw shucks...

Hey Macgruber

Submitted by Tom S (not verified) on Fri Jul. 17, 2009 9:07 AM PDT.

The Republican Treasury Secretary and former Goldman CEO, Hank Paulson, saved Goldman by pumping money to them through AIG (among other things).

You have a conveniently short memory.

This is just like national security, where you guys pretend the Bush administration started on 09/12/01.

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Submitted by compiknews on Sun Nov. 8, 2009 10:04 AM PST.

Hey Tom S. - that's why I

Submitted by MacGruber on Fri Jul. 17, 2009 9:37 AM PDT.

Hey Tom S. - that's why I said conservatives and not Republicans. I disagreed with the Republican-led bailout just like the Democratic-led bailout. As you can see, government bailouts don't work.

Can't wait to see how Obama's bailout of GM will end up; no doubt with another round of government money.

Waht "liberals" supported this?

Submitted by alex (not verified) on Fri Jul. 17, 2009 9:56 AM PDT.

MacGruber: "that's why I said conservatives and not Republicans"

Fair enough, but then what supposed liberals supported it? If you look at this site from the time that TARP started, you'll see the posters here widely opposed. Also staunchly opposed were people like Dean Baker and Joe Stiglitz, who don't fit anybody's definition of conservative. What strawman are you attacking?

How much emphasis in the supposed MSM?

Submitted by alex (not verified) on Fri Jul. 17, 2009 9:48 AM PDT.

How much emphasis in the supposed MSM is this getting? I know Krugman wrote about it (surprised Kevin didn't link to it):

Paul Krugman: The Joy of Sachs

Is the public at large well aware of this? If so, are they outraged or have they just reached outrage saturation (I think I'm getting there myself).

Goldman

Submitted by golfer152212 on Fri Jul. 17, 2009 12:25 PM PDT.

golfer152212 Macgruber dear, Goldman wasn't failing, they and Morgan Stanley didn't need bail-out money. Bear, Lehman Merrill they actually needed the money, Goldman didn't although they got some anyway.
Goldman helped drive Bear and the others under because while their hedge funds were tanking, the company was shorting the mortgage market and earning money as the other firms were on the way down.
They're like the Yankees used to be; everybody hates them because they're good (or bad depending on your viewpoint).