Goldman Sachs is on pace to make record bonus payouts after a robust first half, the Guardian newspaper reported on Sunday.
Goldman staff in London were briefed on the outlook and told they could look forward to the bonus hikes if the company registers, as predicted, its most profitable year ever, the report said.
The surge in projected profit can be attributed to a lack of competition and increased revenue from trading foreign currency, bonds and fixed-income products, the newspaper said, citing insiders at the firm.
Bonuses have been a point of contention between the Obama administration and Wall Street, which last fall endured a credit crisis that paralyzed the financial markets. The U.S. Treasury responded with the Troubled Asset Relief Program, which made $700 billion in loans available to banks. Goldman Sachs received $10 billion from TARP, which it repaid last week.
In letters to lawmakers last week, Goldman CEO Lloyd Blankfein said the firm is obligated to “ensure that compensation reflects the true performance of the firm and motivates proper behavior.”
What is left unsaid is that the lack of competition that has led to these record profits was engineered by Hank Paulson, former chairman of Goldman Sachs, when he was secretary of the Treasury under George W. Bush. After bailing out AIG, which then channeled billions to Goldman, Paulson then allowed its competitor, Lehman Brothers, to sink, causing a panic on Wall Street.
Speculation about why Paulson left Lehman go under mostly involved the analysis that it was not sound to bail out all the firms in trouble. But now that the bonuses have been announced and the reason for them given, it is clear that Paulson was aiding his old company. That this is going on with Tim Geithner saying nothing about it is a scandal of monumental proportions that is going largely unnoticed in most of the mainstream press.
Were there an effective Congress with a committee to investigate the causes of the financial collapse, such as the commission headed by Ferdinand Pecora in the Thirties, this inaction by Paulson regarding Lehman would raise a red flag. As it is, Lloyd Blankfein, who succeeded Paulson at Goldman, is getting away with this while people are still losing their jobs and their homes in considerable numbers.
[Editor's Postscript: Any piece that manages to peeve former Goldman broker Jim Cramer must be doing something right.]
The whole situation is outrageous. On top of this scandal rumors are beginning to circulate that Goldman and other banks that gave back the TARP funds are facing big trouble with the upcoming collapse of the commercial real estate and credit card loan markets. So, yes, that’s right, they may need to ask for another round of bailouts. Only they’ll do it after they gave back the first round and collected the bonuses. Meanwhile the people get no healthcare and the bombs fly in Iraq, Afghanistan and Pakistan. If they don’t put a stop to this the streets here are going to look like they do in Iran.
After watching Michael Moores new movie: ‘Capitalism: A love Story,’ there was something very interesting about this story ‘that was not said (out loud) to the public.
Everyone of the Wall Street thieves - were, (listen up) = Jewish! (We’ll discuss why Goldman-Sachs, currently holds all the top positions in the US Federal Reserve, the US Treasury, Summers, the Paulsons and, of course Jew Bernake, et. al, - that make up the the Obama administration’s Israel 1ster ‘demolition team’ - and still growing strong every day - GULP!
Yeah, ‘anti-semitism’ raises its ugly head one again, huh folks?
BULL SHIT!
Actually, calling an ace - an ace, is a long standing tradition American tradition.
TheAZCowBoy
Tombstone, AZ.