NEW YORK — Even on Wall Street, the land of six- and seven-figure incomes, jaws dropped at the news Tuesday: After all that federal aid, a resurgent Goldman Sachs is on course to distribute bonuses that could rival the record paydays of the heady bull-market years.
Goldman posted the richest quarterly profit in its 140-year history and, to the envy of its rivals, announced it had earmarked $11.4 billion so far this year to compensate its workers. At that rate, Goldman workers could, on average, earn roughly $770,000 each this year — or nearly what they did at the height of the boom.
Senior Goldman executives and bankers would be paid considerably more. Only three years ago, Goldman paid more than 50 employees above $20 million each. In 2007, CEO Lloyd Blankfein collected one of the biggest bonuses in corporate history. The latest headline results — $3.44 billion in profit during its second quarter — were powered by earnings from the bank’s secretive trading operations and exceeded even the most optimistic predictions. But Goldman’s good fortune, coming only a month after the bank repaid billions of bailout dollars, raises questions for Washington, D.C., policymakers.
The bank holding company, analysts warned, is embracing financial risks that many of its competitors are unable or unwilling to take. While Goldman managed those risks this time, its strategy could backfire if the markets turn against it. “I find this disconcerting,” said Lucian A. Bebchuk, a Harvard law professor. “My main concern is that it seems to be a return to some of the flawed short-term compensation structures that played an important role in the run-up to the financial crisis.”
Even inside Goldman, executives acknowledged that the bank’s stunning results, coming during a painful recession, presents something of a PR challenge. “We are cognizant of it,” said David Viniar, Goldman’s chief financial officer. “We understand that we are living in a very uncertain world where a lot of people are out of work.”
Excuse me, but where is our bonus? Who bailed these idiots out? Who makes this kind of money while failing at their profession. CRIPES!!!!!
question:
Since G&S converted to a bank, does this mean they were allowed to leverage the $10 billion to $100 billion (via the fractional reserve 10:1 standard) -if so, count it towards profit?
-or did they just pull the Mark to Fantasy card out of their Mark to Market (and Model) play deck and adjust their asset worth accordingly?
(i still find hard to believe no one sees any conflict of interest with all the ex-goldman employees sprinkled through The Fed/Treasury and a few other hi levels of government)
nonetheless, if they are *cough* legit, more power to’em for turning a profit during [somewhat] hard times.
viva la capitalism!
-s
#41, Soundwash,
They turned a profit because they got AIG to pay for all the loans (toxic assets) that failed. Even though they were presented to AIG as legitimate and trustworthy, they weren’t. Our tax dollars bailing out AIG are what gave Sachs Goldman their profit.
And yes, you are quite correct, I wonder too at the preferred status they are getting.
>> bobbo,
>> Taxes = Slavery in your mind?
Most conservatives are completely dishonest in regard to taxes — both intellectually and in practice.
The whine and carp about taxes but then use tax-payer provided SERVICES more than the rest.
Take Rush Limbaugh for example — solely becasue of the FCC-managed public airwaves, he has made a career of preaching about the evils of government! Thanks to FAA managed air travel, he flies around getting huge fees complaining about the evils of government!
It goes on and on like that, with conservatives — they get rich on the public commons but then credit themselves and only themselves for their success.
IF’
Tax was used as a CAP for our government, for the amount of money they could spend, it MIGHT be a good thing.
But the gov just PRINTS the money it THINKS’ it needs.
For a gov that was saying “Oh, poor me, we dont have any money”, “we need to cut services, we are broke”, its FUNNY, when the banks/Auto industry needs the money, WE DUMP IT ON THEM..
#42 Mr. Fusion,
-thank you.
however, can you really call an insurance payout “profit”? -yes, i realize that normal GAAP rules are now a figment of our imagination, possibly even illegal, in our fantasy driven economy and government, but come’on, i thought these guys made profits by “trading” -not looting and flipping over Treasury monies?
(ok, i’m not *that* naive, but still)
(granted, i have a tongue in cheek expression on my mug at the moment, but do you really think these guys look at all of wall street with a *straight face* as they report the quarterly earnings…without busting out laughing when the cameras are turned off?)
::sigh::
i guess the only thing left to ask is:
How do i get my own private discount window to The Fed? (complete with a seat at “The Table”)
-s
So basically Goldman Sachs is rewarding a bunch of idiots, who sat in their chairs, dumbfounded, while the US taxpayers came to their rescue. And they should be rewarded WHY?! Because they didn’t get fired? Or more likely, because they didn’t rat G.S. out now, or in the near future. This is “keep them quiet” money. So they won’t go public with what goes on at G.S. WHAT?! Did you actually think they paid out these bonuses for well done job? Ha, ha, ha, ha, ha, ha, ha.