Truemors
is reporting from
Member
NP Rank:
NP Rank:
America Must Rescue the Bonuses at Goldman Sachs
Share:
by René | September 25, 2008 at 06:15 am
353 views | 28 Recommendations | 17 comments
America Must Rescue the Bonuses at Goldman Sachs: Michael LewisCommentary by Michael Lewis
Sept. 24 (Bloomberg) -- Anyone who caught even a sliver of yesterday's hearings in the U.S. Senate on the proposed Treasury bailout of the mortgage-backed securities market knows that the current financial crisis is far from over. Suddenly all sorts of previously unthinkable catastrophes seem possible.
The total collapse of the global financial system is one thing -- everyone at Davos in January saw that coming. But the shrinkage of the Goldman Sachs Group Inc. bonus pool is another. Whatever else the Treasury achieves it must know that if the employees of Goldman suffer any sort of pay cut, it will be judged to have failed. And our country may never recover.
Last year Goldman paid its employees $20 billion, 44 percent of the firm's revenue. Chief Executive Officer Lloyd Blankfein took home $68.5 million, and many otherwise ordinary human beings took home $10 million or more.
---
Paulson's Payday
Lately, for instance, I have heard several hedge-fund managers gossiping about Treasury Secretary Hank Paulson. One of the things they say is that, in leaving Goldman for government service, Paulson made the greatest trade of his life. Not only was he required to sell his half-billion dollars in Goldman stock near the high, but also, as Treasury Secretary, he was exempt from capital-gains taxes. By getting out of Goldman while the getting was good, the guy may have doubled his net worth.
----
Poker Game
The Treasury has proposed using $700 billion of taxpayers' money to buy the shaky investments created by the likes of Goldman Sachs and sold to customers. This is good, for many obvious reasons, and one less obvious one, too. Obviously, it has slowed the market's desire to put Goldman out of business. It also offers Goldman a place to stuff its bad investments at prices well above market levels.
But the Treasury plan also creates this wonderful hidden opportunity for Goldman Sachs to make a killing, and thus preserve its bonus pool for a long time to come.
Think of Wall Street as a poker game and Goldman as the smartest player.
Read the rest on Bloomberg.com
What is NowPublic?
NowPublic lets people work together to cover news events around the world.
Most RecentMost Recommended Comments (17)
at 07:05 on September 25th, 2008
Paulson has only agreed to be Treasury Secretary for 2 years. He has said for some time that he will leave then. He can retire and live like a king. I am sure they will beg him to stay, and, I hate to say this, but if we are lucky, he will. After the market crashed in 1929, the way I heard it, they chose Joseph Kennedy to head the SEC to fix the market, even though he was one of the main culprits in causing the crash, as he amassed a fortune for himself. I had always heard it would be someone who helped create this mess, that would help clean it up, and so it may come to pass. I have heard Goldman Sachs referred to as the mother ship. We are stuck with what the Government refused to oversee and refused to prevent, namely the looting of our companies, our portfolios, and our retirement funds, despite repeated letters to the government and the SEC by thousands of people. Now the country will have to pay the piper and one of them is Paulson, who is supposedly a genius, if he agrees to take the job. There is probably nobody more qualified.
at 07:22 on September 25th, 2008
Like 'It Takes a Thief'?
at 07:07 on September 25th, 2008
René, I like this story. It's good stuff.
at 12:44 on September 25th, 2008
thanks, did you see The Case of the Disappeared Minority Subprime Borrower? The other side of this financial meltdown other than naked short selling.
at 09:54 on September 25th, 2008
René, I like this story. It's good stuff. Paulson may return to Goldman, he was employee
Henry M. Paulson, Jr / Goldman bros
Source: ustreas.gov
at 10:30 on September 25th, 2008
Hope you realize that the 'commentary' I highlighted was somewhat satirical. Oh, Paulson would love to go back to the company he is about to save to collect another $168,000,000 per year. Yes, indeed.
at 10:02 on September 25th, 2008
René, I like this story. It's good stuff.
at 12:45 on September 25th, 2008
Thanks, you've got some good stuff on NP too.
at 11:03 on September 25th, 2008
Interesting stuff!
at 11:04 on September 25th, 2008
René, I like this story. It's good stuff.
at 12:47 on September 25th, 2008
Thanks, paschen, there's some really weird stuff going down.
at 13:20 on September 25th, 2008
The story that has floated into public view, like the very short Pres prime time address last night is less than satisfactory. We are not privy to what and how this works, probably because we, unlike our elected representatives in Congress, are not capable of understanding such advanced concepts. Any hint of the reality is more than welcome.
at 14:49 on September 25th, 2008
For hints of reality: Try exploring all the links on the story I posted about The Case of the Disappearing Minority Subprime Borrowers. And Catherine Austin Fitts also provides lots of good advice on her Solari.com.
at 13:22 on September 25th, 2008
René, I like this story. It's good stuff.
at 14:58 on September 25th, 2008
Thanks. see the links I added in comment above.
at 13:52 on September 25th, 2008
René, I like this story. It's good stuff.
at 15:03 on September 25th, 2008
Is there a statute of limitations for executives looting their companies?