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You are here: Home / Politics / Domestic Politics / Grab That Cash With Both Hands and Make a Stash

Grab That Cash With Both Hands and Make a Stash

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Not bad work if you can get it:

Comfortably beating analysts’ forecasts, Goldman Sachs earned second-quarter net profits of $3.44 billion, or $4.93 a share, the bank announced on Tuesday.

The results continue a robust turnaround for the firm since it rode out the final tumultuous months of last year with the aid of a federal rescue. They come just one month after it paid back its $10 billion in federal aid.

Goldman’s profit was lifted by record quarterly revenues of $6.8 billion in its fixed income, currency and commodities unit, where mortgage and other credit instruments are traded, the bank said in a statement. This business has performed well since the bank has taken on greater levels of risk since the end of last year.

Why are ANY of these banks taking on greater levels of risks? Also:

Executives at Goldman Sachs sold almost $700m worth of stock following the collapse of Lehman Brothers last September, according to filings with the Securities and Exchange Commission.

Most of the sales occurred during the period in which the investment bank enjoyed the support of $10bn from the troubled asset relief programme.

The surge in selling among Goldman partners, at a time when the US government had thrown a lifeline to Wall Street, is likely to draw criticism from lawmakers on Capitol Hill. Having survived the crisis, the bank is expected to report strong second-quarter earnings on Tuesday on rebounding trading profits.

I’m sure someone on the hill will issue a sternly worded letter. Maybe on the back of an envelope used by Goldman to mail Schumer and others campaign contributions.

Reader Interactions

30Comments

  1. 1.

    Face

    6.8 billion in revs in one quarter? For a company with no tangible product/item/patent, this is just stunning.

    At least oil companies can point to the price of oil for their profits. Just how does GS explain this?

  2. 2.

    Buckethead

    Why are ANY of these banks taking on greater levels of risks?

    When taxpayers are covering their losses, they aren’t risking anything.

  3. 3.

    Dracula

    Per usual, Greenwald’s pissed that peeps aren’t pissed about this.

    Just wait until the bonuses for such record profits are announced.

  5. 5.

    A Mom Anon

    How much money do these fucks need?

    Maybe I’m just a peasant,but one million dollars would be plenty for me to live a good life,put my son through school and leave me enough left over to provide a little for my grandbabies.

    I hate them,with the passion of a kabillion fiery suns.

  6. 6.

    The Grand Panjandrum

    @Buckethead: Word.

    The risk they are taking is that Harry Reid, Tim Geithner and Ben Bernanke will say means about them or even send them the much dreaded Strongly Worded Letter. Oh, the horror!

    Can these bastards just, please, suck me off with a breast pump?

  7. 7.

    ItAintEazy

    @Face:

    It’s easy if you don’t add the months in which you lose money.

    Seriously, we are long, long overdue for a Bastille Day in this country.

  8. 8.

    linda

    sotomayor is quite awesome in her testimony. her demeanor, intelligence, and remarkable patience dealing with that mouthbreathing nitwit from alabama — jeff sessions.

  9. 9.

    Germane Jackson

    What risk? There’s no risk in stealing people’s wallets when you’re the policeman.

    Has anyone read Complicity by Ian Banks? Exactly when are the heads of these companies going to start being treated like the heads of state they are? And by that I mean, when will they start being assassinated? It’s amazing it hasn’t happened already.

  10. 10.

    angulimala

    How much money do these fucks need?

    I don’t care how much they “need” and I don’t blame them for wanting a lot of money.

    I do think it’s fucking suspicious that GS is making so much more than all the other banks in this time of economic problems.

    It’s luck or they are cheating somehow. Right now, I’d bet on the latter.

  11. 11.

    linda

    t’s luck or they are cheating somehow. Right now, I’d bet on the latter.

    the latest revelation about the gs secret trading program that gives it a heads up on what others are doing seems to me a screaming manipulation of the market exercise. and yet, nothing. must be because the only one focusing on that is that rude boy, matt taibi. he says ‘fuck’ alot.

  12. 12.

    SGEW

    I propose a new tag for these sorts of posts: “Shit That Makes Ralph Nader Look Better In Hindsight.”

  13. 13.

    Comrade javafascist

    Knock Knock

    Who’s there?

    Goldman Sachs.

    Goldman Sachs who?

    Goldman Sachs figured out a way to make the public assume the cost of risk while keeping the profits.

    I don’t get it.

    No you don’t. But we do, which was the point.

  14. 14.

    Johnny B. Guud

    I do think it’s fucking suspicious that GS is making so much more than all the other banks in this time of economic problems.

    Actually, GS has always been the industry leader in terms of profitability, EPS and whatnot. There’s really nothing unusual about them leading the pack now.

    The fact that they’re making gazillions now is only more salt in the proverbial wound, given that we can no longer use our houses as ATMs to buy different color Ipods and other materialistic crap, and our pittance-like retirement plans are in the toilet the recession appears to be so pronounced.

  15. 15.

    Comrade Dread

    How much of this ‘profit’ comes from TARP or off the books Fed lending, I wonder?

    Per usual, Greenwald’s pissed that peeps aren’t pissed about this.

    Hell, I’m a libertarian, but the more I hear about Goldman Sachs, the more I want to throw in the towel, grab a hammer and/or sickle and become a Bolshevist.

  16. 16.

    Brachiator

    I’m sure someone on the hill will issue a sternly worded letter.

    The Brits aren’t too happy about Goldman either (Bailed-out bankers share in £4bn bonus pool as Goldman Sachs posts massive profit)

    The bank, which has more than 5,000 staff in the UK, also delivered a 65% rise in second-quarter profits of £2.1billion – well above expectations…. Top earners among the bank’s 5,500 London staff are likely to include joint Goldman Sachs chief executives Michael Sherwood and Richard Gnodde as well as Yoel Zaoui, head of investment banking in Europe.

    It also came as MPs demanded that bankers should be hit with a punitive 90 per cent tax on bonuses.

    Analysts believe the Goldman Sachs bonus pool could double to £12billion this year if the trading performance continues. Goldman insist all bonus payments are tied to the firm’s performance and noted that it is only halfway through the year. Rival banks such as Morgan Stanley, Deutsche Bank, Barclays also look set to pay bumper bonuses this year.

    It looks as if both Democrats and Republicans were played for fools when it came to the financial markets needing a bailout.

    And it may be that even the best economists aren’t necessarily good at discussing business segments. I think that Krugman would have a hard time justifying the government taking “toxic assets” off the hands of banks which are not just rolling in dough, but doing Flying forward one-and-a-half somersaults, pike dives into oceans of profits.

  17. 17.

    bayville

    Does this mean the MSM will cease the nauseating feature stories on the brokers, traders and money managers who are suffering – just like the rest us – during this Great Recession?

    Ya’ know, the stories about the guys and gals who’ve been forced to drink second-shelf liquor and suck on $7 domestic cigars instead of the premium sh#t they are accustomed.

  19. 19.

    bayville

    It looks as if both Democrats and Republicans were played for fools when it came to the financial markets needing a bailout.

    So was an obnoxious prick of a Pullitzer Prize winner. Remember:

    The basic problem here is that too many people don’t understand the seriousness of the situation.
    Americans fail to understand that they are facing the real prospect of a decade of little or no economic growth because of the bursting of a credit bubble that they helped create and that now threatens to bring down the global financial system.
    Politicians worry less about preventing a financial meltdown than about ideology, partisan posturing and teaching people a lesson. Financiers have yet to own up publicly to their own greed, arrogance and incompetence. And leaders of foreign governments still think that this is an American problem and that they have no need to mount similar rescue efforts in their own countries.

    And this.

    Columbia, Md.: Hello Steve, You are correct in your piece yesterday that ‘we don’t get it’. I don’t get the fact that millions of admittedly reckless homeowners are losing their homes but we only worry about bailing out big banks. Everybody says ‘This is a credit crisis. It’s all about confidence’. Well, I don’t have confidence in the people who authored this ‘bailout’ and give them absolutely zero credit for the job they have done so far. I ask again what I asked you last week: Why not buy out the bad mortgages of the ‘subprime’ borrowers? The lenders will get their money and the government might get its money back in the future. Why not bail up instead of bail down? What is the consequence and how much will it cost? One of the reasons I don’t like this bailout is that no one knows how much it will cost and we don’t get any benefit or ‘shares’ for bailing out this banks. Thanks.
    washingtonpost.com: They Just Don’t Get It

    Steven Pearlstein: This is not a bank bailout, in the sense that you use that term, meaning a bailout for its shareholders and its top executives. Nobody has been more critical of the practices of banks and Wall Street and brokers than I have, probably long before you were even focused on this issue, so I certainly don’t owe you any apology on that one. If you want to check, you’ll see I won a certain prize for that. We have already passed legislation to “bail up,” several months ago, using an idea that I was one of the first people to push (refinancing involving a reduction of principal in return for equity stake in the house). We might want to expand that program even further, but it is simply not true that we haven’t done anything. We put $300 billion of refinancing into that, thanks to Congressman Frank, who you would villify. And if you had read the proposal, there are several ways in which the taxpayer will get “shares” in the banks that would be directly participating in the program. So I’d say on all four points, you are misinformed.

  20. 20.

    Alan

    Just remember these are the friends Jim Cramer cried about–how they were really hurting. Oh yeah, and Obama was destroying wealth…that is until he began to play ball.

  21. 21.

    Mike G

    Time for Government Sachs to pay back the $13 billion in TARP money they received laundered through the bailout of AIG. Fucking parasites.

  22. 22.

    Fulcanelli

    What teh hell is the matter with you people? This is great news!

    After Goldman Sachs pays their Whopping One Percent in Federal Income Taxes on this obscene amount of profit, the deficit will be history!

    Batten down the hatches bitches, this rising tide of tax revenue and industrial productivity is gonna lift all our effin’ boats clear out of the water (and onto the jagged rocks).

    Good Times!

  23. 23.

    Rick Taylor

    Why did we pay these people something like seventeen billion dollars through AIG again?

  24. 24.

    bayville

    More Pearlstein from Oct. 2008: Evidently, he still believes in the tooth fairy:

    New York, N.Y.: With regard to the bailout, and why many people do not support it, is part of the problem the creator and messenger? I support the bailout (reluctantly), but every time I look at Secretary Paulson I think “That man made a lot of money while creating this crisis, has never admitted fault, said “I’m sorry,” or even indicated that he would change the Street’s behavior in the future.” It’s just “give me $700,000,000,000.”

    Steven Pearlstein: Lots and lots of people on Wall Street contributed to this crisis. Paulson probably has some culpability. But in the list of villains, he’s pretty low on the list, I would imagine. In any case, he has shifted course in his new job and done what is needed to be done. He let Lehman fail, and that nearly brought Goldman down with it, which doesn’t sound like a guy who was out primarily to protect his Wall Street friends. I think you may want to think again before questioning his motives or h is competence. He’s obviously been an inadequate salesman.

    To summarize, in Pullitzer Prize-winning Steve Pearlstein’s view, Paulson – and his “crew” -were purely altruistic when they put together the original bailout package. Is there a greater example of journalistic naivety in this past year than this?

  26. 26.

    Brachiator

    @Alan:

    Robert Reich makes an interesting point regarding how GS’s profits will impact the investment banking culture—plus ca change, plus c’est la meme chose.

    Great link. I particularly like this part from Reich (with whom I generally disagree)

    Goldman is skillful at playing the market. Now that most of its major competitors are out of the action or still under the strict control of the Treasury and the Fed, it has the market mostly to itself. Expect the others to jump back in to high-risk deals as soon as they can. But Goldman is also skillful at playing politics — something its rivals aren’t nearly as good at.

    So the Treasury and Fed might not have so much stabilized financial markets as helped a particular bank (Goldman) eliminate the competition. And again, the Brits, which nationalized a couple of banks, still got suckered even though they picked a different path than the US.

    I don’t know. I think the government has to look beyond micro-regulation (trying simply to react to the previous crisis) since the bankers are more nimble at dancing around overly-specific attempts to rein them in. Perhaps they should look at increasing reserve requirements and forcing down consumer interest rates.

  27. 27.

    bayville

    @Alan:
    Reich:

    Goldman is skillful at playing the market. Now that most of its major competitors are out of the action or still under the strict control of the Treasury and the Fed, it has the market mostly to itself.

    These were the concerns of legitimate skeptics way back in September 2008 with regard to the bailout. One of the benefits of Lehman going belly-up was that it watered down the competition – and at the same time it was an opportunity for Paulson to get back at the man he hated most in the world, Lehman Bros. CEO Richard Fuld.
    It’s all just a game to these scumbags, even in these worst of times for everyone else.

  28. 28.

    Johnny B. Guud

    From the Reuters story on Goldman’s earnings:

    Goldman on Tuesday said money set aside for pay surged 75 percent in the second quarter. Compensation and benefit costs were $6.65 billion, up 47 percent from the comparable quarter in 2008.

    Given a 16 percent reduction in staff from last year, to 29,400, the bank set aside an average $226,156 per employee in the quarter, up from $129,200 a year ago. If the quarterly figure is annualized, it comes to $904,624 per employee.

    …

    Front said Goldman could pay some “hefty bonuses” this year but not as big as before the financial crisis, when senior managers pocketed tens of millions of dollars.

    Gustavo Dolfino, president of New York-based headhunter WhiteRock Group, estimated compensation packages could top around $10 million or $11 million, and will be just for a handle of traders that structured deals that made money.

    “The biggest bonuses will go specifically to the foreign exchange and commodities traders, that are the people accountable for the kind of profits that Goldman is doing,” Dolfino said.

    /blockquote

    Despite the big uproar over the AIG bonuses earlier this year, I don’t think we’ll be hearing any significant peeps from the political faux-populists in DC about this anytime soon–given how politically entrenched Goldman Sachs is and all.

    Edit: Blockquote fail.

  29. 29.

    Irony Abounds

    The real crime here is that Goldman Sachs is still chartered as a commercial bank, thereby getting access to cheap money from the Fed which they then employ in risky investments. CNBC reported that of the $18 Billion in revenues in the 2nd quarter that Goldman received, $10 Billion was tied directly to risk investments. Apparently Goldman’s VAR, which is a measure of risk in your investments, is significantly greater than any other bank’s.

    Goldman became chartered as a commercial bank at the height of the meltdown, which gave it certain Federal guarantees and access to cheap money from the Fed. They have no depositors, and there is no reason for them to be a commercial bank at this point. They really are just greedy awful people. I am now convinced that despite any short term pain, the entire banking system should have been allowed to collapse just as a lesson to these blood suckers.

  30. 30.

    MBSS

    hivemind

    i was just thinking about the lyrics of that song, and listened to it on the radio today.

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