Goldman Sachs' posting of a $2,000,000,000 profit during the second quarter, even after repaying the the $10,000,000,000 TARP loans to the Treasury definitely raises the ire of the common folk. Even I, as rational as I try to be, immediately threw up the moniker "Goldman Sucks" after parsing the news. No matter how you slice it, it just doesn't smell right.
Why is Goldman now considered the strongest bank in the United States? Could it be that the former Treasury Secretary, Henry Paulson, Jr was previously the Chairman and CEO of Goldman Sachs? Wasn't it Paulson who designed the $700,000,0o0,000 TARP plan and urgently shoved it down Bush's and Congress' throat - Bail out the financial industry or the United States economy would collapse? Didn't AIG funnel Goldman some $12,000,000,000+ out of the $167,000,000,000 in bailout funds it received? I guess Goldman paid back the Taxpayers with Taxpayer dollars while we wait for AIG to repay those funds, if ever. How is that for financial engineering? Also, in this whole conflict of interest financial conflagration Goldman became a bank allowing it to borrow billions from the Federal Reserve at 0%. Has it repaid these funds? How much did it value its toxic assets with the suspension of the mark-to-market accounting rule? I guess I'll just value my house at $1,000,000 because I say it is. Oh look I am rich.
Certainly there must be positive elements in all of this manuevering but it will be a stretch to get me to acknowledge or accept them.
Showing posts with label AIG.. Show all posts
Showing posts with label AIG.. Show all posts
Tuesday, July 14, 2009
Monday, June 1, 2009
GM Bankruptcy: Par for the Course
So GM is dead-ish and the market did not raise an eyebrow. One of the largest manufacturing companies in the United States is being shepherded through a structured bankruptcy on the taxpayer's dime to the tune of $50,000,000,000, not including the $19,000,000,000 it has already received, and the market rallied several hundred points apparently overjoyed over other unrelated positive, though flimsy, economic data. Apparently investors felt that the GM thing was expected and already priced in so no big deal. Par for the course.
In the course of less than a year, another industry giant has been transferred to the taxpayer dole, let us not forget AIG, Fannie Mae, Freddie Mac and the dizzying array of financial firms that are now majority owned or significantly owned by the American Government. Smacks of that "S" word, doesn't it. Yech! Actually, I don't see any problem with socialism, we are trying to save America in this global economy, aren't we? Though it does look bad that the government of the country that is/was the economic powerhouse of the world is bailing out the firms that underwrote its superiority. Furthermore, this government is as bankrupt as they come. If the American government was a company, it would have sought chapter 11 a long time a go.
Why is the financial sanctity of this country so reputable when it has not been able to balance its books in nearly a decade? Now this government sits on the brink of skyrocketing legacy costs and it cannot negotiate any settlement. Sounds a lot like GM. The perceived strength of the US government lays upon its solid revenue source - the American taxpayer - but it cannot sell the prospect of higher taxes or reduction in services to the representative body of this bunch; it is considered political suicide. It has the largest military in the world and so cocoons its weakening financial condition with weapons. We are democratic, we are free, we are safe, we are broke.
But, we are saving GM and the rest of the funky bunch but the amount given to GM and Chrysler, which I still cannot understand why Chrysler is being sold to a foreign automaker but whatever, is still a drop in the bucket compared to what has been given to AIG and the financials. Now Wall Street is happy and the market is rallying while they criticize the President for spending too much money. How can anyone even mention free market in the same breath?
The government can save GM but at some point we will need to save the government. We will all have to pay a lot more taxes. Is there any other way?
In the course of less than a year, another industry giant has been transferred to the taxpayer dole, let us not forget AIG, Fannie Mae, Freddie Mac and the dizzying array of financial firms that are now majority owned or significantly owned by the American Government. Smacks of that "S" word, doesn't it. Yech! Actually, I don't see any problem with socialism, we are trying to save America in this global economy, aren't we? Though it does look bad that the government of the country that is/was the economic powerhouse of the world is bailing out the firms that underwrote its superiority. Furthermore, this government is as bankrupt as they come. If the American government was a company, it would have sought chapter 11 a long time a go.
Why is the financial sanctity of this country so reputable when it has not been able to balance its books in nearly a decade? Now this government sits on the brink of skyrocketing legacy costs and it cannot negotiate any settlement. Sounds a lot like GM. The perceived strength of the US government lays upon its solid revenue source - the American taxpayer - but it cannot sell the prospect of higher taxes or reduction in services to the representative body of this bunch; it is considered political suicide. It has the largest military in the world and so cocoons its weakening financial condition with weapons. We are democratic, we are free, we are safe, we are broke.
But, we are saving GM and the rest of the funky bunch but the amount given to GM and Chrysler, which I still cannot understand why Chrysler is being sold to a foreign automaker but whatever, is still a drop in the bucket compared to what has been given to AIG and the financials. Now Wall Street is happy and the market is rallying while they criticize the President for spending too much money. How can anyone even mention free market in the same breath?
The government can save GM but at some point we will need to save the government. We will all have to pay a lot more taxes. Is there any other way?
Tuesday, March 17, 2009
Greed
Well if you want to see greed in action, it is out on the street for everyone to witness. AIG has come to embody the greed in its most naked form, pure and unadulterated. They symbolize all that is wrong with the bailouts as they continue to lavish bonuses and perks upon themselves after taking taxpayer dollars.
The conspiracy theorists must be having a field day. Hank Paulson effectively took our tax dollars and funneled them to his buddies on Wall Street with little or no oversight. They made us look like fools; we handed them trillions to help them remain solvent but instead they kept their same behavior and rewarded themselves, so locked in their greed, that they have exercised no conscience.
Can we trust anyone to do the right thing with our money? Now What?
The conspiracy theorists must be having a field day. Hank Paulson effectively took our tax dollars and funneled them to his buddies on Wall Street with little or no oversight. They made us look like fools; we handed them trillions to help them remain solvent but instead they kept their same behavior and rewarded themselves, so locked in their greed, that they have exercised no conscience.
Can we trust anyone to do the right thing with our money? Now What?
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