July 14, 2009 2:10 PM
Goldman Sachs had one of its biggest quarters ever by reaping the benefits of the Fed’s currently cheap discount window while still operating with hedge fund levels of risk. That doesn’t even take into consideration the profits they gained from the AIG bailout. From Rolfe Winkler’s blog:
In addition to the federal money it took last fall, it benefited from the government’s bailout of the American International Group, being paid 100 cents on the dollar for its $13 billion counterparty exposure to the insurer, and it has $28 billion in outstanding debt issued cheaply with the backing of the Federal Deposit Insurance Corporation.
They simply should not be allowed to continue doing this. Making record profits by trading with tax payer protection is not going to create the jobs that are needed for the economy. Gasparino has some remarks about the topic in the video below.
More on this topic
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Matt Taibbi: Goldman is "Re-creating the conditions for another crash"
(Wealth Daily, 2/18/10)
Volcker Rule Gives Goldman Easy Choice
(naked capitalism, 2/12/10)
Fed Used Lawyer that Advised Goldman on AIG (Non) Disclosures
(naked capitalism, 1/8/10)
Goldman Sachs' VIP List: Most Important Stocks For Hedge Funds
(market folly, 3/5/10)
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After former GS CEO Robert Rubin helped the push to axe the Glass-Steagall Act in 1999, Goldman grew by leaps and bounds.
The cat was let out of the bag in 2007 (before the meltdown) by GS’s CEO Lloyd Blankfein who said, ”we’ve come full circle because this is exactly what the Rothschilds or J.P. Morgan the banker were doing in their heyday. What caused an aberration was the Glass-Steagall Act.”