How You Finance Goldman Sachs’ Profits: old GS managing director speaks out.

Discussion in 'Economics' started by Debaser82, Jul 30, 2009.

  1. This is perhaps the most important thing I learned over my years working on Wall Street, including as a managing director at Goldman Sachs: Numbers lie. In a normal time, the fact that the numbers generated by the nation's biggest banks can't be trusted might not matter very much to the rest of us. But since the record bank profits we're now hearing about are essentially created by massive federal funding, perhaps it behooves us to dig beneath their data. On July 27, 10 congressmen, led by Rep. Alan Grayson (D-Fla.), did just that, writing a letter to Federal Reserve Chairman Ben Bernanke questioning the Fed's role in Goldman's rapid return to the top of Wall Street.’-profits
  2. Of course it's all a lie. Corporate executives are professional liars just like politicians, only worse. We are lied to all the time. Lying is wrong only for the average citizen.
  3. In case you didn't realize, this isn't the ignorant socialist hippie forums. Post that shit where someone actually cares.
  4. You have to wonder why these articles keep getting leaked.

    Perhaps we are being set up for the next leg down?

    Thanks for the post.
  5. If you haven't yet realized the truth of my statement then you are the ignorant and probably just another dope about to get a reality check
  6. I juts dropped GS an email asking for comment...I like to hear Lucas van Prag's comments...LOL ! :D
  7. In my view, there's actual logic the authorities are adhering to behind the madness...

    I can imagine that the powers that be have said to themselves: "Our primary short-term concern is to recapitalize the banking system somehow. We don't really care how it's done, as long as it's done. Once this happens and the immediate danger has passed, we will look closely at various regulatory issues, such as incentives, risk budgeting, 'too big to fail', etc." The first step of the process, i.e. the US taxpayer recapitalizing the US banks, is what's behind the bank revenues.

    Obviously, these measures are all about the capital needed by JPMs, BACs and Cs of the world (now, unlike in Oct08 when they let GS become a hold co, they couldn't care less about GS), but you either do them all or none, so GS sees the benefits.

    However, I do see a fundamental flaw in the logic. In order to be able to reform and re-regulate the system, you need to have the necessary leverage. This leverage is present when the banks are on their knees begging for capital. When they're flush with cash that they know will be difficult to pry out of their greedy little hands, reform and better regulation becomes well-nigh impossible. I believe this is exactly what we have occurring at the moment.
  8. Exactly - you tame the beast when it's weak. Too late now for meaningful regulation. The irony is the banks are using the government's largesse (tax base) to buy the Congress, actually, the entire government.

    And I don't see Obama using his bully pulpit like TR did to rally the population against the trusts. His community organizer background - which many on the right decry - is actually missing on the most important issue of the day. He's no community organizer yet people get distracted by it all the same.
  9. Or... you could stop complaining about them and buy their stock ffs

    Why don't you do that?
  10. poyayan


    Ah... So, you can take the best of both sides. (investment bank and a regular bank)

    Come again? What's the reason of separating investment banks and regular banks?

    GS really need to die, broken up.

    Essential it is a giant margin account with no limit and 0% margin interest rate.
    #10     Jul 30, 2009