I fully understand how they made their money, have no problems with that. What l have issues with is a permanent government guarantee and access to funds. Its the Mafia style with which everything is being done that concerns us. Another classic example is Deutsche Bank and the German government, why you think BaFin extended short selling ban till January 2010. Again log onto your Capital IQ account and look at their Tier III assests. P.S. Bull markets do not start with 100% rallies in Zombie companies
To my knowledge currently no other investment bank other than GS runs a full fledged tanker fleet. Some other banks do take physical delivery and pay for storage. But there are technicalities that make this a subpar solution to buying oil outright and delivering it to where storage becomes scarcer than at other locations. One example: Superior information about storage capacities. I could elaborate....but I am now curious if you know of another bank that runs tankers then please let me know I am happy to stand corrected. About your other points: Last time I checked it was politicians who decided to bail out banks and AIG. Last time I checked there was not a single politician who challenged in court the swap deals between AIG and GS (though many voiced their outrage). Would you think anyone would have loved to challenge GS if there was any merit? You bet. Its crap to compare GS's actions with selling drugs. What GS has done was in line with the law. Selling prescription drugs that are FDA approved is in line with the law. Selling illegal drugs is not. You love the benefits of a capitalist system yet you dont want to bear the fact that it weeds out the weak. Why dont you move to France then you get the best of both worlds ;-)
now its a government/gs mafia. Any other conspiracy theories? Lol, you also challenge that men landed on the moon? GS is well connected and thats good for GS and less good for its competitors. If you feel ill represented in Washington D.C. why dont you make use of your right to vote for the right guy then? Maybe there will be an anti-GS party forming before the next elections. Dude, argue as long as you want but government is still elected through a democratic process. If you even challange this maybe its time for a revolution? Or could it all be that some of you are actually anti-semitic but dont want to look stupid so rather than blaming it on the Jews GS seems a much better target?
Naaah, l am in London, could not care less what happens in USA, just an observer. Also got no problems with Jews, as a black dude have even date 3 Jewish girls. In fact in my younger days even used RediPlus. I enjoy interacting with sharp people, but do not like Old Boys Club style capitalism, especially after what happened. Actually my favourite research is from Danske Bank and Goldman Sachs. P.S. Question, do Bull Markets start with 100% rallies in Zombie Companies ?
As I mentioned, Phibro, which is a unit of Citi, is doing something very similar. JP just entered this space, as well, so they're not quite up to Goldman's level. There's a basic flaw with all your arguments. The debate about Goldman and the bailouts is about the long-term costs/benefits that institutions like GS assess/contribute to society. You're attempting to morph the debate into the discussion of the present, short-run costs/benefits, as determined by the current legal system. The two are orthogonal and should not be confused. One is about ethics and, I grant you, is a bit vague/philosophical. The other is cut and dry, which is something you keep pointing out, but has nothing to do with Krugman's article in question and my analogy. So, please, if you want to discuss the original article, please do address the original question. How does the presence of Goldman contribute to society, in the longer term?
Without the bailout Goldman would probably be worth a fraction of what it is now. They would have sacked a lot of people. Most of the bankers would be out of a job, shareholders would have been pretty much wiped out . Accordingly GS shareholders and employees and those of most of the other banks should give back their profit and employees should be taxed at 100% above 100K. The world needs a special tax on bankers. They wouldn't even be in business right now if the govt hadn'saved their ass with the AIG bailout, fed fund at 0, the discount window and the TARP. No banker should be making big money for the next 1000 years.
And all consumers taking on ( subprime ) mortgage loans shall pay back EVERY US cent of money they agreed to pay to their lenders !!!! Ooppsss...if this would have happened, we wouldn´t be in this mess. Ay, ay, ay...
Great article BuyLoSellHi, thanks for posting it. It seems that many people still do not comprehend, or do not want to comprehend, the value of reasonable and wise regulation in a free market economy. What happened in our financial markets is analagous to taking away traffic lights from a major road intersection. Yes, it is great fun to not have to stop for those annoying red lights. Yes, very often eveyone will save a little bit of time by dashing through the intersection between opposing traffic. But in the long run, accidents and the damage and death that result will hurt EVERYONE far more than any advantage gained by eliminating traffic regulation. It is in the best interest of the community at large, and ultimately best for the regulated, to provide reasonable and wise regulation of traffic . . . and of financial markets.
I would not be worried about the consumers. They, and their kids, will pay it back to the hilt in the next 50 years. As for GS, they did not do anything illegal indeed, but they sure profited by all the government bailouts and guarantees, and they made sure are well positioned to collect every cent.
Good job 'keeping your eye on the ball', Truckload. - This is the salient point. Unfortunatly, the problem enters in with "Power corrupts".