Goldman Sachs’ best year?
A reader pointed me to this story in The Guardian citing Goldman insiders saying this could be the investment bank’s most profitable year ever.
Staff in London were briefed last week on the banking and securities company’s prospects and told they could look forward to bumper bonuses if, as predicted, it completed its most profitable year ever. Figures next month detailing the firm’s second-quarter earnings are expected to show a further jump in profits.
I appreciate the even-handedness, but c’mon. Hank Paulson, as CEO of GS, lobbies congress to relax leverage restrictions on i banks in 2002, fails, tries again in 2004 and succeeds.
Four years later, the same man is put in charge of rescuing the financial system from a (surprise!) meltdown. He allows Bear and Lehman to fail, but then is instrumental in pushing through the illegal bailout of AIG, without which GS is a smoking crater. (Yeah, yeah. Sure they were hedged. I’m sure there was no counter party risk there…)
The only thing that surprises me here is that GS isn’t hiding this story. I have always figured that their PR-savvy was better than that. OTOH, maybe they think that they can get away with whatever they want and that this will help them snag the best employees of the few competitors they have left.
Here’s a thought-provoking piece by Rolling Stone magazine (upcoming July 2009 edition) on, quote:
From tech stocks to high gas prices, Goldman Sachs has engineered every majormarket manipulation since the Great Depression — and they’re about to do it again