Saturday, October 24, 2009

The Goldman Bonuses

Goldman Sachs is paying big bonuses again. At the risk of setting off one of my loyal readers I'll point to some comments on it...

Judge Richard Posner wrote about The Goldman Sachs Bonuses, twice. He starts with "Without government aid then, no $20 billion-plus in bonuses for Goldman Sachs's employees in 2009? Maybe zero in bonuses, maybe indeed, no Goldman Sachs at all. Against that background, the bonuses seem egregious." and then it gets much more interesting. It's worth reading both parts.

A GS advisor said "“We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all”. Mark Thoma in What's Good for Goldman Sachs is Good for Everyone? adds sarcastically, "A defense of inequality and trickle down in one statement. That's a political winner." Think Progress has a little more.

And just how are JPMorgan Chase and Goldman Sachs making so much money in this economy? Philip Greenspun explains: "Because of the Collapse of 2008 financial reforms, the big investment banks are able to borrow money from the U.S. government at 0 percent interest. Then they can turn around and buy short-term [Treasury] bonds that pay 2 or 3 percent annual interest. Now they’re making 2 percent on whatever they borrowed. They can use leverage to increase this number, by pledging some of the bonds that they’ve already bought as collateral on additional bonds...So the money is just being shuffled from one Federal bank account to another, with each Wall Street bank skimming off $1 billion per month for itself."

And if that's not enough to piss you off (considering that they still aren't lending), here's a pretty graphic describing the golden parachutes the bankers got.

1 comment:

Anonymous said...

I'm not set off at all.

Please read one of the comments to the Greespun piece (see Anonymous October 17, 2009 @ 10:14 pm).

It wasn't me I promise; but it pretty much sums up my thinking on the subject.