Goldman Sachs breaks record with $16.7bn bonus pot
This would be the ‘looting’ referred to in Atlas Shrugged. There’s a great interview posted today on Democracy Now that illustrates how this is all based on fraud. You could also look into Goldman Sach’s history of creating and collapsing bubbles throughout the 20th century through leveraging for their own profit. Back in the day, people used to know that centralizing banking power was dangerous – hence all those ‘Monopoly’ guy type caricatures in 19th century political cartoons. There’ve been multiple instances in the US where the connections between banks and the state had to be broken – this constitutes one of the major threads of American history that most people these days are unaware of. Andrew Jackson made it his mission to break the central bank. Do we have the courage of ‘Old Ironsides’? For an excellent (and exhaustive) documentary on these matters, see The Money Masters.
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Andrew Clark, The Guardian
October 15, 2009
Firm’s employees could get average sum of £430,000, payouts come one year after bank took bailout cash
Put the bottles of Krug on ice. Golden days are here again for elite investment banks. Goldman Sachs is gearing up to pay its biggest ever bonuses to its 31,700 employees after raking in profits at a rate of $35m (£21.5m) a day, in the clearest signal yet that the Square Mile and Wall Street are returning to their old ways of money-making prosperity.
Just weeks after the leaders of the G20 countries called for restraint in financial industry pay to avert “unacceptable risk-taking,” Goldman’s astute trading on resurgent financial markets yielded an almost 300% rise in quarterly profits to $3.19bn.
Under the US firm’s policy of setting aside nearly half of its revenue to pay its staff, a remuneration fund for employees has reached $16.7bn for the year to date — amounting to $527,000 (£323,000) per person.
Barring a sudden slump in business in the final months of the year, Goldman’s bankers, including 5,500 staff at its London office on Fleet Street, can look forward to an average year-end payout of more than $700,000 (£430,000) each, which would be the highest figure in the firm’s 140-year history.
The numbers followed similarly booming results a day earlier from the rival US bank JP Morgan Chase, and together Wall Street banks are forecast to pay out a record $140bn in bonuses this year.
The prospect of a bonus bonanza is causing alarm in political circles, sparking concern about a chasm in fortunes between high finance and the high street. Certain top banks have bounced back remarkably swiftly from the worst recession since the Great Depression of the 1930s. Yet for consumers on both sides of the Atlantic, unemployment continues to surge, home repossessions are rising and shops are falling victim to tepid sales.
The Liberal Democrat treasury spokesman, Vince Cable, pointed out that Goldman’s payouts will come little more than a year after the bank accepted $10bn in emergency funds from the US treasury under a bailout plan.
“It is farcical that so soon after the reckless greed of bankers brought the world economy to its knees, we are seeing a return to business as usual,” said Cable. “Bankers should spare a thought for taxpayers who bailed out the system, some of whom no longer have jobs.”
In a nod to calls for greater community responsibility, Goldman is putting $200m into a charitable foundation aimed at supporting educational initiatives around the world and the bank pointed out that it and its staff will contribute £2bn to Britain’s public coffers through taxation and National Insurance this year.
Goldman’s chief financial officer, David Viniar, accepted that Goldman was treading a delicate line: “We’re very aware of what’s going on in the world, but we have to trade that off with being fair to our people who, we believe, have performed admirably throughout this crisis.”
Viniar said Goldman faces vigorous competition in attracting promising talent: “Our competitors are very good, our competitors are paying people very well and they’re willing to hire people with guaranteed bonuses.”
The investment banks’ rapid return to health has been driven, in part, by an upward surge in the stockmarket. [Ed. Note: As the dollar falls, stocks appear to be worth more in dollar units. Duh] Investors are enjoying a renewed sense of long-term optimism, feeling confident that the recent downturn has proven to be a recession, rather than an epochal depression. On Wall Street, the leading stock market indicator, the Dow Jones Industrial Average this week powered through 10,000 points for the first time in 12 months, prompting traders on the floor of the New York Stock Exchange to don celebratory baseball caps trumpeting “Dow 10,000″.
Furthermore, the demise of weaker banks has taken the edge off cut-throat competition in investment banking, giving survivors more breathing space. The issuance of billions of dollars in public borrowing has made the secondary debt markets a lucrative area for traders. And an implicit government guarantee that banks are “too big to fail” has shored up confidence.
“Their competitors have gone out of business, so they can make more money,” said Stephen Lerner, a campaigner on financial issues for the US Service Employees International Union. “It’s a combination of absurd and obscene that the same guys who crashed the economy and got bailed out by taxpayers are now giving themselves even bigger bonuses than before they crashed the economy.”
Not everybody is faring well. The US bank Citigroup produced weaker figures. It made a modest quarterly profit of $101m, against a loss of $2.81bn for the same period in 2008. Citigroup is one third owned by the US treasury and has been crippled by bad loans and delinquent mortgages — it revealed credit losses of $8bn for the past three months alone.
Banks with a big presence on the high street continue to face big liabilities. Barclays and HSBC revealed substantial increases in bad consumer debts in the first half of the year. In the US this year, 98 regional high street banks have collapsed, requiring the authorities to seize control of and guarantee customers’ deposits.
“Are we out of the woods yet?” asked Gerard Cassidy, a banking analyst at RBC Capital Markets. “No, but we can see the light at the edge and we’re heading towards it. Nine months ago, you couldn’t see any light at all.”
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October 19th, 2009 at 8:19 pm
Our financial model is not sustainable. Let me explain. Imagine there is no money in circulation so the bank issues the very first money in the world, lets say the amount is $100 and that’s all that exists on earth. Now the bank wants that full amount back in one year plus 10 percent interest so the bank wants back $110. See the dilema? There is only $100 in circulation but to complete this transaction and pay the bank back is impossible unless another $10 dollars is created to pay off the interest. So they keep printing more and more money. It could even be said all credit is debt. Allan Brennan, the manager of economic analysis and forecasting with the Alberta government’s Department of Infrastructure and Transportation, recently said “Debt is 470 per cent of the current economy, and the last time things were bad, in 1979, it was 300 per cent. We are probably beyond the point where that debt can ever be saved. This is a solvency crisis, not a liquidity crisis.”
October 19th, 2009 at 8:24 pm
There is in fact a shortage of real money in circulation. It’s no wonder the world is in so much trouble. The TD bank is predicting a big jump in Bankruptcies this year. There were 10,578 personal bankruptcies filed during March of this year, up a staggering 57% from 6,736 in March 2008. Banks run this country and our elected members in office are just front men for the bankers. The USELESS regulations FLAHERTY passed to curb credit card interest rates are a classic example of how politicians whimp out and cower in fear when having to face greedy financial institutions. We regular Canadians don’t really believe Globalization is helping. The track record certainly says otherwise. Free trade has only helped to pad the pockets of the rich. Our leaders have to say what the World Bank tells them to say. The global recession is going to last longer than a year or two. High interest rates and money supply are the reason the cycle starts. Banks tightnen the money supply and we go into a recession. Then they loosen the money supply and we go into a boom. It’s also known as the boom bust cycle. Each time we enter recession the rich feast off the spoils.
October 20th, 2009 at 7:12 pm
The Taxpayers Money, Goldman Sachs Record Bonuses…
While you were day dreaming of a romantic trip with the balloon boy, Goldman Sachs announced record profits of $3.2 billion, “crushing Wall Street estimates for the third straight quarter.” Alas, the record profits and “the giant quar…
October 21st, 2009 at 7:22 pm
The hoax of the hoax is Wolf Blitzer covering balloon boy instead of Goldman Sachs bailout hoax.
Really, mainstream media is easy to get had! Corporatism is keeping them so dumb, anybody could do better.
What we have, and what the media should talk about, is a bank bubble that will burst as soon as the other great nations agree to dump the Dollar in their oil transactions.
That will have lots of entertainment value.
November 3rd, 2009 at 1:13 am
[...] Goldman Sachs breaks record with $16.7bn bonus pot | More US Bank Failures and The Coming Deposit Insurance Bailout | Arrest Over Software Illuminates [...]
November 5th, 2009 at 8:01 am
[...] more than expected | Nortel employees to lose pensions, Liberals vow change to bankruptcy laws | Goldman Sachs breaks record with $16.7bn bonus pot | Loonie continues race toward parity with U.S. dollar | Dollar Reaches Breaking Point as Central [...]
November 8th, 2009 at 2:16 am
[...] more than expected | Nortel employees to lose pensions, Liberals vow change to bankruptcy laws | Goldman Sachs breaks record with $16.7bn bonus pot | Loonie continues race toward parity with U.S. dollar | Dollar Reaches Breaking Point as Central [...]
December 14th, 2009 at 10:15 pm
[...] more than expected | Nortel employees to lose pensions, Liberals vow change to bankruptcy laws | Goldman Sachs breaks record with $16.7bn bonus pot | Loonie continues race toward parity with U.S. dollar | Dollar Reaches Breaking Point as Central [...]
December 14th, 2009 at 11:44 pm
[...] more than expected | Nortel employees to lose pensions, Liberals vow change to bankruptcy laws | Goldman Sachs breaks record with $16.7bn bonus pot | Loonie continues race toward parity with U.S. dollar | Dollar Reaches Breaking Point as Central [...]
December 31st, 2009 at 1:34 pm
[...] more than expected | Nortel employees to lose pensions, Liberals vow change to bankruptcy laws | Goldman Sachs breaks record with $16.7bn bonus pot | Loonie continues race toward parity with U.S. dollar | Dollar Reaches Breaking Point as Central [...]
February 21st, 2010 at 4:24 am
[...] more layoffs are in store, manufacturers say | How Goldman secretly bet on the U.S. housing crash | Goldman Sachs breaks record with $16.7bn bonus pot | U.S. unemployment claims spike | Unemployed to reach postwar high: OECD | More US Bank Failures [...]
February 27th, 2010 at 10:01 am
[...] deeper into depression as Wall Street revels | How Goldman secretly bet on the U.S. housing crash | Goldman Sachs breaks record with $16.7bn bonus pot | More US Bank Failures and The Coming Deposit Insurance Bailout | Arrest Over Software Illuminates [...]
March 5th, 2010 at 5:27 pm
[...] more layoffs are in store, manufacturers say | How Goldman secretly bet on the U.S. housing crash | Goldman Sachs breaks record with $16.7bn bonus pot | U.S. unemployment claims spike | Unemployed to reach postwar high: OECD | More US Bank Failures [...]
March 13th, 2010 at 2:38 pm
[...] deeper into depression as Wall Street revels | How Goldman secretly bet on the U.S. housing crash | Goldman Sachs breaks record with $16.7bn bonus pot | More US Bank Failures and The Coming Deposit Insurance Bailout | Arrest Over Software Illuminates [...]
May 1st, 2010 at 10:52 am
[...] deeper into depression as Wall Street revels | How Goldman secretly bet on the U.S. housing crash | Goldman Sachs breaks record with $16.7bn bonus pot | More US Bank Failures and The Coming Deposit Insurance Bailout | Arrest Over Software Illuminates [...]