Today Goldman Sachs posted record profits.
Goldman Sachs Group Inc. posted record earnings as revenue from trading and stock underwriting reached all-time highs less than a year after the firm took $10 billion in U.S. rescue funds.
Second-quarter net income was $3.44 billion, or $4.93 a share, the New York-based bank said today in a statement. That surpassed the $3.65 per-share average estimate of 22 analysts surveyed by Bloomberg and was 65 percent higher than last year’s second quarter.
Oops, not so fast! Goldman is being blasted for using the same risky trading model that caused so many other firms to bring the economy to it's knees. Bloomberg:
Chief Executive Officer Lloyd Blankfein, after repaying the government’s bailout money along with $426 million in dividends to taxpayers, is reverting to a business model analysts deemed irretrievably broken during the global credit crisis. While rivals including Morgan Stanley have pared risks, Goldman Sachs has increased them this year.
Previously in something wicked, we noted the various smells originating from Goldman Sachs.
Now various others are noticing the stench.
Glenn Greenwald over on Salon.com goes through the history of the financial crisis with headlines ablazing on Goldman Sachs. One thing to remember, we have no idea who the Federal Reserve has given access to $2 trillion dollars worth of funds.
Goldman has had access to massive amounts of Fed lending in order to fuel its bulging profits.
Elliot Spitzer on Bloomberg TV about Goldman Sachs' blow out profits:
Note Elliot Spitzer mentions many topics on hidden subsidies we have covered here. Most notably the great credit default swap AIG Screw Job. Note Spitzer almost mentions Populist Rage and how unusual it is for Populist Rage to be objective, analytical clear! (Congratulations to all EP bloggers for keeping your heads with well cited and referenced rants!)
Meanwhile, Goldman is still depending on $28 billion in outstanding debt issued cheaply with the backing of the Federal Deposit Insurance Corporation. Which means you and I are still indirectly funding Goldman's high-risk operations.
So the fact that Goldman has reverted to its old ways in the market suggests it has every reason to believe it can revert to its old ways in politics, should its market strategies backfire once again -- leaving the rest of us once again to pick up the pieces.
Now what this $700 Million stock sales really implies ....
But what is one supposed to do when Goldman Sachs clearly has a revolving government door and pretty much can get whatever they want?
What was that about too big to fail?