Monday, June 22, 2009
Goldman Sachs has managed to double dip its way through the U.S. government’s efforts to help Wall Street and the national economy rebound from the financial crisis that struck last year. Not only has Goldman Sachs received federal bailout funds (it currently owes $10 billion to the treasury), but it is making huge profits off the sale of U.S. government bonds by the Treasury Department to finance the stimulus package. In brokering the sales of bonds overseas, Goldman Sachs has made so much money in the first half of 2009 that executives are preparing to give out the largest bonuses in the bank’s 140-year history.
Goldman Sachs isn’t the only financial institution doing extremely well from a surge in revenues from trading foreign currency, bonds and fixed-income products. So are JP Morgan, Morgan Stanley, Barclays Capital, Credit Suisse, and Deutsche Bank.
Some officials in London are not pleased by the news of the bonuses. Vince Cable, the Liberal Democrat treasury spokesman, told The Observer, “The investment banks more than any other institutions created the culture of excessive leverage, excessive risk and excessive bonuses that led to the downfall of the financial system. Now they are cashing in and the same bonus culture has returned. The result must be that we are being pushed to the edge of another crash.”
-Noel Brinkerhoff
Goldman to Make Record Bonus Payout (by Phillip Inman, The Observer)
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