Goldman Sachs announced record quarterly profits while their competitors struggle. Are They Really That Good?
Long the Wall Street firm everyone loves to hate, Goldman saw the brickbats rain down last week after it posted blowout second-quarter results and set aside a record amount for compensation. Even the arch-conservative Wall Street Journal editorial page joined the attacks.I smell crony crapitolism*
Sure, they paid the money back, but how much did they benefit from government picking winners (Goldman, AIG) and Losers (Bear, Lehman Brothers), propping up the entire system, keeping it from collapsing upon their gold-plated ears? We will probably never know just how much they benefited from cosying up to Uncle Sam and having double agents inside our government.
I hear echos of Bernie Madoff
For starters, most folks aren’t quite sure how Goldman manages to make prodigious amounts of money. That leads to a feeling the firm must either be taking huge risks, or unduly benefiting from its extensive government connections.
Goldman hasn’t done a good job dispelling such notions and it sometimes makes matters worse. The firm has failed to adequately explain its trading relationship with American International Group Inc. and give a clear sense of whether and how it benefited from the massive bailout of the insurance giant.Remember what everyone was saying after the Madoff house of cards collapsed? It was too good to be true, they should have known something was wrong... Goldman is way outperforming the market. Something is fishy.
Good thing they've bought Obama and the Democrats with lavish campaign contributions. Results like this would ordinarily bring government regulators knocking at their door.
* Yes, I know how to spell. Phony capitalism + The DC Capitol = Crapitolism
Bloomberg
