Goldman Sachs Would Like to Pay Back TARP Money

[Lucky Luciano]

Source: Bloomberg

By Christine Harper

Feb. 4 (Bloomberg) -- Goldman Sachs Group Inc., which took $10 billion from the U.S. Treasury in October, would like to pay back the money from the so-called Troubled Asset Relief Program, or TARP, said David Viniar, the firm’s chief financial officer.

“It would send a very good signal” if the firm could repay the money, he said. The firm would only do so if it got “the blessing” of the Treasury and Federal Reserve, he said at a Credit Suisse conference in Naples, Florida today.

Under current rules, Goldman and other firms that received money under TARP are required to raise common or preferred equity to replace the government funds, Viniar said. The company will consider raising money “if the markets are good,” he said.

The government investment “is not really restricting the way we do business,” Viniar said.

Goldman will also be “very cautious” about considering any acquisitions because there’s a longer record of unsuccessful deals in the financial services industry than successful ones, Viniar said. He said the firm is likely to maintain its current business of focusing on corporate and institutional clients rather than entering the retail business.



Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=a3xTcf52kEZM&refer=home

---

Note that this coincides with the prez saying that those firms taking substantial TARP money will have pay capped at $500K.

[Why Syzygy]

1. yee-haw!

But. What is their definition of "blessing". No perks in exchange. That's the same as receiving compensation.

[Beavker]

2. I suppose that would be okay.

We'll take it plus interest for the time you held the funds from TARP. That's basically what we were looking for anyway. A return on the investment.

[roguevalley]

29. they are scared. I also hope they have to pay taxes on it, the wankers.

[marketcrazy1]

3. LOL!!!! what bullshit!!!

I would like to win the mega lottery,, not likely to happen any time soon, same with GS paying back TARP "loans"!!! what a fucking joke!!!

[dbonds]

4. Probably because of the new pay cap restrictions.

[hugo_from_TN]

28. Nope

The cap on executive pay applies only to new money being given out. Not the money that Goldman already has.

"The pay cap would apply to institutions that negotiate agreements with the Treasury Department for "exceptional assistance" in the future. The restriction would not apply to such firms as American International Group Inc., Bank of America Corp., and Citigroup Inc., that already have received such help."

[Donnachaidh]

5. how about tacking on a 30% interest charge to start?

Let Goldman Sachs pay what the same double digit charges the Congress allows the banks to charge on credit cards. And then we can add charges for the weeks they had the money, and a re-stocking charge, and a charge to make out the transfer papers, and a charge for reading the request for a bailout...

I'm sure we can add quite a few more.

[marketcrazy1]

6. they have not finnished TAKING money yet!!

this guy is FOS!! it`s like me saying I would like to pay off my mortgage tomorrow, sure i would like to but i KNOW i can`t...

[Donnachaidh]

7. someone at G/S will pull the money out of their ass to pay it

Do you REALLY think they are going to allow the government to put ceiling caps on THEIR salaries? They can cut the little guy's wages in half, but don't TOUCH my f*cking Benz money! :sarcasm:

[Lucky Luciano]

8. Bingo!

GS does not need the money as much now that the Fed has implemented their commercial paper buying program. By doing so, it solved GS's biggest problem - short term liquidity that dried up (and is crucial to their business) after Lehman filed. GS can only live when short term funding is available - now that it is available, they do not need TARP anymore.

[Bake]

11. To which I say, GOOD! Pay it back.

Same with the other banks, too. Pay the money back. When you're not on the taxpayer welfare dole, you can pay your "execs" (i.e., rich idiots) as much as you want to. But not with MY dime ...

Bake

[marketcrazy1]

14. what about the shitload

of "illiquid" zero value "assets" they have hidden in level 3!!! I guess when the tax payer is Finnished buying them for ten times their market value they may have enough of OUR money avaiable to pay us back!!!

[Lucky Luciano]

16. Yes, GS does have a lot of Level III assets.

I am not sure if they are worthless - but I do know that I have no idea what they are worth. As such, I would not invest in GS due to the opaqueness.

[robinlynne]

25. you don't need the sarcasm thingie. it's aboslutely true!

[pnorman]

27. That would be a hoot!

The US Government going into the Predatory Lending bid'ness!

pnorman

[Scooter24]

32. Illegal since all contracts have been signed...

The government could tell GS no, but then how would that look to the public?

"Goldman Sachs wants to pay back loaned taxpayer money but Government says no."

This will be a closed deal in a month or two. And as a GS account holder, I'm quite happy that they are doing so.

[acmavm]

9. What am I missing? They want to pay us back with more money

that they get from us?

[Lucky Luciano]

10. By paying back the money it would remove restrictions on executive compensation

that Obama proposed today.

[acmavm]

13. I got that part. The part I'm mixed up on is that they want to use

money from the government to pay off the other money from the government?

[Lucky Luciano]

15. The commercial paper program has been implemented long enough

so that GS does not need to sell its CP to the Fed. They can sell it to money market funds now with confidence - at least that is what I would interpret this as.

[Scooter24]

31. It's already known that those businesses that already took TARP money

are not included in this new pay cap unless they were to receive more money from the Government. Wells Fargo has been trying to pay back their funds and now it looks like Goldman Sachs is as well. Both are financially the strongest.

[peacetalksforall]

12. Goldman Sachs - the firm that facilitated Republican shenanigans. Had a hand extended

and jerked it back. They found some money in a box in a corner of a desk?

There are plenty of Dems beholden' to Goldman-Sachs as well.

Please read:
http://bartblog.bartcop.com/2008/11/21/credit-crisisiraq-paulsoncheney-goldman-sachshalliburton/

The post was from Nov 2008 = just before the bail-out.

[haele]

17. Well, they've already collected the interest on the money, so

they'll still probably come up a couple million ahead. Heck, they've probably used that interest to pay for all their excessive CEO perks, rather than something rational like, say, some of their debt...

Haele

[mulsh]

18. good PR with out actually doing anything.

what a bunch of shit. why don't they announce they have set aside they funds the received and are prepared to re-imburse the Treasury? this smacks of some pretty smart group of flacks telling the over rated MBA drone what to say at some corp retreat in Florida.

[GinaMaria]

19. Good. Let's use our money to create jobs.

[On the Road]

20. This is Indeed the Issue

When Paulsen said that he had to convince some of the recipients to take the money, I'm sure Goldman was one of them.

You can only impose harsh conditions on firms that are about to fail. Those that have other options will take them, whether for good reasons or bad ones like executive pay.

[spanone]

21. good, let's include about 25% interest like they do their customers

[Lucky Luciano]

22. Not aware of GS being involved in the credit card business.

[No Elephants]

23. Amazing what talk of a compensation cap does, isn't it? If they can raise $10 billion, why did they

take taxpayer money to begin with? Something smells BAD.

[Lucky Luciano]

24. They took $10B when it would have been much harder to sell

their own common stock to raise the money. Remember this was shortly after Lehman filed. They did raise money at that time from the public and from Warren Buffet, but raising more would have been hard - now they could do it since things have stabilized a bit for now and volatility is lower (though still very high - down moves are about 2-3% per day instead of 5-6% which is totally nuts).

[robinlynne]

26. because their man was the secretary of the treasury who invented the TRAP, that's why!

[FarCenter]

30. Goldman Sachs didn't want the TARP money in the first place

Neither did JP Morgan Chase, Bank of America and Wells Fargo.

The Treasury and Federal Reserve made those institutions take it because they didn't want to expose Citigroup, Morgan Stanley, Merrill Lynch, and Wachovia as the insolvent institutions. The strategy was that they were pretending not to choose winners and losers.

Since then, the JP Morgan Chase merger with WaMu, Bank of America with Merrill Lynch, and Wells Fargo with Wachovia have impaired those banks to the point where they probably have to keep the money for the time being.

Goldman Sachs is likely in a position to give it back. JP Morgan Chase might be able to. However, the deal committed them to keeping the money for 3 years. So any of them has to get permission in order to repay it.

[Fire1]

33. Talk about, 'transparent!'