Despite Bailouts, Business as Usual at Goldman

[groovedaddy]

Lloyd C. Blankfein has a story about the cataclysm that nearly brought down all of Wall Street. It goes something like this: One by one, lesser banks were swept away by the financial storm of 2008. And as the floodwaters rose, no one, not even Goldman Sachs, seemed safe.

The question, in Mr. Blankfein’s eyes, was how high the water would rise. But Washington stepped in with all those bailouts before the surge reached Goldman.

The story, which was recounted by several friends and colleagues, represents a sobering private admission from Mr. Blankfein, Goldman’s chief executive.

Publicly, it is a different story. Now that Goldman is minting money again, the bank insists that it was never in any real danger. Mr. Blankfein, in an e-mail message this week, disputed his private account, saying Goldman’s survival was never in doubt. Other Goldman executives reject the notion that the bank was rescued at all.

“We did not have a near-death experience,” said Gary D. Cohn, Goldman’s president. The government saved the financial industry as a whole, but it did not save Goldman Sachs, he said.

http://www.nytimes.com/2009/08/06/business/06goldman.html?th&emc=th

[vincna]

1. As I recall, Goldman never wanted the TARP money - nt

[notesdev]

4. Yeah right

Goldman: "Don't throw me into the money patch!"

Goldman may very well have gone under without the timely infusion of TARP cash and the AIG bailout.

[vincna]

5. Paulson forced the banks to take the money

See attached link: http://www.cnbc.com/id/30745687.

Got anything other than speculation?

[notesdev]

6. I know he forced them to take the money

I also know he was CEO of Goldman Sachs from 2000-2005 and got a $200 mil tax break to become Secretary of the Treasury.

You really need a link for that?

If you want I can provide a link that explains why he forced them to take the money - so no one would know which banks were up shit's creek and which were only on the riverbank.

[vincna]

7. OK, we agree on the facts

What makes you so sure Goldman would have went under if they didn't get TARP money?

[notesdev]

8. Because the combined bailout cash they got

nearly exceeded their market capitalization, a valuation that was based on their bubble-era holdings maintaining bubble-era prices (Mark-to-Model).

It's possible, but unlikely they would have remained solvent absent direct government intervention. They certainly would not be pumping out record bonuses, that's for sure!

[vincna]

9. Explain "combined"

I thought the number was $10 Billion. Are you counting what AIG got and used to repay Goldman?

[notesdev]

10. Combined means all the special gifts

Including TARP, the AIG bailout, the other alphabet soup Fed programs, VaR exemption, etc.

One must ask why Goldman applied to become a bank holding company if they didn't want to be involved.

[MidwestTransplant]

2. Fucking liars. If AIG and the other counterparties to GS hadn't bailed out they would have

gone insolvent.

[Hawkowl]

3. Incredible hubris

Truly Goldfellas are the biggest thieves in the history of the world.

This guy says it best:

http://www.youtube.com/watch?v=VSwWy4E6I04&feature=related