Note: By coincidence, this post was written in International Waters a few miles off the coast of Grand Turks and Caicos. If Goldman Sachs wants to sue anyone over this, send your process server to the wreck of the B-29 bomber, off the north coast, approximately 80 feet below sea level . . .

~~~

Karl Denninger notes that a nasty rumor is circulating about Goldman Sachs amongst observers of the Street. Allegedly, GS is about to report their second-best quarter in history, +$12 billion or so…

In this era of finacial disasters, credit crisis, and recession, how is that possible?

Easy. You — and your grandkids — are the ones who paid for it:

“The fact that they (like so many others) are being paid by the taxpayer through AIG’s “conduit” for losses that didn’t (yet) happen at 100 cents on the dollar might be the basic math.

And further (and potentially much worse) there is the repeated statement by Goldman executives that they were “fully hedged” against a potential counterparty default by AIG. One wonders – was that “hedge” to be short the equity on AIG itself, perhaps?

Why is this important?

Because if that’s how Goldman hedged they got paid twice and the taxpayer literally got robbed. Someone in Congress needs to look into this now; there are already rumblings of investigation. Those rumblings need to get a lot louder and turn into subpoenas, not “polite inquiries.”

If in fact Goldman (or anyone else) was “hedged” against a possible credit loss from their CDS with AIG and they were able to collect on that hedge (no matter what it was) those payments through AIG need to be clawed back immediately as nobody is entitled to be paid twice for the same risk and reap what amounts to a windfall profit by quite literally engineering a multi-billion dollar transfer of funds from the Taxpayer to the firm!”

Makes you wonder if having a Treasury Secretary who was a former CEO of Goldman Sachs had anything to do with this.

Indeed, not only was Hank Paulson Goldie’s boy, but he was the same gentleman who so vociferously lobbied the SEC to allow the 5 largest iBanks to drop the net capital rule and leverage up 40 to 1.

So not only did he help set up the disaster, but he then oversaw the greatest transfer of wealth in the planets history — several trillion dollars from taxpayers to the management and shareholders of inept, incompetant, wildly irresponsible companies.

This is theft on the sort of grand scale thta calls for the population to revolt. Perhaps the French peasants were right; Time to bring the guillotine for executing nobles and bankers. . .

>

Source:
Goldman (and other banks’) “Hedges”
Karl Denninger
April 12. 2009

http://market-ticker.denninger.net/authors/2-Karl-Denninger

Category: Bailouts, Legal, Markets, Taxes and Policy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

93 Responses to “Taxpayer Funded GS Profits”

  1. harold hecuba says:

    bring back spitzer. unfortunately i’ll bet godam stack had a hand in that incident. godam slack could make morgan’s life miserable. it is the gov afterall

  2. Bruce N Tennessee says:

    Well, there are still those on this blog who think these investment banks “deserved” the money they’ve gotten so far, and the money still to come…”what other choice did we have?”….really…how come Bernie Madoff didn’t find you people…

    PT Barnum…wherever you are…I think you can light up a new cigar…

  3. dead hobo says:

    Every time I doubt my decision to cash out a couple of weeks ago, and ultimately come out a few percent below what I would have now if I waited, I think of the scamming and theft that has become an everyday part of the investment community. No, I don’t know of specific details of any events. It just smells bad. It would take an investigative body with subpoena power to find out what is really going on. That, plus honest disclosure, which is apparently another fantasy as it will never apply to those with connections.

    This current rally is part short squeeze, part relief rally, and part scam. Think $147 oil as a reference for the nature of this stock market today. Uncle Stupid just lets this crap happen. All I know is that the markets will fall again sooner or later. The crooks will see to it. They will have myriad short sales ready to go before they crash the market. That will be the purpose of the next partially manufactured little crash… to profit on the way down. Then, sucker shorts who were fooled into helping out will be squeezed once again. I’ll jump in at the bottom, being a good opportunist. While I pity those poor fools who are jumping in now and chasing a rising and fake market, I think I will pity the poor shorts who are taken in on the flip side.

    Preservation of capital is key when crooks control the financial markets and Uncle Stupid is a participant.

  4. hopeImwrong says:

    What a way to start my Monday morning. I feel sick. They are passing out trillions to the scamming bankers, they should at least start passing out mind numbing drugs to the tax payers to help us cope.

  5. Moss says:

    It is clear these banksters have no ethical or moral moorings. This is the first fact that must be acknowledged. Their behavior is predicated on this fact. It is imperative for all those in the know to NOT relent in uncovering these indirect transfers.

    This would be a good first expose for Dylan Ratigan.

  6. cuvo says:

    Perhaps the MSM is nearing readiness for a splendid segue: focus-pull from Piracy off Somalia to the super-colossal Pirates running the show in London, New York and Washington.

  7. Super-Anon says:

    Pure evil.

  8. DaveJ says:

    Might also be interesting to look at who the counterparty was on the hedge. Wonder if that was paid to GS with government funds as well.

  9. rktbrkr says:

    This is why BB, Paulson and Tiny Tim fought so hard to prevent disclosure of the beneficiaries of these Sunday night deals this trio has cooked up.

  10. Corporate Fascism
    It just rolls off the tongue so smoothly.

    Onward, through the fog.

  11. cjcpa says:

    transparency and accountability were promised.

    but.
    that was when they were asking for the money and making promises.
    now, that they have it…. different story.

    of course this is disgusting and change I can be sickened by, but really comes down to –

    Are they going to need to ask for more money? Will false promises be needed or believed?
    Or will the fed just push the money out the back door without going to Congress?

    I guess I know the answer. If I rail against it… I would only be preaching to the choir here. I think.

    cjc

  12. krice2001 says:

    @ dead hobo 8:36

    “This current rally is part short squeeze, part relief rally, and part scam.” Can’t help but have the same feeling. I’ve been mostly on the sidelines in terms of my equities holdings, because the market doesn’t feel “real” or at least based on real fundamentals. It feels like either the gov’t is interfering or the big players (or both). Bruce in Tn had a greta link on Sunday http://zerohedge.blogspot.com/2009/04/incredibly-shrinking-market-liquidity.html — which was interesting reading – Thanks, Bruce.

    If BR’s post is even partly true, it’s even more distressing than I’d thought… Oh well, maybe if there’s a big pullback (as I suspect there will be at some point), I’ll have to join the parade (or is it charade) for a while.

  13. dead hobo says:

    The damn thing is … If Uncle Stupid wants to end the current economic troubles the world is now experiencing, it would be free money to the world if the crooks were banished from the financial markets so that it was safe for normal people to return. Why – How? … that little concept called “the wealth effect”. If markets rise in a sustainable manner, people will feel safe about their financial position and peel a little cash off and spend. Spending will flow and multiply. Everything gets better without the aid of crooks and crooked markets.

    Unfortunately, crooks and scammers control the top of the financial food chain and Uncle Stupid is their enabler, sugar daddy, and accomplice. Only an idiot would put cash into this market long term. The crooks will eat it for breakfast. Traders who follow trends have an advantage. This is beyond most people and even most traders who aren’t part of a criminal conspiracy mess up often.

    In the GWB era, the plan was to spend borrowed money and stick someone else with the bill. It is starting to look like that approach was the chump change approach. Today we have that same philosophy and practice on steroids and concentrated where it will benefit the crooks in the most efficient ways. Uncle Stupid probably thinks he is doing good works.

  14. rktbrkr says:

    I’m sure the rationale we will hear is that although GS, acting through their agents, BB and Paulson, might have scammed the government the economic situation is too precarious for a criminal investigation of their actions.

  15. cjcpa says:

    as for market commentary, my wild supposition is:
    they continue to cook this market higher with great announcements… and then sell more shares.
    which might not be shorting into the market as they talk it up, but is selling, certainly not buying shares….

    after the additional offerings are completed (don’t know when), I expect a downdraft.

    and I’m guessing.

  16. DoctoRx says:

    Great post though am not in love with incitements to violence, even if in jest . . .

    Does Barack Obama as President when the latest payments were made through the AIG conduit to GS and others bear the same blame that George Bush did? I say: “Yes, absolutely”. I also suspect that he promised before the election to support the banksters or else the MSM would have done him in.

    Also wonder why WordPress lacks a spellcheck function: “thta” in final paragraph? It is inappropriate for such an important blog not to have a minimal level of proofreading IMHO . . .

  17. rktbrkr says:

    BB and Paulson paid the counterparties 100 cents on the dollar and now Tiny Tim is scheming to pay the banks near 100 cents on the dollar for their toxic loans – and then lo and behold almost all of the too big to fail bankers will be blindingly profitable and the taxpayers will be left with a multi-trillion dollar tab and the economy will be going pillar to post between depression and hyperinflation.

  18. rktbrkr says:

    I voted for O’B but the Wall Street gang has him brainwashed

  19. “The slavery of fear had made men afraid to think. But such is the irresistible nature of truth, that all it asks, and all it wants, is the liberty of appearing.” — Thomas Paine, Rights of Man, 1791

  20. inthewoods says:

    Let’s also remember that they managed on gaining all this cash while their competitors were taken out. How long before they go back on becoming a bank? My question to the group is this: what is the likely reaction to GS blowing out their number in terms of the stock? And will the public outrage on the level of AIG come into play?

  21. karen says:

    “The liberties of a people never were, nor ever will be, secure, when the transactions of their rulers may be concealed from them.” Patrick Henry

  22. rktbrkr says:

    “A new broom sweeps clean” and TG is the same tired old broom with a new handle

  23. rktbrkr says:

    inthewoods, I’m sure GS is pumping up their reserves etc to try to conceal the magnitude of the wealth transfer from public to private hands – and TG is busily crafting a complicated plan to repeat that with his public-private partnership, public loss, private gain, thats the game thats been played throughout this crisis.

  24. rktbrkr says:

    PIMCO just doubled their gov bond holdings from 15% to 28% from Feb to March, duck & cover!

  25. inthewoods says:

    rktbrkr – why would you interpret that as duck & cover time?

  26. “The unpalatable reality that very few, self interested industry participants are prepared to admit is that much of what passed for financial innovation was specifically designed to conceal risk, obfuscate investors and reduce transparency. The process was entirely deliberate. Efficiency and transparency are not consistent with the high profit margins that are much sought after on Wall Street. Financial products need to be opaque and priced inefficiently to produce excessive profits or economic rents.”
    http://www.washingtonsblog.com/2009/04/leading-credit-default-swap-trader.html

  27. wally says:

    “Great post though am not in love with incitements to violence, even if in jest . . .”

    Agreed, DoctoRx… but the deal in this country is this: we as a society do not resort to violence because we are able to redress issues through the ballot. Do you think that deal is being respected on both sides? When you completely change administrations and put the other party in charge and the looting goes on unabated, what has happened?

  28. wally, DoctoRx,

    the ballot box has been compromised..

    http://www.blackboxvoting.org/
    http://www.amazon.com/Black-Box-Voting-Tampering-Century/dp/1890916900
    Review “Riveting…scoops that would have made her [Bev Harris's] career at the New York Times or Washington Post.” — Vanity Fair magazine, April 2004

  29. flipspiceland says:

    Le’ Guillotine is too good for these charlatans. Gimme four horses and some thick rope.

  30. Steve Barry says:

    Is Goldman that smart or the government that stupid? Or are they all just crooks?

  31. danm says:

    “The liberties of a people never were, nor ever will be, secure, when the transactions of their rulers may be concealed from them.” Patrick Henry
    —————————-
    100% transparency:

    - Having Paulson as Secretary of Treasury = huge mistake from the onset

    - Helicopter Ben

    - Your leaders don’t even try to conceil their their lies and deceit

    You are looking for transaprency in the wrong places. What more do you nedd? The lies and deceit are right in front of your eyes and you don’t see it. The fact that they are making everything opaque is the transparency you should be looking for!

  32. dead hobo says:

    Steve Barry Said:
    April 13th, 2009 at 10:04 am

    Is Goldman that smart or the government that stupid? Or are they all just crooks?

    reply:
    ———————–
    Yes.

  33. DonRobbie says:

    The drama of hostage captain was perhaps an interesting parable, no? You have these four guys, who where holding the captain hostage threatening him with death unless they were paid off. So think of the four guys as the sick banks, think of the economy as the hostage. They insist if they are not paid off the economy will die. What do you do when you have tried everything else to wind the situation down peacefully?

  34. dead hobo says:

    Marketwatch New Item:

    Citi rates Goldman a buy
    By Sam Mamudi

    reply:
    —————-
    When this form of (probably soon to be mutual) sodomy is so open, I just run out of things to say.

  35. franklin411 says:

    Nobody complained when WFC did the same a few days ago. I don’t see why GS is any different.

  36. Steve Barry says:

    Is this rally for real or just another Wall Street game? I follow QQQQ closely…since Nov 21, about 100 trading days, QQQQ has been up, with volume clearly above its 100 day MA exactly 2 times out of 100.

  37. leftback says:

    I agree with others – I am speechless, and feel sick to my stomach after reading this and Zero Hedge’s post on program trading over the weekend. You could see there was program trading going on last week when they would sell 825 and buy 815 over and over, but it’s sickening that this was run by GS (Government Securities). For the time being I am simply not going to participate. There is very little that is occurring that I can believe in. How can anyone believe the earnings from the banks? Fascism is here.

  38. pmorrisonfl says:

    > Is Goldman that smart or the government that stupid? Or are they all just crooks?
    +1 ‘Yes’

    Someone was explaining a conspiracy theory around this to me this weekend, and I got to wondering whether this is no more complicated than DC and Wall Street being populated with Ivy League frat boys who are now bailing their old drinking buddies out.

  39. rktbrkr says:

    Gross Raises U.S. Debt Holdings to Highest Since 2007 (Update1)

    By Dakin Campbell

    April 13 (Bloomberg) — Bill Gross, manager of Pacific Investment Management Co.’s $144 billion Total Return Fund, increased his holdings of U.S. government debt to 28 percent in March, the highest percentage in almost two years.

    Pimco’s founder and co-chief investment officer boosted government debt holdings from 15 percent in February to the most since April 2007, according to the Newport Beach, California- based company’s Web site. The world’s biggest bond fund’s holdings of mortgage-backed securities dropped to 66 percent of total assets from 86 percent in February.

    While the government debt category includes Treasuries, Gross has said that Pimco is not interested in buying the securities. In February, Gross said it was “incumbent” upon the Federal Reserve to buy Treasuries but that he wouldn’t follow the central bank’s lead.

    The central bank said March 18 that it would buy up to $300 billion of U.S. debt in an effort to drive down consumer borrowing costs. The day after that announcement, Gross said in an interview on Bloomberg Television that the purchases won’t be enough to awaken the economy.

  40. rktbrkr Says:

    April 13th, 2009 at 9:37 am
    PIMCO just doubled their gov bond holdings from 15% to 28% from Feb to March, duck & cover!

    Reply: That’s because Pimpco knew full well that the Fed was about to go bonkers with QE, after their March meeting. Pimpco also increased their MBS in advance of the Fed’s March announcement that it would increase its buying (by printing dollars, of course) of MBS to $750 billion, in addition to the $500 billion it had already announced in January.

    Pimpco, and the banks, commercial and otherwise, all knew about this Fed plan well in advance, and acted and invested accordingly. How this isn’t illegal insider trading is beyond me. This type of behavior is exactly the type of behavior contemplated by prohibitions against insider trading.

    Although it seems off-topic, it is of a piece with Goldman’s profits. It shows a financial system run amok, with the only hope for profitably investing is to be one of the directors of the BLT (Ben, Larry and Timmy) show, and those few directors are any banks and bond dealers, etc., that have convinced BLT they are “too big to fail”*.

    Incidentally, Pimpco has already said it will get in and out of the US bond and MBS market in short order (six months or so). Since you know Gross is foreshadowing (he just can’t stand not telling some of what he knows–it makes him look real smart) the end of the QE and MBS purchases, you should manage your investments accordingly.

    “too big to fail”–euphemism for any bank/bond broker, etc., whose failure would make the evening news, not just a paragraph in Sunday’s paper about being placed in receivership.

  41. tlynk says:

    Eerily similar to the premise of The First Billion, let’s hope for a different conclusion…

  42. plantseeds says:

    “Riveting…scoops that would have made her [Bev Harris's] career at the New York Times or Washington Post.” — Vanity Fair magazine, April 2004

    -IMO that’s all you need to know, but if that’s NOT enough to steer you away from this self-serving gas bag, perhaps this is.

    http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=203×340188

  43. franklin411 says:

    @leftback et al:
    Do you even know the meaning of the word “fascism?”

    You do yourself a disservice when you use sophisticated words in a simple-minded fashion:

    Fascism: a political philosophy, movement, or regime (as that of the Fascisti) that exalts nation and often race above the individual and that stands for a centralized autocratic government headed by a dictatorial leader, severe economic and social regimentation, and forcible suppression of opposition.

  44. Steve Barry says:

    I’m starting to censor my own posts due to fears of reprisal…am I paranoid?

  45. “You are looking for transaprency in the wrong places. What more do you nedd? The lies and deceit are right in front of your eyes and you don’t see it. The fact that they are making everything opaque is the transparency you should be looking for!”–danm

    danm,

    nice point, it is no more complex that that.

    “For the time being I am simply not going to participate.”–lb

    lb,

    if more people would follow your lead, we wouldn’t have these types of problems..

    and since I’m flat into the 17th, I’m done, for this interregnum. funny how the 41CV can stay warm crunching other equations..
    http://www.thefreedictionary.com/interregnum

  46. franklin411 says:

    @Steve:
    Just do what I do…write comments on blogs for Goldman and get paid for it…3 cents a word! =P

  47. Incidentally, Pimpco’s decrease in the MBS markets this month (as Bloomberg reported, above) came after an increase from the prior month, just before the Fed announcement it would purchase some more MBS.

    It seems that the best way to be a great bond trader is to be able to order a BLT on speed dial.

  48. dead hobo says:

    leftback Said:
    April 13th, 2009 at 10:26 am

    You could see there was program trading going on last week when they would sell 825 and buy 815 over and over

    question:
    ————-
    Tell me, is this what you mean …

    Last week on Tue and Wed, the market ranged tightly between 815 and 825, more or less. GS put in a floor at 815 by buying if prices fell and tried to tried to set a ceiling at 825 by offering to buy at that level? Then, on Thur, the buy level was set to about 840, hopefully setting that as the floor for an overly enthusiastic market day. When the suckers arrived, they sold their 825 material at 845+, covering the losses from Tue and Wed and making a few bucks on top?

  49. dead hobo says:

    I didn’t say that correctly above. Upon reflection, I’m not sure what I meant. Please explain.

  50. johnbougearel says:

    Goldman Sachs is entirely entitled to the money it recieved from any short sale of AIG. They are also entitled to any CDS counterparty agreements they had with AIG.

    What they are not entitled to is any payouts from AIG paid for by the US taxpayers. AIG is acting as an slush fund authorized by Hank Paulson, the legality of which is on very shaky ground. AIG went belly up in September. If they were properly bankrupted as they should have been, then these CDS contracts would be null and void, and taxpayers would have had no exposure.

  51. leftback says:

    @Franklin: I am quite clear on the meaning of fascism. If we don’t break the stranglehold of the banks we will all be living under its yoke before too long. I refer specifically to the unelected Shadow Government being operated by Geithner, Summers and Blankfein: GS is and always has been a fascist organization by any description.

    This country has already jumped the shark – we are a Banana Republic and the looting is now continuing in broad daylight. Our only hope is that Obama can regain control from the banking oligarchs, or we are finished.

  52. rktbrkr says:

    Here TG’s scheme -1) Stem the slide of home prices primarily in bubble states thru foreclosure moritoria below market rate mortgages and some direct homeowner assistance. 2) While prices have stabilized have the banks offload their worst loans at adequate prices onto the public/private partnership with 93% government funding. 3) After the private money vultures have picked the profits off the bones of the partnership they can default on the non-recourse FDIC lending and dump the carcass on the gummint. 4) After the foreclosures and RE price collapse resumes the gummint can resell or lease the newly defaulted homes for “fair” prices to the home occupants.

    All the major banks will be enormously profitable again, the private money investors will make incredible profits, the foreclosed homeowners will be able to buy/rent their homes at “fair” subsidized prices and we will hear that the $2 trillion spent on this is an “investment” in the country’s future.

    Then we can focus on hyperinflation and dollar devaluation a couple years down the road

  53. Bruce N Tennessee says:

    Franklin 411:

    YOU are calling leftback simple minded?

    Have you no mirrors, man…!

    I read your definition…..hmmm….I see more agreement here with the definition than disagreement…

    a political philosophy…check

    exalts nation over individual…check

    centralized autocratic government…check

    economic and social regimentation…check

    forcible suppression of opposition…hmmmm…maybe not, yet. Suppression need not have brown shirts..there are many ways this is accomplished….

  54. leftback says:

    Thanks, Bruce. Why can’t people see what is going on under their noses?
    Didn’t anyone read Simon Johnson’s piece “The Quiet Coup”?

    Why do you think Joseph Stiglitz and Nouriel Roubini are not in the economic team?
    Because they have clean hands, that’s why… Summers is paid for.

  55. danm says:

    forcible suppression of opposition…hmmmm…maybe not, yet. Suppression need not have brown shirts..there are many ways this is accomplished….
    ———————

    Most Americans with little foreign exposure do not see how much they are forced to conform while they actually think of themselves as free.

    As a foreigner, I could say that suppression of opposition is already there in the form of a set of ideologies or brainwashing. The American dream is only a part of it, the extreme fear of socialism another, etc.

    I still can’t believe that Paulson was allowed to become Secretary of Treasury!

  56. danm says:

    I still can’t get over the fact that Paulson was hired as the Secretary of Treasury and no one questioned the huge conflict of interest.

  57. Mannwich says:

    I’ve said this before but I’ll say it again, fraud and criminality ARE the underpinnings of our system, hence the absence of major perp walks. The whole system is rotten to the core. There are no clean hands of any insider at this point. It may be time to opt out of the markets. What’s the point?

  58. leftback says:

    This is all going to end very badly indeed. The truth will out.

  59. karen says:

    danm, i still can’t get over the fact that Paulson was hired as the Secretary of Treasury and I didn’t buy GS shares hand over fist. (selling them opportunely, of course.)

  60. It just seems like another ‘gift’ to themselves,
    for the ‘generation about to retire’.
    move along, nothing to see here.

  61. Mannwich says:

    @karen: Also, remember Buffet bought GS and WFC. In hindsight, it was dumb to not jump on both bandwagons. I’ll admit that now. There’s no way the Oracle (easy to be an “Oracle” when you get help from your friends) didn’t have inside info that these two firms would not only be saved, but would be saved at all costs by the feds.

  62. Transor Z says:

    So GS got $10 billion in TARP front-door payments (disclosed) and how much through AIG counter-party payments?

    So what are they going to do — repay $10 billion in TARP funds and then maintain the current outstanding shares status quo through a stock issue to general investors?

  63. danm says:

    @karen

    Same here. My issue is that I am so disgusted with the whole thing, I just can’t get myself to throw more money at the problem.

  64. franklin411 says:

    @Bruce:
    Tip o my hat to you–never have I seen a square peg crammed into a round hole so expertly.

  65. Bruce N Tennessee says:

    de nada

  66. Todd says:

    The issue is, that most people instead of looking at their 401k balances are choosing to not look at them at all. They know they are bad, so why bother looking. You can’t change what has already happened. Until I hear echoes of the quiet coup coming from people that I know, that are like this. Nothing is going to change.

  67. Andy Tabbo says:

    I’m not sure who’s running the PR departments of Goldman Sachs, but I would definitely be advising to NOT show huge profits. That would be a really terrible SNAFU to report near record earnings. There would be a public outcry: “Why the F*)K are we giving these guys money and they’re doing so great!!!”

    If I were them, I would do the Jack Welch/GE thing and sleeve those “earnings” for later quarters when they might need the help.

  68. karen says:

    But if GS wants to dilute, don’t they need to provide a reason to buy? It’s all too much… There’s a great base on the $bkx. Now it’s up to the $wlsh and $tran to continue to some higher resistance levels… I refuse to debate fundamentals and/or reasons… and PEs are worthless…

  69. Todd says:

    Anyone Notice that Citi has been very quiet and they report Friday after GS and JPM.

    Is it the surprise mark to Market rabbit waiting?

  70. Transor Z says:

    @karen: But if GS wants to dilute, don’t they need to provide a reason to buy?

    That’s why I was thinking they want to get out from under TARP (i.e., execute a $10 billion “buy-back”) and instead of truly “diluting” vis a vis their current position they will either have the same or fewer outstanding shares.

    And they’re selling new shareholders a storied bank that managed to feather its own nest, remain solvent and show huge profitability.

    Of course, there’s that odd question of what the hell kind of financial institution they actually are at the moment, but…

  71. leftback says:

    I am not bending over in front of these bankstas until the Zombie Bank earnings are over and done with.
    There is so much deceit it is hard to do anything but stand aside.

    Better to trade the reaction to the news, rather than the news itself?

  72. Mannwich says:

    With M&A activity and the securitization market basically dead these days, what exactly is GS’s business model now (aside from unending gov’t bailouts)? Are they really making this much money off of propietary trading, investment mgmt/private banking, and commericial banking activities? I find this truly hard to believe.

  73. lerwin says:

    There is one, and only one, market indicator I follow. It is guaranteed (!!) to produce a profit 100% of the time. When Abbey Joseph Cohen says buy, sell immediately.

    http://www.cnbc.com/id/30190135

    Naturally she works for Goldman. I would prefer public stoning to the guillotine.

  74. Transor Z says:

    Goldman Sachs is a Mystery Cat: he’s called the Hidden Paw–
    For he’s the master criminal who can defy the Law.
    He’s the bafflement of Scotland Yard, the Flying Squad’s despair:
    For when they reach the scene of crime–Goldman Sachs is not there!

    He’s outwardly respectable. (They say he cheats at cards.)
    And his footprints are not found in any file of Scotland Yard’s.
    And when the larder’s looted, or the jewel-case is rifled,
    Or when the milk is missing, or another Peke’s been stifled,
    Or the greenhouse glass is broken, and the trellis past repair–
    Ay, there’s the wonder of the thing! Goldman Sachs is not there!

    And when the Foreign Office finds a Treaty’s gone astray,
    Or the Admiralty lose some plans and drawings by the way,
    There may be a scap of paper in the hall or on the stair–
    But it’s useless of investigate–Goldman Sachs is not there!
    And when the loss has been disclosed, the Secret Service say:
    “It must have been Goldman Sachs!”–but he’s a mile away.
    You’ll be sure to find him resting, or a-licking of his thumbs,
    Or engaged in doing complicated long division sums.

    Goldman Sachs, Goldman Sachs, there’s no one like Goldman Sachs,
    There never was a Bank of such deceitfulness and suavity.
    He always has an alibi, or one or two to spare:
    And whatever time the deed took place–GOLDMAN SACHS WASN’T THERE!
    And they say that all the Banks whose wicked deeds are widely known
    (I might mention Kenny Lewis, I might mention Pandit-bone)
    Are nothing more than agents for the Bank who all the time
    Just controls their operations: the Napoleon of Crime!

  75. gregh says:

    Surprised that Paulson was hired as the Treas Sec, as mentioned above, read The Quiet Coup (google it)

    excerpt:

    Robert Rubin, once the co-chairman of Goldman Sachs, served in Washington as Treasury secretary under Clinton, and later became chairman of Citigroup’s executive committee. Henry Paulson, CEO of Goldman Sachs during the long boom, became Treasury secretary under George W.Bush. John Snow, Paulson’s predecessor, left to become chairman of Cerberus Capital Management, a large private-equity firm that also counts Dan Quayle among its executives. Alan Greenspan, after leaving the Federal Reserve, became a consultant to Pimco

    Should the saying now be ‘Don’t Fight the GS’ ?

  76. hopeImwrong says:

    I can’t keep my food down any more. I just can’t. This time it is different.

  77. Transor,

    that’s really funny/well done. would that be an adaptation?

    “Ay, there’s the wonder of the thing! Goldman Sachs is not there!”
    “He always has an alibi, or one or two to spare:”

  78. Transor Z says:

    @MEH:
    Nothing very creative — just tweaked T.S. Eliot’s “Macavity” a little bit. :)

  79. Transor,

    still, funny and well done~

  80. Transor Z says:

    Thanks.

    “Bad poets imitate; good poets steal.” -T.S. Eliot

    Feel free to steal it if you like it.

  81. CyHastings says:

    Mark E Hoffer Says:
    April 13th, 2009 at 9:25 am

    “The slavery of fear had made men afraid to think. But such is the irresistible nature of truth, that all it asks, and all it wants, is the liberty of appearing.” — Thomas Paine, Rights of Man, 1791

    karen Says:
    April 13th, 2009 at 9:28 am

    “The liberties of a people never were, nor ever will be, secure, when the transactions of their rulers may be concealed from them.” Patrick Henry
    ———————————————————–

    Every normal man must be tempted, at times, to spit on his hands, hoist the black flag, and begin slitting throats.
    H. L. Mencken

    Alan Greenspan and Hank Paulson should be the “Hester Prynne” of civilized society.

    I’m a firm believer in karma….and I gotta tell ya…..I wouldn’t want to be in either one of those scumbags’ Ferragamos. They are gonna get got.

  82. plantseeds,

    I don’t know the woman, the point was that she brought light to a, previously, too, dark spot.

    Transor,

    it’s off into the wild-blue ether, w/attribution~

  83. Cy,

    it’s, a lot, like that.

  84. CyHastings says:

    pmorrisonfl Says:
    April 13th, 2009 at 10:26 am

    > Is Goldman that smart or the government that stupid? Or are they all just crooks?
    +1 ‘Yes’

    Someone was explaining a conspiracy theory around this to me this weekend, and I got to wondering whether this is no more complicated than DC and Wall Street being populated with Ivy League frat boys who are now bailing their old drinking buddies out.
    ——————————-

    Heh. That reminds me of an old joke.

    Do you know what the difference is between a straight frat boy….and a gay frat boy??

    About a six pack of beer.

    OK

    So we’re fucked. Hopefully we’ll see the sociopaths that are responsible in front of an honest judge at some point soon.

    So what’s next??

    70′s inflation on meth?? What would be the first sign of hyperinflation?? GDX?? Oil??

    Who’s going to really take the dollar down??

  85. moneyneversleepsblog says:

    GS released the earnings early.. not sure what the difference is between after the bell today and before the open tomorrow but they were better than expected of course…

    http://moneyneversleepsblog.blogspot.com/2009/04/goldman-sachs-reports-earnings-early.html

  86. Transor Z says:

    In a separate announcement, Goldman confirmed rumors of a $5 billion public offering which will be used (in addition to their current capital) to pay back the $10 billion in TARP funds (if the government will allow it).

    Ding ding ding ding!

  87. Change Your Corporate Overlords Can Profit From…

    Goldman Sachs, in another sign that banks may be turning around, beat Wall Street’s earnings expectations as it reported a profit of $1.66 billion for the first three months of this year. The bank also said it planned to raise $5 billion in stock…

  88. some_guy_in_a_cube says:

    Is that Robespierre over there?

    There, waiting.

    See you at SPX 150.

  89. stan says:

    line them up against a wall ( no pun ) & then …hum – it’s up to the people …

  90. usphoenix says:

    @karen: nice Patrick Henry quote.

    So I guess we’re right back to the same old place. Those that don’t learn from history are doomed to repeat 12th grade.

  91. Stuart says:

    Terrific post by BR and KD. Conflicting thoughts of no kidding, people are surprised?? vs… so what, what’s anyone going to do about it. These folks and their ilk are financial sociopaths and they have to be thought of in that light in order to understand their motives and mindset of milking the sheeple. Recognizing it sounds off the wall, but their kind write and enforce the rules. So watch for it this week,… GS will release earnings somewhere near the rumor level and the markets will rally (with help) and the implications of this post, as dire as putrid they may be for free markets, well, they will be long forgotten as the MSM touts more evidence of a turnaround. In a week, some vague lingering thoughts of impropriety in a few heads will remain, but for most, they’ll tune into American Idol as the MSM floods the masses with channel 2 of the Truman show Owellian menu item of the day.

  92. Stuart says:

    Fannie Mae Chief Executive Herb Allison to run TARP: WSJ

    By Michael Kitchen

    Chief Executive Herb Allison to head the government’s $700 billion Troubled Asset Relief Program, The Wall Street Journal reported late Monday, citing people familiar with the matter. Obama could announce his intention to nominate Allison as assistant secretary for the Office of Financial Stability as early as this week, the report said. He would replace Bush-appointee Neel Kashkari, who was asked by Treasury Secretary Timothy Geithner to stay on until a replacement was found.

  93. What Does “Too Big To Fail” Mean?…

    “What do we do? Exactly the opposite. We forget about the debt, let it explode. We reduce interest rates to zero to stimulate the economy. We pour money into the economy to get even bigger debts. We don’t privatize; we nationalize, except we d…