Worst Idea of 2009
By Barry Ritholtz - November 4th, 2009, 11:08PM
Shorter Floyd Norris:
“Goldman Sachs is trying to arrange to buy tax credits from Fannie Mae. Obviously, it would buy them at a discount.
Goldman, you may recall, was saved with taxpayer money when the panic spread last year. A naïve person might think such a company would see a patriotic virtue in paying taxes.
Fannie Mae is currently a ward of the government. So this boils down to a proposal to pay Uncle Sam perhaps 15 cents to avoid paying 20 cents to Uncle Sam.
The gall involved in even proposing such a thing is awesome.
I could not possibly agree more — its simply insane . . .
November 4th, 2009 at 11:17 pm
Aren’t they teaming up with Warren “I’m all-in on America” Buffett, aka Warren “teaming up with GE and appearing on CNBC all the time” Buffett?
http://www.marketwatch.com/story/buffett-joins-goldmans-fannie-tax-credit-bid-wsj-2009-11-04
Buffett is taking on more than a few characteristics of Jim Cramer.
November 4th, 2009 at 11:30 pm
The Treasury is notorious for protecting their revenue streams. For example they strongly oppose any expansion of tax exempt financing. If the Treasury accepts this slight-of-hand to make Fannie Mae a little better off but at the expense of future revenues to the Treasury, then they are buckling under political pressure.
This will be yet another test of who really runs the country. If Buffett is involved, then he can kiss his goodwill with America goodbye.
November 4th, 2009 at 11:39 pm
“The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. ”
True to the words.
November 4th, 2009 at 11:42 pm
TaxProf Blog
A Member of the Law Professor Blogs Network
Warren Buffett: Tax Hypocrite?
Future of Capitalism, Warren Buffett’s Tax Hypocrisy:
When Warren Buffett criticized President Bush’s tax cuts while plumping for the presidential campaigns of Barack Obama and Hillary Clinton, he garnered prominent, adulatory headlines … Consider that as the context for two pieces of information:
First, the observation, amid a column in today’s Wall Street Journal, about Berkshire Hathaway’s cash mountain: “Mr. Buffett would rather not resort to the simplest way of solving this problem — paying excess cash out to shareholders in the form of a dividend. Since he owns roughly 26% of Berkshire’s shares, a cash dividend would saddle Mr. Buffett with one of the largest personal-income tax bills in American history. That’s not the kind of thing at which he likes to excel. Mr. Buffett’s reluctance to pay a dividend leaves him with little choice but to buy big companies outright.”
Second, the news (again, from the Wall Street Journal) that Mr. Buffett’s Berkshire Hathaway is joining in a bid to buy $3 billion in tax credits from Fannie Mae. Reports the Journal: “The credits are virtually worthless to Fannie Mae and require the company to take losses each quarter as their value declines. Companies such as Berkshire Hathaway and Goldman Sachs could use them to offset federal tax expenses.”
Neither Journal article places the news in the context of Mr. Buffett’s stated support for higher taxes.
November 5th, 2009 at 12:22 am
Burn these f*&^$#s.
November 5th, 2009 at 1:43 am
That is appaling. You are buying your shit with other people money. Unbeliavable. The rockfellars really are taking this to next level.
Has anyone noticed the auction next week. Article in FT states that 81 bn to auction. That is record for a week.
Barry I have heard many off hand rumours about a banking shutdown FDR style if things dont work out. DO you think there is any likelihood.
Fresbee
GA Alpha Fund
November 5th, 2009 at 4:16 am
BR: This is a first, but I have to disagree with you. I don’t recall any time prior to this that I read a position you had taken and thought “no, wait, that’s not right”. Oh well, there’s a first time for everything I guess. I usually don’t post comments worth a damn, but once again, there’s a first time for everything.
Goldman seeks ways to offset its overall tax bill – it is, after all – extremely profitable (which in itself appears to piss a lot of people off, but let’s put the outrage aside, and keep the focus where it should be). Looking for legal ways in which to lower your tax bill isn’t just a right, it’s a responsibility you have to your shareholders and employees alike.
Who the hell cares about the identities of the seller, or for that matter of it, the buyer? – no one should, but apparently everybody does. It ought not to matter a tinker’s damn whether the buyer is Goldman – or – any other company out there which is fortunate enough to be profitable in the current environment. OK, the seller is Fannie Mae well FINE. They have a method in which they can raise cash – unarguably, they sure as hell need it. Would anyone feel better if they buyer was Google? – just as an example of another entity which is solidly profitable. Have we reached the point of deciding whether or not the parties to a transaction are “popular” enough or if those parties have passed some ethereal test of political correctness?
This isn’t some cooked up scheme out there at the fringe of legal space, and invented by Goldman, it’s out there in the public domain, and absolutely any profitable entity can apply. Why not Goldman Sachs?
Goldman Sachs has a PR problem, and one of its own making. No one, I think, will deny that, and yes the “outrage” out there (which I think should rightly be termed “envy” but let’s leave that) is probably a part or a consequence of the GS public relations screwup…..
Goldman is being castigated for being successful at being a skilled practitioner of hard nosed business. I can’t help but wonder if the “outrage” (envy) isn’t emanating from the losers gallery, populated by such giants of the banking and finance industry such as C and, to a lesser extent, BAC….and their paid crew of professional apologistas
At the very moment that the PPIP (or whatever moniker you refer to it by) is attempting to lift some of the bailout load off the public (read taxpayers) shoulders, Goldman get’s slammed for simply doing what it should be doing! Participating in the program, thus to some degree serving the public interest (IF and only IF you define PPIP as being in the public interest to begin with, but that’s another matter beyond the scope of this scream of rage) and at the same time, serving the interests of their shareholders and employees
Unless suddenly – during play – someone has changed the rules of the game to state that successful and profitable companies should fall on their collective swords because success and profit are evil, then the criticism leveled at GS is both stupid and futile. It says the worst about the observers and commentators, not the best. It speaks volumes about how we define success, and – once achieved – what we do with it.
Let’s talk judgement here, not the identity of the folks making the judgment.
@Steve Barry:
With respect – I see no connection between the foul mouthed, uncouth, utterly contemptuous fat bastard Cramer, and Buffet/Berkshire. I cannot see a more dissimilar comparison anywhere. Cramer is a self aggrandizing fool. The man is a hysterical raving psycho with a TV show. He brings disgrace, dishonor, and public scorn to the professions of trading, money management, and financial advice. All of ‘em – in one shot. Oh yes – the defense – He gets it right? So does a stopped clock – twice per day to be exact. The same cannot be said for Cramer – a fact which I find to be blessedly fortunate. But he has a TV show [gasp] and what a podium that is! Joe Sixpack listens with an open mouth, but JS is a mouth breather anyway, so that means he sits on his couch guzzling beer with a slack jaw and unchanged heartrate. He can tell his buddies in the bar what the market (according to Cramer) is gonna do tomorrow/next week/next year, and some fool will buy him a beer as a result.
Buffet/Berkshire has no such podium, and apparently doesn’t seek one either (which is not that hard to understand why).
The one and only part of that piece you quoted that I agree with, is in the comments – specifically one commenter who thoughtfully pointed out that it’s a taxpayer owned company which is the seller, and the revenue stream is distorted as a result. True indeed, but the tax credits – rightly or wrongly – are out there. Buffet/Berkshire “teaming up” with GS? So what if he is? – and IF he is, where’s the proof? – and if the proof existed, why would it matter? Rumors heard on the street aren’t news. This article wasn’t sourced, we can’t – and shouldn’t – take it as fact.
I am sick and tired of the Goldman bashing that has persisted these past months. It’s sickening. Yes, GS management should have handled the PR end with as much skill as they apparently handle their business affairs, but then I’m sure we would hear endless stories about “GS Spin” instead of “GS Evil”.
The focus should be on Rebuilding, Realignment, and Reform. Those are the issues that matter most. This is all just nasty noise and envy.
I guess I’m done. Thank you, and goodnight.
November 5th, 2009 at 6:03 am
@Bog: I didn’t fully equate Buffett and Cramer…I will note some similarities:
1) Doing business with or very supportive of Goldman…Cramer used to work there
2) Talking your book on CNBC…Buffett used to work in the background…now often appears on CNBC
3) Buffett makes its clear he is “all-in” on the railroad deal…I don’t think Ben G, Buffett’s mentor, would approve of such a move…sounds like showmmanship, a la Cramer.
4) General hypocriticality
Any others?
November 5th, 2009 at 6:04 am
Insane, lol, how about brilliant, while it discloses Madoff like returns on daily trading, something like 95% success rate, big bonuses, it says oh we will donate larege sums of money, and now we have tax credits, lol……………….like 3 card montey part of the game is to decieve the eye, with goldman it is the ear……….oh taxes taxes taxes, so blanky says okay fine, gives it up, and keeps it in his aresenal of the corageous things he has done for the taxpayer…………..a month from now there will be another, standard public relations BS, give up 5% so you can keep the madoff win streak going, which is the golden goose
November 5th, 2009 at 6:09 am
This should be wrapped around 85 Broad Street, smothering all within:
“The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. ”
True to the words.
November 5th, 2009 at 6:20 am
@the smelly one
Really? You see no extreme conflict of interest, to put it mildly, between the ‘legal’ payoffs to elected government officials to bribe them to place ex-Goldman Sucks employees at every crucial crossroads in finance all over the universe?
.
I freely admit that if I could do what Goldman Sucks has done and continues to do for personal enrichment I would do also. But I would also be concerned every day of my life that I would not see the sun the next morning.
For corrupting and abusing the public trust with arrogant, avaricious, wreckless abandon I would expect to pay holy hell.
November 5th, 2009 at 6:37 am
No, this worst idea of 2009 is the “Public Option” in the health care reform being debated in congress. Medicare is due for a 21%, pretty much across the board cuts in 2010, and now you want to put your health care in the hands of the government. I would bet my right foot that if this goes ahead we’ll end up with a stagnant, rationed system that will appeal to no one. Certainly I would not expect the current crop of misfits to make a medical utopia. We can’t pay for care for seniors, we won’t pay for care for everyone….
http://finance.yahoo.com/
Top Stories
‘Clunker’ data show pickup-for-pickup trades- AP
“Billed as a way for the government to put more fuel-efficient vehicles on highways, the popular $3 billion Cash for Clunkers program mostly involved swaps of old Ford or Chevrolet pickups for new ones that got only marginally better gas mileage, according to an analysis of new federal data by the Associated Press.”
…Soapbox over!……
November 5th, 2009 at 6:52 am
http://www.foxnews.com/politics/2009/11/05/democrats-plan-help-uninsurables-questioned/
Democrats’ Plan to Help ‘Uninsurables’ Requires 6-Month Wait
‘WASHINGTON – You’re afraid your cancer is back, and a health insurance company just turned you down.
Under the health care bills in Congress, you could apply for coverage through a new high-risk pool that President Barack Obama promises would immediately start serving patients with pre-existing medical problems.
Wait a second. Read the fine print. You may have to be uninsured for six months to qualify.
“If you are a cancer patient and have cancer now, you can’t wait six months to go into a plan because your condition can go from bad to death,” said Stephen Finan, a policy expert with the American Cancer Society Cancer Action Network. He called the waiting period in the Senate bill “unacceptable.”
…These guys make Paris Hilton look like Albert Einstein….Forget “end of life counseling”…if you have cancer, by the time you are insured, you are dead…save money two ways..no medical costs, and no counseling since you are not on the government plan.,,
…By far the worst idea of 2009….
November 5th, 2009 at 7:22 am
“…perhaps 15 cents to avoid paying 20 cents to Uncle Sam…”
A very significant “perhaps.” So please let me know, exactly, how much they pay, how much they get and then we can comment on whether this is some kind of theft or not.
The fact is the Congressmen and president you voted for put the low housing tax credits into the Reagan era bill. If you don’t like it, ask them to change the rules or vote them out. In the mean time, what “law” is being broken in this decades-old business dealing?
November 5th, 2009 at 7:41 am
@bogwad_seigneur
Prior to 2008, I would have agreed with your synopsis – it is all about envy.
Heck everyone’s boat was rising and Goldman Sachs simply was the brightest of the bunch. The concentration of wealth and incomes was somewhat concerning but when I looked around, it seemed like my neighbors were all doing OK, everyone had a job, lots of disposable income, so I guessed the Ruebens, Greenspans et al knew what they were doing and if the meritorious prospered, so be it.
Fast forward to what we know now. That entire era was a facade. The jobs, the new homes, the disposable income were all the result of excessively risky and irresponsible financial engineering. Much of it undoubtedly developed and or promoted by those smart guys – Goldman Sachs. My neighbors were living on credit being given away by a financial system run a muck.
What have we learned? The infiltration of government, greasing the skids with hundreds of millions in campaign contributions and sprinkling in a few really really nice low rate mortgages to high placed officials allowed GS and the rest and the gang to essentially engage in unlimited risk taking as capital requirements were for all intents and purposes removed.
Today when I look around, my neighbors aren’t doing so well anymore. In fact many are slowing dying in financial terms. Living off of what they thought they had saved for retirement. Property theft is up. Local parks are being shut down. And we all have this foreboding that times will only get worse when the 401Ks are drawn down completely and there are no more family members to turn to.
The weaknesses in our economic system are now being exposed and stripped bare. The high incomes at Goldman Sachs and the IB community were not because of some great improvement in the efficiency and effectiveness of capital allocation. rather it was a reckless, wanton act of greed and gambling style operations that destroyed the livelihoods of tens of millions of formerly middle class individuals.
This is so totally different than a Sergey Brin or a Steven Jobs who in the course of amassing enormous sums of personal wealth have also provided permanent wealth and economic gains to society at large. We now understand that the Goldman Sachs simply takes and destroys. They do not add value, they destroy value. They do not make the world a better place in the “invisible hand” free market style. No, their invisible hands are basically the high powered lobbyists who are groping any and everyone with power and influence in Washington D.C. They in essence are stealing the middle class poor in order to enrich.
So, at least in my case, the “envy” is now anger. But more importantly it is a sincere concern, hopefully without sounding too melodramatic, for the very existence of our free market economy, for our values as a society and for our way of life.
I hope I am wrong, but I see that wealth and income has become so concentrated that the rest of society may not have the financial where with all to keep the economy self sustaining at any level near to where it was before. I see a political system that has been so corrupted by greed and self interests that it is no longer capable of governing for the public good. I see a society that is becoming obsessed with “gaming the system” rather than with the rule of law or acting with any semblance of integrity.
I see Goldman Sachs as both the symbolic and in many ways the actual source of the corruption and degradation of our economy, ethics, values, institutions and quality of life.
So my admiration is now anger. My respect has turned into disdain. I can only hope that my change in attitude is shared by enough other people so that real changes will be made to preserve our economy and society before it has been completely ruined. I do not think we have very much time.
November 5th, 2009 at 8:14 am
Looking for legal ways in which to lower your tax bill isn’t just a right, it’s a responsibility you have to your shareholders and employees alike
————
When you can get the CEO (Paulson) of a firm (GS) to sell his assets tax free (GS shares) to become the Secretary of Treasury, thereby in a great position to redefine the meaning of legality, why would you cling to the concept of legality unless it was advantageous to you personally?
In 1995, Quebec had a referendum. We had to decide whether or not we wanted to stay with Canada or split up. So many people were stuck on the legality of the issue: “You can’t seperate, it’s not legal.”. So many people can not wrap their brains around the concept legality.
That’s what wars are made of. When laws don’t make sense to enough people, they revolt. The US did it. It was formed with the Declaration of Independence.
November 5th, 2009 at 8:16 am
Yes, GS management should have handled the PR end with as much skill as they apparently handle their business affairs, but then I’m sure we would hear endless stories about “GS Spin” instead of “GS Evil”.
———
Yes of course, it’s all about image, never mind the substance.
November 5th, 2009 at 8:28 am
At the risk of bringing up a taboo subject, has anyone considered the possible anti-semitic backlash that could possibly arise from the strong anti-Goldman feeling that is building? I am just throwing this out as a possibility.
While Goldman hasn’t been Jewish-only for a long time, the origin of the firm name is clear and it still has a number of well known Jewish officers, directors and alumni.
I had thought of this a while back when the crisis was developing and how Goldman alumni seemed to be behind every pillar in the Capitol building. It seemed that an political opportunist could have made Goldman a target, i.e., the examplar of the rich Jews of Wall Street who have been bilking the rest of America.
Matt Taibbi’s piece yesterday, http://trueslant.com/matttaibbi/2009/11/04/goldman-one-ups-gordon-gekko-says-jesus-embraced-greed/ , brought this back to mind. Bringing in the subject of Jesus to justify bonuses in what is widely perceived to be a Jewish firm seems like a really bone-headed idea. Combine this with the right wing populist movement that appears to be developing to take advantage of the last two Administrations’ cozy ties with Wall Street and the fact that the right wing has many people who don’t have a great love for the Jews, e.g. support for Israel because the Bible says so, but believing Jews are condemned to hell, or articles like the one discussed here http://jta.org/news/article/2009/10/19/1008592/south-carolina-gopers-demint-like-a-jew-watching-our-nations-pennies .
With elections approaching next year and little prospect of a real improvement in the economy and jobs, it does seem to me that there is a real possibility of some demagogues running on this issue in places with high unemployment and foreclosure rates, as well as fundamentalist populations. Of course, they probably won’t be stupid enough to make these arguments explicit, but they won’t have to.
November 5th, 2009 at 8:37 am
It would be interesting to see how many GS employees were allowed to sell their GS or other holdings tax free. They claim their motives for public service is to ‘give back’ . Give back what I wonder.
November 5th, 2009 at 8:42 am
“Really? You see no extreme conflict of interest, to put it mildly, between the ‘legal’ payoffs to elected government officials to bribe them to place ex-Goldman Sucks employees at every crucial crossroads in finance all over the universe?”
Of course there’s a conflict of interest, but it’s legal.
“That’s what wars are made of. When laws don’t make sense to enough people, they revolt. The US did it. It was formed with the Declaration of Independence.”
This is technically untrue.
If you’re looking for a better example of “when laws don’t make sense to enough people, they revolt”, your example would be Shays Rebellion and how the “laws that didn’t make sense” were the Articles of Confederation, which were replaced by the Constitution which came into effect in 1791.
November 5th, 2009 at 8:48 am
At the risk of bringing up a taboo subject, has anyone considered the possible anti-semitic backlash that could possibly arise from the strong anti-Goldman feeling that is building?
No, in fact I find the notion of it inane.
November 5th, 2009 at 9:00 am
“it was formed with the Declaration of Independence.”
the Declaration of Indepedence broke the laws of the land, England laws. i’ve said this before, we’re a nation of law breakers. if Rush Limbaugh, Fox News were around in 1770s, they would be saying, “we’re conservatives, we must stay with England. “
November 5th, 2009 at 9:00 am
English laws.
November 5th, 2009 at 9:05 am
hue, danm, et al.
sometimes, it helps to read the thing..
The Unanimous Declaration of the Thirteen United States of America
When, in the course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the laws of nature and of nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.
We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness. Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security. — Such has been the patient sufferance of these colonies; and such is now the necessity which constrains them to alter their former systems of government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute tyranny over these states. To prove this, let facts be submitted to a candid world.
He has refused his assent to laws, the most wholesome and necessary for the public good.
He has forbidden his governors to pass laws of immediate and pressing importance, unless suspended in their operation till his assent should be obtained; and when so suspended, he has utterly neglected to attend to them.
He has refused to pass other laws for the accommodation of large districts of people, unless those people would relinquish the right of representation in the legislature, a right inestimable to them and formidable to tyrants only.
He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public records, for the sole purpose of fatiguing them into compliance with his measures.
He has dissolved representative houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.
He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the legislative powers, incapable of annihilation, have returned to the people at large for their exercise; the state remaining in the meantime exposed to all the dangers of invasion from without, and convulsions within.
He has endeavored to prevent the population of these states; for that purpose obstructing the laws for naturalization of foreigners; refusing to pass others to encourage their migration hither, and raising the conditions of new appropriations of lands.
He has obstructed the administration of justice, by refusing his assent to laws for establishing judiciary powers.
He has made judges dependent on his will alone, for the tenure of their offices, and the amount and payment of their salaries.
He has erected a multitude of new offices, and sent hither swarms of officers to harass our people, and eat out their substance.
He has kept among us, in times of peace, standing armies without the consent of our legislature.
He has affected to render the military independent of and superior to civil power.
He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his assent to their acts of pretended legislation:
For quartering large bodies of armed troops among us:
For protecting them, by mock trial, from punishment for any murders which they should commit on the inhabitants of these states:
For cutting off our trade with all parts of the world:
For imposing taxes on us without our consent:
For depriving us in many cases, of the benefits of trial by jury:
For transporting us beyond seas to be tried for pretended offenses:
For abolishing the free system of English laws in a neighboring province, establishing therein an arbitrary government, and enlarging its boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule in these colonies:
For taking away our charters, abolishing our most valuable laws, and altering fundamentally the forms of our governments:
For suspending our own legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.
He has abdicated government here, by declaring us out of his protection and waging war against us.
He has plundered our seas, ravaged our coasts, burned our towns, and destroyed the lives of our people.
He is at this time transporting large armies of foreign mercenaries to complete the works of death, desolation and tyranny, already begun with circumstances of cruelty and perfidy scarcely paralleled in the most barbarous ages, and totally unworthy of the head of a civilized nation.
He has constrained our fellow citizens taken captive on the high seas to bear arms against their country, to become the executioners of their friends and brethren, or to fall themselves by their hands.
He has excited domestic insurrections amongst us, and has endeavored to bring on the inhabitants of our frontiers, the merciless Indian savages, whose known rule of warfare, is undistinguished destruction of all ages, sexes and conditions.
In every stage of these oppressions we have petitioned for redress in the most humble terms: our repeated petitions have been answered only by repeated injury. A prince, whose character is thus marked by every act which may define a tyrant, is unfit to be the ruler of a free people.
Nor have we been wanting in attention to our British brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. We must, therefore, acquiesce in the necessity, which denounces our separation, and hold them, as we hold the rest of mankind, enemies in war, in peace friends.
We, therefore, the representatives of the United States of America, in General Congress, assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the name, and by the authority of the good people of these colonies, solemnly publish and declare, that these united colonies are, and of right ought to be free and independent states; that they are absolved from all allegiance to the British Crown, and that all political connection between them and the state of Great Britain, is and ought to be totally dissolved; and that as free and independent states, they have full power to levey war, conclude peace, contract alliances, establish commerce, and to do all other acts and things which independent states may of right do. And for the support of this declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our lives, our fortunes and our sacred honor.
http://www.constitution.org/usdeclar.htm
November 5th, 2009 at 9:08 am
This is a really nice example of what folks hate about the status quo that GS represents/helped shape.
They’re flush with cash — and not bk — thanks to the AIG nonsense and as a result they can buy a large amount of tax credits (that still rounds to zero, by the way) from Bozo the GSE. If you’re not outraged by GS’s very existence right now, I think you’re missing the point.
November 5th, 2009 at 9:10 am
Hoffer, it’s good to be the king, or Goldman
November 5th, 2009 at 9:11 am
if Rush Limbaugh, Fox News were around in 1770s, they would be saying, “we’re conservatives, we must stay with England.
LOL.
And everyone in the Democratic Party that wants to immediately leave Iraq and Afghanistan with haste would have been the warmongers leading the charge against the Tories for independence, right? “War doesn’t fix problems.” Allright then, enjoy being colonial subjects for as long as the Canadians did.
Any more analogies from 230 years ago to be shot down anyone?
November 5th, 2009 at 9:12 am
Brilliant idea. Whoever came up with it should get a huge bonus!
November 5th, 2009 at 9:15 am
rj: Thanks for the well-reasoned reply
I thought the newspaper article with the Jewish stereotype pretty insane and stupid, but they wrote it and probably struck a chord in many bumpkins.
November 5th, 2009 at 9:15 am
“all men are created equal” except if he were black or female back in the day. so they didn’t really mean all men are created equal. and it’s the king’s laws, no matter how arbitrary or capricious
November 5th, 2009 at 9:16 am
You people need to relax.
We ALL work for Goldman Sachs now.
November 5th, 2009 at 9:20 am
rj: Thanks for the well-reasoned reply.
No problem.
When the Madoff scandal first broke, I read a NY Post article on it. And there was a commenter in there chastizing everyone replying for being anti-Semitic (since Madoff is Jewish). People were not villifying Madoff because he was Jewish, people were villifying Madoff because he ran off with everyone’s money.
November 5th, 2009 at 9:30 am
hue,
do some thinking, see: “..laying its foundation on such principles and organizing its powers in such form.”
such principles ~”We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.”
and,
“..That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive to these ends, it is the right of the people to alter or to abolish it, and to institute new government..”
These cats weren’t telling you that they created the perfect mold, they said what they believed, told you it was malleable, and left one with a caution ~”Prudence, indeed, will dictate that governments long established should not be changed for light and transient causes; and accordingly all experience hath shown that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed.”
To me, they could have, easily, done much worse. Obviously, many others have, and continue to do so.
November 5th, 2009 at 9:34 am
rj,
though, out of curiosity, w.this: “how the “laws that didn’t make sense” were the Articles of Confederation”, what was wrong with the A of C ?
November 5th, 2009 at 9:37 am
Mike in Nola, there used to be a split on Wall Street, between Jews (Goldman, Lehman etc) and Wasps (First Boston, Dillon Read. Merrill was known as a Catholic firm.
rj, American Indians (or do we call the first people on the continent Native Americans, tho if you are born here aren’t you a Native American) are the original and true Nativists. they should say get out whitey and the rest of youse, then we put up a fence.
November 5th, 2009 at 9:43 am
Hoffer, do some thinking lol, “it was malleable” so you in power then get to be bend and shape it to your liking, like King George. meet the new guard, same as the old guard. just like guantanamo bay right? we believe to a right to a speedy trial or the Geneva conventions, except when we deem you as a terrorist.
well, i’m sorry i brought that up, i don’t want to fight the cultural war here, or debate laws. besides being an armchair central banker, i don’t want to add armchair attorney to my plate.
November 5th, 2009 at 10:11 am
hue:
Have read many histories of Wall Street. Once in Golconda is a favorite. I don’t think there is a real religious split in Wall Street any more; they are almost all just greedy bastards.
But when has reality trumped politics? It’s easy to run against a villain, real or imagined. Having grown up in the South during integration of the schools, I have seen how easy it is to stir up people who think the social order is threatened. Blankfein may be the next Willy Horton.
November 5th, 2009 at 10:22 am
you are Mike on Nola. i worked for a few years in jackson, ms. threatened social order, Glen Garry Glen Beck is off the charts popular. will Blankfein loot the Treasury on work release?
November 5th, 2009 at 10:37 am
Goldman Sachs need a public and brutally direct, official slapdown by top level Govt officials reminding them they exist today because of the taxpayer.
November 5th, 2009 at 10:49 am
Mike in H-town,
ever read anything by Garrett, Garet ?
like http://www.amazon.fr/gp/product/product-description/0471238988
http://blogofbile.com/2008/07/22/meta-review-generational-dynamics-on-the-bubble-that-broke-the-world/
http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Garet+Garrett
November 5th, 2009 at 10:55 am
boys and girls this is an interesting thread ..I saved the blogger debate between bogwad_seigneur (the smelly one) at 4:16 am and bsneath at 7:41 am as “Capitalism pov vs Socialism pov”
on the other allegiances inner-thread .. imo (it goes) (in order most important to least)
self; family; corporation; religion; country .. and that is a problem (again imo)
as far as the birth of America (& similarly separation of church and state) ..me thinks the move across the ocean (& new denominations) .. was all about creating a new scheme with which to be king of
November 5th, 2009 at 10:57 am
boys and girls this is an interesting thread ..I saved the blogger debate between bogwad_seigneur (the smelly one) at 4:16 am and bsneath at 7:41 am as “Cap pov vs Soc pov”
on the other allegiances inner-thread .. imo (it goes) (in order most important to least)
self; family; corporation; religion; country .. and that is a problem (again imo)
as far as the birth of America (& similarly separation of church and state) ..me thinks the move across the ocean (& new denominations) .. was all about creating a new scheme with which to be king of
November 5th, 2009 at 11:09 am
Mike in Nola is correct to point out that there is a very good chance of anti-Semitism rearing its ugly head again, what the chutzpah exhibited by Goldman.
That’s not inane, it is simply how people think. If anyone thinks racism was banished to the ash-heap of history by the election of Barack Obama, it would be wise to remember that Obama is only half-black, and threw his avowedly black-power racist reverend Wright (the guy that married him) under the bus as soon as it was clear it would be an impediment to his election. He was all black to blacks, but half-white to the whites. I submit his somewhat unusual racial background is the difference that allowed a “black” man to be elected president.
So far as Goldman buying tax credits from an entity that is effectively now a part of the very government to whom its taxes would be paid–well, I think Goldman has a tin ear to the pain being endured by the people to whom its taxes are owed. Whether the rage bubbles out as thinly-veiled anti-Semitism or not really doesn’t matter. The rage is coming. It’ll get here about the same time as we endure the next leg down from this exercise in returning things to the way they were before the crash, i.e., in returning to the ways of business that led to the crash in the first place.
November 5th, 2009 at 11:15 am
http://www.daily-chronicle.com/articles/2009/11/04/16158959/index.xml
Unpaid docs owed millions
“ShareDeKALB – A network of local physicians sent a letter to the state last week, threatening to leave the state employee insurance network unless Illinois ponies up millions of dollars owed on employee insurance claims.
….torrie, you won’t find peeps willing to go into medicine for these types of shenanigans….it will be no different on a national scale…
November 5th, 2009 at 1:08 pm
rj, American Indians (or do we call the first people on the continent Native Americans, tho if you are born here aren’t you a Native American) are the original and true Nativists. they should say get out whitey and the rest of youse, then we put up a fence.
hue, I’m part Cherokee, so I’ll be more than happy to eminent domain your house and property to no expense for myself .
though, out of curiosity, w.this: “how the “laws that didn’t make sense” were the Articles of Confederation”, what was wrong with the A of C ?
Very weak central government that could not respond to threats in a coordinated fashion (for example, Shays Rebellion). No central executive due to the original fear of creating a King George-like individual. Very small tax collection that the states would sometimes pay and sometimes not. All laws had to be approved unanimously by the state legislatures which created massive gridlock. Virginia and Pennsylvania fought a brief conflict with their own state militias.
November 5th, 2009 at 1:23 pm
Putting the PR issue aside, why is this such a bad idea? The companies that were the primary investors in tax credit equity (Fannie, Freddie, Citi, BofA, AIG, ML) will NEVER use these tax credits. The real worst idea was the billions and billions of equity that they invested in LIHTC for expected returns of 5%-7% in projects that have significant real estate risk (not to mention risk that the investor may not be a tax payer in the future) and zero upside.
If these government-owned companies can monetize some of these now worthless investments and receive much-needed cash in exchange why is this such a bad thing? Yes, the deal will require Treasury approval, but shouldn’t they look at the trade off between the lost revenue stream if the tax credits are utilized by GS and the benefits received by the companies that the Treasury now owns? We also should keep in mind that the government received the benefit that the tax credits were intended to provide – affordable housing was built and those projects must remain affordable and in compliance with the program regardless of who owns the tax credits.
November 5th, 2009 at 1:23 pm
rj, you’ll have to fight it out with BofA/cwide. i’m just renter with debt. BofA is a very appropriate name, insolvent like its customers.
November 5th, 2009 at 1:27 pm
rj, you’ll have to fight it out with BofA/cwide. i’m just renter with debt. BofA is a very appropriate name, insolvent like its customers.
Sounds good, I got plenty of money in the bank and no debt. I’m sure BofA would let me have your possessions for 50 cents on the dollars, and then since you think the Native Americans should kick out whitey and put up a fence (even though I’m whitey myself, but hey, I got Cherokee blood in me so I’m golden per you), we’ll deport you somewhere nice like Haiti.
November 5th, 2009 at 1:29 pm
rj,
those are nice points; I’ve, always, found these http://www.wepin.com/articles/afp/ , in general, and this, answering the Q: “Why the Articles Failed”
http://www.wepin.com/articles/afp/afp21.html to be illuminating..
we should note, but, for the ‘anti-’ Federalists, the “Bill of Rights”, at the minimum, would have been not, at all.
Funny/Odd, in this Nation of ‘rugged individualists’, We, seemingly, are all ‘Federalists’..
November 5th, 2009 at 1:36 pm
we should note, but, for the ‘anti-’ Federalists, the “Bill of Rights”, at the minimum, would have been not, at all.
Correct. My state of North Carolina originally rejected the Constitution due to its lack of a Bill of Rights. We voted for it after the Bill of Rights were in there.
Rhode Island initially rejected the Constitution too, although I don’t know why they did it.
November 5th, 2009 at 1:37 pm
guess GS didn’t get Joe’s memo…
November 5th, 2009 at 2:24 pm
rj, nah chief, don’t send packing. i got here via the Domino Theory. this country with of its issues is still best place to be. so many Americans seem to be a quarter or an eighth Cherokee. would that be the ones that assimilated Roanoke Island? you might be more diluted Cherokee than you think.
November 5th, 2009 at 4:50 pm
Bruce,
I don’t understand your position. I’m happy with the service, thus, I’m??????
I’ve mentioned a few times over the last two weeks, states, counties, cities, will be laying off lot’s of folks….they live and die on taxes, sales, and real estate, both are screwed, and they have bonds out the ying yang for crap from years ago, California is just the tip of a bond iceberg…………..thus my rigamorow that it is all about inflating real estate higher and higher, even though next year foreclosures will be worse due to option arms imploding.
and fwiw, i’m not worried about folks wanting to become doctors, imho, the insanity is well ingrained, what my concern is how much debt those good folks have too incure, my guess is it is probably 4 times the cost of when you went too school, college is viewed as some panacea when all it is a piece of paper that says you can accept present pain for future gain and can follow directions, somewhat
i’ve worked with 1/2 dozen folks in early 20’s that have insane college debt for degree’s in basket weaving that pay nothing and hold no future, for some reason they believed this piece of paper was the ticket as opposed to clear thinking direction and hard work
November 5th, 2009 at 8:31 pm
bogwad_seigneur (the smelly one)
You’re totally right. We shouldn’t care.
So just like AIG paid out par on all of the CDS exposure, let GS pay out 100% on it’s tax liability to the United States.
Period.