Tuesday, April 14, 2009

Being Goldman Sachs

Goldman Sachs reported a first quarter profit of $1.8 billion. According to CNN Money, Goldman Sachs plans to raise $5 billion dollars and by doing so repay taxpayers for the TARP. Anytime an American company makes a profit and pays the taxpayers back this is good. But I can't help but to wonder about their practices that got them there, enabling them to double dip on the front in with fat fees and the back end too with mark to market as well as being a counter party to AIG receiving $17.9 billion in TARP funds. It must be too sweet that Mr. Liddy, the former Goldman Sachs board member is now the CEO of AIG.

Has there been an investigation into the credit agencies that gave these banks AAA ratings for these bogus default swaps? Has there been an investigation into the policies of the Federal Reserve that seem to have allowed banks to do just as they pleased, with a mere an excuse for not seeing it coming? Are they the experts? Have those in Congress who sat on banking committees such as Senator Dodd (D) and Senator Shelby (R) themselves been required to be held responsible for their failed oversight as ranking members of the Senate Committee on Banking, Housing and Urban Development? This is not a club!!! We are talking about the lives and savings of Americans that they were elected to serve.

There has never been a doubt that the US economy would rebound. My biggest concern has been with practices in moving forward that requires banks to be responsible for their actions so we will not be here again, where the bankers of the world continue to do business as usual. Their failed business models and practices, which seems to occur circularly, cause the American people to lose big on their investments never to return in their retirement portfolios. Many have lost their homes while Wall Street banks such as Goldman Sachs continue to double dip and set market prices with initiatives like mark to market. How long will such practices prevail?

If I were given billions of dollars in TARP both directly and indirectly, I myself might be able to post a profit in these very challenging economic times. (Does Goldman Sachs have to repay the $17.9 billion received from AIG as a counter party to bogus practices?) The question remains if there has been any fundamental change in how Wall Street banks do business that could bring the United States down. With practices like those of Goldman Sachs and other Wall Street banks, who needs foreign enemies?

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