The More Things Change . . .
Why am I not surprised at this?
Just a year after surviving the financial crisis with billions in federal aid, the banking giant Goldman Sachs reported results Thursday that topped expectations.
Goldman said that it earned $3.19 billion in the third quarter, powered by mergers and acquisitions fees and strong securities trading. Revenue was $12.37 billion.
Sure, they had a good quarter. But then there's this:
Goldman also disclosed how much it had set aside for its annual bonus pool. It said that it had earmarked $5.35 billion in compensation and benefits, an increase from the year earlier period, putting it on course for a record payout to its executives by the end of 2009.
Tried to get a new mortgage lately? How'd that go? Did this bailout for Wall Street free up the credit markets for Main Street?
But the return to big profits and hefty bonuses will raise questions for Washington policy makers. They come even as memories are still fresh that just a year ago taxpayers had to step in to save Goldman and other banks on Wall Street.
Earlier this year, Goldman paid back $10 billion in federal aid that it received last fall under the government’s Troubled Asset Relief Program.
But in addition, Goldman, along with other banks, benefited from a government program that allowed it to issue debt cheaply with the backing of the Federal Deposit Insurance Corporation. And it received money from the government’s bailout of the American International Group, the insurance giant, receiving 100 cents on the dollar for its $13 billion counterparty exposure to the insurer.
Ah yes, AIG. You'll remember that the Obama Administration made sure that AIG had all the capital it needed - to pass along to Goldman Sachs and European lenders. And now Goldman Sachs is very healthy, paid no price for its role in the crash, and yet Main Street is still without credit. I'm sure those new regulations will help - oh wait, we still don't have any new regulations.