Wednesday, April 15, 2009
How Goldman Posted a Profitable Quarter: They "Skipped" December
Nouriel Roubini wrote in March that Goldman Sachs was insolvent:
So for the Treasury to hide behind the "systemic risk" excuse to fork out another $30 billion to AIG is a polite way to say that without such a bailout (and another half-dozen government bailout programs such as TAF, TSLF, PDCF, TARP, TALF and a program that allowed $170 billion of additional debt borrowing by banks and other broker-dealers, with a full government guarantee), Goldman Sachs and every other broker-dealer and major U.S. bank would already be fully insolvent today.
Yet Goldman reported a $1.7 billion dollar profit for last quarter.
How did Goldman do it?
Well, as Floyd Norris - chief financial correspondent for the New York Times - explains, Goldman simply didn't report results for December 2008, a month in which it took huge write-downs.
Update: Congressman Grayson is talking about this as well.
3 comments:
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I am appalled by these greedy money grubbing (so called) banks ... I think that if the government needed to give them bail out money in the first place, it was given to them to be used in a way so that they could fool wall street investors into believing that the economy must be turning around for the better, and therefore the investors would then not be afraid to start investing again into a bear market, where eventually the wealthier billionaires will be able to skim off the profits and not leave much, or any profit, for the less wealthier people to be able to also profit from their investments.
ReplyDeleteEnron style accounting is now the norm on Wall Street.
ReplyDeleteGotta hook the marks into coming back inside the tent so they can play the latest new and improved game of "Three Card Monte."
As my ol' Grandpappy used to say..."Banks belong up back ally's with brothels". He then would keep his money in a chest under his bed. "Never have tusted 'em and never will" he would add. And I used to think he was stupid.
ReplyDelete