Friday, December 17, 2010

Fed's bailout of Goldman Sachs nothing but massive wealth transfer from American taxpayers to incompetent crony capitalists

From:
Totally Busted: The Truth About Goldman's Bailout by the Fed

(Economic Policy Journal) -- by Eric Fry --

Recent disclosures from the Federal Reserve reveal that honesty was one of the earliest casualties of the 2008 financial crisis. These disclosures contain a number of juicy tidbits, like the fact that Goldman Sachs received tens of billions of dollars in direct and indirect succor from the Fed.

Thanks to these spectacularly large taxpayer-funded bailouts, Goldman was able to continue “doing God’s Work” – as CEO Lloyd Blankfein infamously remarked – like the work of producing billion-dollar trading profits without ever suffering a single day of losses.

Thanks to the Fed’s massive, undisclosed assistance, Goldman Sachs managed to project an image of financial well-being, even while accessing tens of billions of dollars of direct assistance from the Federal Reserve.

By repaying its TARP loan, for example, Goldman wriggled out from under the nettlesome compensation limits imposed by TARP, while also conveying an image of financial strength. But this “strength” was illusory. Goldman repaid the TARP loans with funds it procured days earlier from the Federal Reserve. Then, over the ensuing months, Goldman recapitalized its balance sheet by selling tens of billions of dollars of mortgage-backed securities to the Fed.

And the public never knew anything about these activities until two weeks ago, when the Fed was forced to reveal them...MORE...LINK
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Related: Incompetent and corrupt Goldman Sachs gets $111 million of taxpayer money in bonuses
Goldman Sachs pay out $111million in bonuses despite taking billions in bailout money
By Daniel Bates, Daily Mail

Goldman Sachs bosses are to pick up $111million in bonuses in an 'outrageous' pay deal that flies in the face of the worst recession for 80 years.

The investment banks' chief executive Lloyd Blankfein and president Gary Cohn will get $24million each under the bumper agreement that will see thousands of others get huge rewards.

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