Goldman Sachs is a financial institution that exists more than 100 years.
Bloomberg reports in March, 2011, "Goldman Sachs shares, which closed yesterday at $168.55, fell 0.4 percent in 2010 after doubling in 2009. They reached a peak of $247.92 in October 2007 and closed as low as $52 in November 2008. "
On the oficial site of Goldman Sachs reports earnings per common share in 2011 first quarter were $4.38.
Goldmans receives $10 billion as TARP money. They also got $13 billion from AIF bailout money. That means the goverment bailed AIG and AIG paid Goldman Sachs from this money.
There are a lot of speculations regarding the fact that Goldman`s were the most interested organization and "the single largest beneficiary" of AIG bailout. The decision about supporting AIG was made in September 2008 by Henry Paulson, Geoege W. Bush Treasury Secretary and former Goldman`s CEO. The detailes of the meeting where former Goldman`s CEO and current Goldman`s CEO made a decision to bailout AIG have been undisclosed. But this decision brought $12,6 billion to Goldmans in the time of financial crisis.
Goldman Sachs bought hundreds of thousands subprime mortgages. many of this mortgages were from unreliable lenders. The agents fooled people to sell them the mortgage:"loan agents promised applicants that they could buy a $600,000 house for payments of $1,200 a month, and the buyers "never read the fine print ... (and) didn't know their interest would increase and that eventually they would lose their house and their money." Goldmans bought these mortgages and packed them into high-yeild bonds. They sold them to the clients and other companies as good investments and played against them on the market at the same time. Now the question is whether it will be possible for federal prosecuters to prove they did it deliberately and were fully aware of what they are doing. It is not easy to prove, but some experts say it is possible is case there is political will to put Goldmans under investigation.
That speaks to a lot of shady deals. Totally wouldn't put it past some companies. Fortunately with the Freedom of Information act those documents will, at some point, be release and we'll know what agreements were made. One thing though is how has Goldman Sachs paid back their debt, if at all?
ReplyDeleteHey Lina. Thanks for your comment. I think you are right. They are "too big too fail" as you said.
ReplyDeleteBut, do you know why U.S. government still helped them even though there were too "greedy?" That is because it would cause more effects in insurance field if nobody helped them because insurance company would still be responsible for the big guys.
So U.S. government was focusing on a long-term strategy.