Times are Good at Goldman Sachs

[deception]

http://www.guardian.co.uk/business/2009/jul/14/goldman-sachs-profits-bonuses

The investment bank Goldman Sachs delivered a clear signal that the good times are returning on Wall Street by milking a recovery in financial markets to generate profits of $3.44bn (£2.12bn), raising the prospect of average pay packages of as much as $900,000 for its employees.

Goldman's second-quarter earnings, which amounted to $38m per day, were up 65% on 2008 and confirmed the US bank's status as one of the stand-out winners from the credit crunch which paralysed the financial industry for much of last year.

The firm's revenue of $13.76bn was the highest in its 140-year history. Its success on the trading floor is likely to translate into record bonuses, to the dismay of critics who view runaway compensation as a key factor contributing to the global economic meltdown.

During the quarter, Goldman dedicated 49% of its revenue to paying its staff – amounting to a compensation fund of $6.65bn, or $226,000 for each of its 29,200 staff. If the bank's bottom line prospers to the same degree for the rest of the year, employees could end up with average annual pay of more than $900,000 – an increase of nearly 150% on last year's figure of $363,000.

Goldman's success has generated its fair share of detractors. Critics point out that the bank was the biggest counterparty in financial insurance policies to the insurer AIG and that its collateral calls contributed to the US company's collapse, requiring AIG to seek $150bn of government aid.

Furthermore, Goldman itself received $10bn from the US government's troubled asset relief fund, which it paid back last month to avoid any further caps on dividends or remuneration. The firm converted to a 'bank holding company' last year, allowing it to take retail deposits, as the business model of a standalone Wall Street bank came under threat.

A leading US labour organisation, the Service Employees International Union, said Goldman's pay practices are a strong argument for root and branch change in Wall Street's compensation policy to end a culture of rewarding bankers for taking risks.

Stephen Lerner, director of the SEIU's financial reform campaign said: "They have some kind of moral and economic amnesia. After we bail them out with tens of billions in taxpayers' funds, they go back to exactly the same practices as before."

Analysts say that Wall Street trading houses face less vibrant competition after the demise of rivals such as Bear Stearns and Lehman Brothers, making it slightly easier to gain a financial edge. Gerard Cassidy, a banking analyst at RBC Capital Markets, said Goldman's brand, viewed as trustworthy, and its ability to attract top talent contribute to the firm's success.

-these guys are getting a 150% pay hike and I dont even get a fucking call back from prospective employers

 

[Colonel Ronan]

Jesus, tell 'em to give me a couple of grand!

 

[maxiep]

As a former Goldman employee, I'm happy to hear the profits of the firm are being passed through to its hardworking people.

 

[deception]

As a former Goldman employee, I'm happy to hear the profits of the firm are being passed through to its hardworking people.

let me give u some perspective, ex goldman sachs employee

1) the govt bailed them out and as a consequence they remained solvent. thank the govt!!!

2) the optics of rewarding yourself with such extravagant bonuses creates 1) dissident shareholders (not good in any scenario) 2) and simultaneously enrages the taxpayer

 

[maxiep]

let me give u some perspective, ex goldman sachs employee

Why is the fact I used to work for GS at all funny?

And let me give YOU some perspective.

1) the govt bailed them out and as a consequence they remained solvent. thank the govt!!!

Goldman didn't want to take the money; they didn't need it. It's why they're pretty much the only I-Bank left standing alone. Hank Paulson (the former GS CEO) forced them to take it. They didn't have the trading exposure other I-Banks did and they couldn't wait to pay it back. GS would have been just fine without the money. And that's not speculation, that's a fact coming straight from the company. As a shareholder and a former employee, it's not only confirmed in the 10Q's, but also from people inside the company.

2) the optics of rewarding yourself with such extravagant bonuses creates 1) dissident shareholders (not good in any scenario) 2) and simultaneously enrages the taxpayer

Why do you believe those bonuses were "extravagant"? Do you have any idea how hard you have to work to get to GS and how much harder you have to work once you get there? I assure you, it's not a group of people who have had it easy in live. GS selects people who have proven that they've pulled themselves up by their own bootstraps. Most GS employees come from nothing and are willing to work harder than you can imagine to ensure they make a better life for themselves and their families.

Those people not only make GS money (your compensation is based on your personal contribution), but they also grease the skids of the economy by raising debt and equity for companies as well as helping other firms merge and acquire. You let me know where all the outrage is among these "dissident shareholders" and exactly how many shares they hold? Warren Buffett--who has invested $5B in warrants hasn't been bothered by it.

As for outraging the taxpayer, what should really outrage them is how the Federal Government forced GS to take the money when they didn't need it. The American people are damned lucky GS used that extra money and turned it into a 23% return. You're not going to find a return like that anywhere else in the Government.

And why do you believe people hate other people who make money? The tallest blade of grass is the first to meet the scythe? That's a Russian point of view, not an American one. Here, we applaud those who make successes of themselves and hope to emulate them.

I've read many of your posts, and like our President, you seem to find it easy to arrive at a conclusion that fits your socialist philosophy without actually understanding the facts. Good luck with that.

 

[Shapecity]

I agree with maxiep ibankers work extremely hard and earn those bonuses for the most part. You're easily doing 80 to 100 hours a week as an ibanker which is the equivalent to working two jobs. I used to work an ibanking job and the experience was great, but I left after only two years because I didn't like the lifestyle I had and looking at the people above me I didn't like their lifestyle either. Not much balance and a lot of broken marriages.

 

[maxiep]

I agree with maxiep ibankers work extremely hard and earn those bonuses for the most part. You're easily doing 80 to 100 hours a week as an ibanker which is the equivalent to working two jobs. I used to work an ibanking job and the experience was great, but I left after only two years because I didn't like the lifestyle I had and looking at the people above me I didn't like their lifestyle either. Not much balance and a lot of broken marriages.

SC, thank you. You are smarter than I was by getting out earlier than I did. What I-Bankers make (especially in the corp fin functions) is basically the price for your life. Because after sleep, eating and picking up your dry cleaning, there are no other hours left.

 

[deception]

Why is the fact I used to work for GS at all funny?

And let me give YOU some perspective.



Goldman didn't want to take the money; they didn't need it. It's why they're pretty much the only I-Bank left standing alone. Hank Paulson (the former GS CEO) forced them to take it. They didn't have the trading exposure other I-Banks did and they couldn't wait to pay it back. GS would have been just fine without the money. And that's not speculation, that's a fact coming straight from the company. As a shareholder and a former employee, it's not only confirmed in the 10Q's, but also from people inside the company.



Why do you believe those bonuses were "extravagant"? Do you have any idea how hard you have to work to get to GS and how much harder you have to work once you get there? I assure you, it's not a group of people who have had it easy in live. GS selects people who have proven that they've pulled themselves up by their own bootstraps. Most GS employees come from nothing and are willing to work harder than you can imagine to ensure they make a better life for themselves and their families.

Those people not only make GS money (your compensation is based on your personal contribution), but they also grease the skids of the economy by raising debt and equity for companies as well as helping other firms merge and acquire. You let me know where all the outrage is among these "dissident shareholders" and exactly how many shares they hold? Warren Buffett--who has invested $5B in warrants hasn't been bothered by it.

As for outraging the taxpayer, what should really outrage them is how the Federal Government forced GS to take the money when they didn't need it. The American people are damned lucky GS used that extra money and turned it into a 23% return. You're not going to find a return like that anywhere else in the Government.

And why do you believe people hate other people who make money? The tallest blade of grass is the first to meet the scythe? That's a Russian point of view, not an American one. Here, we applaud those who make successes of themselves and hope to emulate them.

I've read many of your posts, and like our President, you seem to find it easy to arrive at a conclusion that fits your socialist philosophy without actually understanding the facts. Good luck with that.

im not a socialist. besides- labels do very little to advance the debate. and your president is the only reason why america says afloat- imagine if u had a senile mccain and a moron like palin running around washington making decisions now.

so goldman sachs was coerced into accepting tarp, along with their restrictive covenants (i.e. capping executive pay)? lets accept your theory and your purported inside knowledge of goldman sachs- the only reason why the company is thriving is because it received an infusion of capital below market lending rates. the govt propped it up, any way u look at it.

ppl are outraged when andre miller signs for 21 million; why wouldnt they exhibit the same outrage for goldman sachs employees who were betting on their taxpayer dollars and subsequently profiting off it?