Antichrist Lloyd Blankfein Up Close and Personal

Lloyd Blankfein is the CEO of Goldman Sachs.

He replaced Henry Paulson, who went on to assist the Bush administration in it’s demolishing of the economy.

Blankfein earned a total compensation in 2008 of $53,965,418.
Base salary – $600,000
Cash Bonus – $26,985,474
Stock – $15,542,756
Options – $10,453,031

He declared in an interview that he was doing “God’s work”.

He suggested that Goldman would have been fine without financial assistance from the feds.

Goldman recieved $10 billion in direct aid from the US government.

The Financial Times chose Lloyd C. Blankfein as its person of the year.

He suggested that Goldman’s employees make more than everyone else because they’re better than everyone else. This resulted in massive bonuses.

Goldman Sachs gave out $4.82 billion in bonuses in 2008, despite earnings of only $2.32 billion that year.

Goldman’s revenue in 2008 was 22.2 billion and net earnings were 2.3 billion.

Blankfein is the poster boy for Wall Street’s incredible craving for massive profits.

After helping impact the global financial crisis to the tune of several trillion dollars he said that Goldman regretted any damage they may have committed and apologized.

The public was outraged, but unfortunately most were represented in Congress by a bunch of spineless, worthless cowards.

Today Goldman is a money machine, massive profits, massive bonuses, massive arrogance and a distinct lack of any perceivable code of ethics.

And in gratitude to the public that kept it afloat, kept the limos and private jets running, kept the pay scale far above what any single person is worth, kept it’s customers in a suicidal state and flipped the bird at regulatory agencies everywhere, it’s response is a heart felt “fuck you very much”.

Suckers

Goldman Sachs take over the rights to Earth!!

        


                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     In a complicated financial maneuver, Goldman Sachs today took over the rights to Earth.

The rangling of the Earth from the Meek began in 1999 with the repeal of the Glass-Steagall Act. Starting in 2004, predatory lenders began targeting the Meek, offering unheard-of deals on home loans. The Meek - unaware their inheritance would be used as collateral - then began foreclosing on their homes at a dramatic pace. Last week, the threshold was passed, giving Goldman Sachs a plus-50% holding of the planet at the time of their deaths.

“Once again Goldman Sachs has proven to be a leader in world markets, in this case literally,” said Former Goldman Sachs CEO Henry Paulson. “The economy and the planet are in better hands with Goldman Sachs.”

For the most part, reaction from the Meek has been mostly muted.

“Meh, whatever,” said Noted Meek Tim Johnson of Tupelo, Miss. “I never expected to see that inheritance anyway.”

Goldman Sachs announced the opening of a new division called simply “The Planet.” The Planet will be publicly traded, with shares of the Earth available for $87.45 at the IPO to be held later this week.

Just keeps gettin' better... And why more people care?!

By Christine Harper

Dec. 21 (Bloomberg) -- In the first six months of 2010, about 6,000 employees of Goldman Sachs Group Inc. will take a break from their spreadsheets and move across the southern tip of Manhattan to a new 43-story, steel-and-glass skyscraper.

The building was a bargain -- and not just because the final cost is expected to be $200 million less than the $2.3 billion price the company had estimated when construction began in November 2005. Goldman Sachs also benefited from the government’s determination to avoid losing jobs in lower Manhattan after the Sept. 11, 2001, terrorist attacks.
Building a new headquarters cater-cornered to where the World Trade Center once stood qualified the firm to sell $1 billion of tax-free Liberty Bonds and get about $49 million of job-grant funds, tax exemptions and energy discounts. Henry Paulson, then Goldman Sachs’s chief executive officer, threatened to abandon the project after delays in addressing his concerns about safety. To keep the plan on track, state and city officials raised the bond ceiling to $1.65 billion and added $66 million in benefits. The interest expense on the financing is about $175 million less over 30 years than if the company had issued corporate debt at the time, according to data compiled by Bloomberg.
“It was absolutely imperative that Goldman Sachs keep its world headquarters downtown,” says John Cahill, who took part in the negotiations as chief of staff to then-Governor George Pataki and now works at New York law firm Chadbourne & Parke LLP. “They had the financial resources to move anywhere.”
Unprecedented Aid
Goldman Sachs, which set a Wall Street profit record of $11.6 billion in 2007 and may have earned $11.4 billion this year, according to the average estimate of 15 analysts surveyed by Bloomberg, won new and larger concessions from taxpayers in 2008. This time it was the threat of a financial meltdown that prompted the U.S. government, with Paulson as Treasury secretary, and the Federal Reserve to supply an unprecedented amount of aid to firms deemed critical to the financial system, including Goldman Sachs.
The 140-year-old company received $10 billion in capital, guarantees on about $30 billion of debt and the ability to borrow cheaply from the Fed. The Fed’s bailout of American International Group Inc., and its decision to pay the insurer’s counterparties in full, funneled an additional $12.9 billion to Goldman Sachs.
“What was done was appropriate because the potential costs of not doing that were probably exceedingly high,” says Gary Stern, who stepped down in August as president of the Federal Reserve Bank of Minneapolis. “It certainly looked very threatening.”
‘Bad Deal’
That’s not how the Goldman Sachs rescue looks to William Black, a professor of economics and law at the University of Missouri-Kansas City and a former bank regulator. He says the government has been far too generous in allowing the firm to get federal backing without either seizing equity or curbing risks.
“It’s just an unbelievably bad deal,” Black says. “We could hire any middle-tier guy or gal at Goldman, and they would tell us within 15 seconds that the deal we have made as a nation with Goldman is underpriced by many, many orders of magnitude and that we are insane.”
During the past year, Goldman Sachs’s profits and compensation outstripped those of its rivals. The firm, now the nation’s fifth-largest bank by assets, reported a record $8.44 billion in earnings for the first nine months of 2009 after setting aside $16.7 billion to pay employees. That comes to $527,192 for each person on the payroll, almost eight times the median U.S. household income.
Public Anger
The company’s stock is up 93 percent this year, above its price before Lehman Brothers Holdings Inc. collapsed. Meanwhile, the U.S. unemployment rate hit a 26-year high of 10.2 percent in October before dropping to 10 percent in November.
The perception that Goldman Sachs has profited at the expense of taxpayers has fueled public anger -- even jabs from the television comedy show “Saturday Night Live.” Rolling Stone writer Matt Taibbi described the firm this year as “a great vampire squid wrapped around the face of humanity.” Conservative television commentator Glenn Beck devoted a 10- minute segment in July to diagramming Goldman Sachs’s connections to the government and arguing that taxpayers were being spun in “a web of lies.”
Bonus Plan
“People are just really angry; you can see it on the left and the right,” says Andy Stern, president of the 2.1 million- member Service Employees International Union, who led about 200 protesters outside Goldman Sachs’s Washington office on Nov. 16 to demand that the firm cancel its year-end bonuses and repay taxpayers instead. Some carried “Wanted” posters with pictures of Chairman and CEO Lloyd Blankfein.
The firm has made attempts to placate critics. On Nov. 17, it announced a five-year, $500 million program to provide education, capital and other forms of support to small businesses. On Dec. 10, it promised to pay the bonuses of the firm’s top 30 executives only in stock that they can’t sell for five years.
To Blankfein, the 55-year-old postal worker’s son who earned $68.5 million in 2007, the firm’s ability to generate profits and reward employees is a boon to society.
“Our shareholders are pensioners, mutual funds and individual investors, and they’re all taxpayers,” Blankfein told investors at a Nov. 10 conference hosted by Bank of America Corp. in New York. “The people of Goldman Sachs are one of the most productive workforces in the world.”
No ATMs
What Goldman Sachs’s workforce produces is different from what employees do at other financial institutions, leading some people to question why the firm is entitled to taxpayer support. It doesn’t operate branches or automated-teller machines. Only millionaires can open checking accounts. Instead, Goldman Sachs exists to serve large corporations, governments, institutions and wealthy individuals.
It makes money for them and for itself by trading assets ranging from stocks and bonds to oil futures and credit derivatives. In the first nine months of 2009, more than 90 percent of the company’s pretax earnings came from trading and principal investments, which include market bets, stakes in corporate debt and equity, and assets such as power plants.
“People who know the industry and know Goldman Sachs know that it is a giant hedge fund, but it’s wrapped in an investment banking wrapper,” says Samuel Hayes, a professor emeritus of investment banking at Harvard Business School in Boston. The public “would be horrified to think that their tax dollars were going to a hedge fund.”
Repaying TARP
Goldman Sachs repaid the $10 billion it received in October 2008 from the U.S. Treasury’s Troubled Asset Relief Program, and taxpayers got a return: $318 million in preferred dividends and $1.1 billion to cancel warrants to buy company stock the government was granted. Goldman Sachs says that’s a 23 percent annualized return for U.S. taxpayers, according to the firm’s calculation.
Other forms of support linger. By the end of September, Goldman Sachs’s $189.7 billion of long-term unsecured borrowings included $20.9 billion guaranteed by the Federal Deposit Insurance Corp. under a program started in October 2008 to unfreeze credit markets, according to the firm’s most recent quarterly filing. Most importantly, the Federal Reserve agreed on Sept. 21, 2008, to allow Goldman Sachs and smaller rival Morgan Stanley to become bank holding companies, giving them access to the Fed’s discount window and granting them a cheap source of borrowing traditionally reserved for commercial banks.
Interest Expense
“The issue that people have focused on -- TARP and the payback of TARP money -- is insignificant compared with the way they’ve been able to use federally guaranteed programs and their access to the Fed window,” says Peter Solomon, founder of New York-based investment bank Peter J. Solomon Co.
Those benefits, along with a drop in the Fed’s benchmark borrowing rate to as low as zero, have slashed Goldman Sachs’s interest costs to the lowest this decade, though its debt was higher in the first nine months of 2009 than in any comparable period except the previous two years. For those three quarters, the firm’s interest expense fell to $5.19 billion from $26.1 billion a year earlier.
“You can’t give a small group of firms this privilege, where they get free money from the Fed and a taxpayer guarantee and they can run the biggest hedge fund in the world,” Niall Ferguson, a professor of history at Harvard University and author of “The Ascent of Money: A Financial History of the World,” said at a Nov. 18 panel discussion in New York.
‘Using Your Money’
That view is shared by Solomon. “Everybody thinks they’re a bank, but they’re a hedge fund,” he says. “The difference is that this year they’re using your money to do it.”
Lucas van Praag, the partner responsible for the firm’s communications and the only Goldman Sachs executive willing to comment for this story, denies any similarity to hedge funds, the mostly private and unregulated pools of capital that managers use to buy or sell assets while participating in the profits.
“The assertion that we’re a hedge fund displays a substantial misunderstanding of our business,” says van Praag, 59, a British-born former public relations executive who joined Goldman Sachs after it went public in 1999. “We are in business primarily to facilitate transactions for our clients, and over 90 percent of our revenue and earnings come from doing that.”
Proprietary Trading
Proprietary trading, in which Goldman Sachs employees make bets with the company’s own money, has contributed only 12 percent of the firm’s revenue since 2003, van Praag says. Still, fixed-income, currency, commodity and some equity trading that takes place off exchanges blurs the line between client-driven transactions and proprietary wagers, says Brad Hintz, an analyst at Sanford C. Bernstein & Co. in New York who rates Goldman Sachs stock “outperform.”
“It’s coming onto my balance sheet, I’m owning it and then I’m selling it,” Hintz says. “The fact that I’m taking a position means I’m taking risk, and if I’m taking risk, then I’m taking a proprietary bet.”
If Goldman Sachs agrees to buy $1 billion of mortgages that a client wants to sell and then decides to keep the mortgages, it’s not easy to determine whether that trade is aimed at helping a client or is a proprietary investment decision, Hintz says.
Van Praag says that Goldman Sachs, unlike some other banks, was never in imminent danger of going out of business during the financial crisis unless the entire system was allowed to implode.
‘We Didn’t Wait’
“We had cash and funding that would have allowed us to survive for quite a long time, even assuming that counterparties had decided to stop providing financing,” van Praag says. “When markets became very difficult, we didn’t wait for the government to act. We went out and raised money in the private sector.”
Two days after winning the Fed’s approval to become a bank holding company, Goldman Sachs sold $5 billion of preferred stock to billionaire Warren Buffett’s Berkshire Hathaway Inc. and then raised another $5.75 billion by selling common stock to the public. Those deals, plus a $5.75 billion public offering in April 2009, helped raise shareholder equity to $65.4 billion from $45.6 billion in August 2008.
Goldman Sachs also cut the amount of assets it owns to $882 billion from $1.08 trillion before the Lehman collapse. The firm holds $167 billion in cash or near-cash instruments, up from about $102 billion at the end of August 2008, which it can use to pay off debts if creditors stop making loans.
‘Classic Bank Run’
Treasury Secretary Timothy Geithner said in an interview with Bloomberg Television on Dec. 4 that no bank would have survived without the government’s help.
“The entire U.S. financial system and all the major firms in the country, and even small banks across the country, were at that moment at the middle of a classic run -- a classic bank run,” he said.
Since the government stepped in, investors have been more willing to lend money to Goldman Sachs. The premium bondholders charge to own the firm’s bonds that mature in April 2018 instead of U.S. Treasuries of the same maturity has shrunk to less than 1.5 percentage points from as much as 6.8 percentage points on Nov. 20, 2008, according to data compiled by Trace, the bond- price reporting system of the Financial Industry Regulatory Authority. The spread isn’t as narrow as the 0.99 percentage point premium to Treasuries that Goldman paid on new 10-year bonds in January 2006, the data show.
‘Backstopped’
At an Oct. 15 breakfast sponsored by Fortune magazine, Blankfein said that market prices prove that investors don’t think the bank has a government guarantee.
“We’re not exactly borrowing at the government rate,” he said. “The market isn’t behaving that way.”
Sean Egan -- co-founder of Haverford, Pennsylvania-based Egan-Jones Ratings Co., which in October gave Goldman Sachs an AA rating, its third highest -- has a different view.
“We’re in the business of doing credit analysis, and we’ve come to the conclusion that essentially Goldman Sachs is backstopped,” Egan says.
William Larkin, who manages about $250 million in fixed- income investments at Cabot Money Management Inc. in Salem, Massachusetts, says he owns Goldman Sachs bonds partly because he thinks the company won’t be allowed to go out of business.
“They would be bailed out” if anything went wrong, Larkin says. “Goldman right now is in a catbird seat because it’s very important to keep them healthy.”
Fewer Competitors
Chief Financial Officer David Viniar takes issue with the idea that the firm continues to benefit from an implied guarantee by the U.S. government.
“We operate as an independent financial institution that stands on our own two feet,” Viniar, 54, told reporters on an Oct. 15 conference call. “We don’t think we have a guarantee.”
The firm has grown more dominant in the past year, increasing its market share, Viniar told analysts on Oct. 15. It has benefited from having fewer competitors -- Bear Stearns Cos., Merrill Lynch & Co. and Lehman Brothers were all subsumed into other banks during the financial crisis -- while larger rivals such as Citigroup Inc. and UBS AG have been hobbled by writedowns and a lower appetite for risk.
“The crisis has created an oligopoly,” says Solomon, who founded his firm in 1989 after leaving Lehman Brothers.
Value-at-Risk
Goldman Sachs has also increased the size of the bets it’s making. Its value-at-risk -- an estimate of how much the trading desk could lose in a single day -- jumped to an average of $231 million in the first nine months of 2009, a record for the firm. At the end of September, the company estimated that a 10 percent drop in corporate equity held by its merchant-banking funds would cost it $1.04 billion, up from $987 million at the end of June.
Revenue generated by trading and investing, the most unpredictable part of Goldman Sachs’s business, accounted for 79 percent of the firm’s revenue in the first nine months of 2009, up from 28 percent in 1998. Early the next year, before Goldman Sachs’s initial public offering, executives, led by Paulson, told investors the company would try to decrease the percentage.
The government is acting schizophrenically by arguing that Goldman Sachs needs taxpayer support because it poses a risk to the financial system at the same time as it’s failing to do anything to curtail that risk, says Nobel Prize-winning economist Joseph Stiglitz, who teaches at Columbia University in New York.
“We say they’re too big to fail, but we refuse to do anything about their being too big to fail,” Stiglitz says. “We say that they represent systemic risk, but we don’t regulate them effectively.”
‘Biggest Single Gift’
Stiglitz also points to the Fed’s $182.3 billion AIG bailout as an example of how policy has been tilted to support Goldman Sachs.
“The biggest single gift was the AIG rescue,” he says. “No one has ever provided a good argument for why we did it other than we were bailing out Goldman Sachs.”
On Sept. 16, 2008, a day after Lehman filed the biggest bankruptcy in U.S. history, the Fed authorized Geithner, then president of the Federal Reserve Bank of New York, to lend $85 billion to help AIG avoid a similar fate by allowing it to continue to post collateral owed on contracts and to settle securities-lending agreements. Geithner later told a Congressional Oversight Panel that the government acted because “the entire system was at risk.”
$12.9 Billion
In November, the Fed created two entities: Maiden Lane II to repurchase securities that had been lent out in return for cash, and Maiden Lane III to purchase collateralized-debt obligations so AIG could cancel the credit-default swaps, similar to insurance policies, it had written on them. In the latter program, the Fed allowed the counterparties to settle contracts at 100 percent of their value.
Goldman Sachs was the biggest beneficiary, receiving a total of $12.9 billion in cash, consisting of $5.6 billion to cancel insurance on CDOs, $4.8 billion to repurchase securities and $2.5 billion of collateral.
If Goldman Sachs and AIG’s other counterparties hadn’t been paid off in full by the Fed, they might have taken losses on their contracts.
Other bond insurers had canceled agreements by paying less than par. Merrill Lynch accepted $500 million from Security Capital Assurance Ltd. in late July 2008 to tear up contracts guaranteeing $3.7 billion of CDOs. On Aug. 1, 2008, Citigroup agreed to accept $850 million from bond insurer Ambac Financial Group Inc. to cancel a guarantee on a $1.4 billion CDO.
Barofsky Report
In a Nov. 16 report on the AIG bailout, Neil Barofsky, special inspector general for TARP, said the Fed tried for two days to negotiate with counterparties, an effort that failed because the Fed felt obliged to make any discounts voluntary and because French counterparties said they couldn’t legally be required to comply. Goldman Sachs refused to negotiate because it felt it was hedged if AIG failed to pay, Barofsky wrote.
“Notwithstanding the additional credit protection it received in the market, Goldman Sachs (as well as the market as a whole) received a benefit from Maiden Lane III and the continued viability of AIG,” Barofsky wrote. Goldman Sachs would have been saddled with the risk of further declines in the market value of about $4.3 billion in CDOs as well as some $5.5 billion of CDSs, he added.
‘Fascination With AIG’
Viniar, who held a conference call in March to answer questions about the firm’s relationship with AIG, said Goldman Sachs didn’t need a bailout because the firm’s hedges meant it faced no significant losses if AIG failed.
“I am mystified by this fascination with AIG,” he said in an interview in April. “In the context of Goldman Sachs, they’re one of thousands and thousands of counterparties, and the results of any trading with AIG are completely immaterial to what we do. Always have been, and always will be.”
Suspicions that the fix was in for Goldman Sachs have been fanned by the firm’s political connections.
Paulson worked at the company for 32 years, the last eight of them as CEO, before becoming Treasury secretary in 2006. Geithner selected former Goldman Sachs lobbyist Mark Patterson to serve as his chief of staff at Treasury. Stephen Friedman, a former senior partner who serves on the company’s board, stepped down as chairman of the New York Fed in May amid controversy over his purchases of the firm’s shares in December 2008 and January 2009 after it became a bank holding company regulated by the Fed. Geithner and Lawrence Summers, President Barack Obama’s National Economic Council director, worked earlier in their careers under former Treasury Secretary Robert Rubin, who was once co-chairman of Goldman Sachs. Geithner’s successor as New York Fed president is William Dudley, a former chief U.S. economist at Goldman Sachs.
Political Contributions
Goldman Sachs and its employees have donated $31.4 million to U.S. political parties since 1989, more than any other financial institution and the fourth-highest amount of any organization, according to the Center for Responsive Politics, a Washington research group.
Regulators and lawmakers are attempting to make changes that they say will protect taxpayers in the future. One proposal being considered by the U.S. Congress is to require financial institutions whose failure could cause a breakdown of the entire system to hold more liquid assets and a larger buffer of capital to help absorb losses.
The bill would also empower regulators to step in and liquidate a major financial institution, or merge it with another, rather than bail it out or let it collapse.
Safety Net
That’s not enough for Paul Volcker, the former Fed chairman who serves as an economic adviser to Obama. Volcker, 82, has argued that the government safety net should be limited to financial institutions that provide utilitylike services such as deposit taking and business-payment processing essential to economic functioning. All risk-taking functions should be done separately, he says.
“I do not think it reasonable that public money --taxpayer money -- be indirectly available to support risk-prone capital market activities simply because they are housed within a commercial-banking organization,” Volcker said in a Sept. 16 speech at a conference in California.
Asked about Goldman Sachs in a Dec. 11 interview in Berlin, Volcker said, “They can do trading and do anything they want, but then they shouldn’t have access to the safety net.”
Black, the former bank regulator, agrees.
“The answer is not to give these guarantees but to make sure there are no more systemically dangerous institutions,” he says. “They shouldn’t be allowed to grow, and of course, that’s what they’re doing right now. They’re mostly growing like crazy.”
Ground Zero
On a cold, rainy morning in December, rust-colored beams poke above a fence that surrounds the construction pit at Ground Zero in lower Manhattan. Across West Street, workers in yellow slickers are landscaping the strips that separate the entrance to Goldman Sachs’s new headquarters from the highway. In the lobby, a brightly colored abstract painting by Ethiopian- American artist Julie Mehretu, which cost about $5 million, greets employees who have already relocated.
The new building has twice as much space and costs 14 times as much as Goldman Sachs’s old headquarters a half mile (0.8 kilometer) away. Two American flags the size of bed sheets dominate the stone and concrete facade of the 30-story building at 85 Broad St., constructed almost three decades ago when Goldman Sachs was a private partnership with about 2,700 employees in New York.
In 1983, the year the firm moved in, it had pretax earnings of $462 million, one-twenty-fifth of what it made in 2007.
While Goldman Sachs has outgrown its old headquarters, one thing hasn’t changed: It’s still getting subsidies to remain in lower Manhattan. When it built 85 Broad St., the company received about $9 million in incentives to stay, according to a press report at the time. Now, it’s getting $115 million -- an amount dwarfed by the funds U.S. taxpayers provided in the heat of the 2008 financial crisis.
To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net

Who are these people?
I am not referring to the pathetic parents of "Balloon Boy," whose fake drama I have been unable to escape while on the treadmill this week, thanks to my gym's insistence on tuning its flat-screen TVs to Wolf Blitzer's nonstop self-parody.
The Colorado incident was significant only in the tawdriness of those who perpetrated the made-for-TV scam and their allies in the mindless media who covered this sham "reality" so relentlessly. But even so it was enough to push aside most consideration of the true hoax reported last week with far less fervor: the obscene rewards that Wall Street bankers bestowed upon themselves for ripping off our economy.
The people I want to know more about are the superrich who expect to be rewarded for their failures, like the folks at Goldman Sachs who will receive $16.71 billion in bonuses--an average of $530,000 per employee--this year after their company did as much as any to bring the world economy to the brink of disaster.
"The Guys from Goldman Sachs" is what The New York Times once called them in recognition of their chokehold on the federal government. Their power is marked by the two treasury secretaries who led the fight to legally enable and then reward Wall Street for its obscene excesses. Why wasn't there a CNN stakeout at the homes of former Goldman-execs-turned-treasury-chiefs Robert Rubin and Henry Paulson aimed at finding out how they feel about the almost $7 billion profit that Goldman Sachs made in the last two quarters in the wake of the government's bailout of the firm?
They were both deeply involved last fall, along with Rubin protégé and current Treasury Secretary Timothy Geithner, then head of the New York Fed, in saving Goldman as archrival Lehman Brothers was forced to go belly up. As opposed to Lehman, Goldman was allowed to change its status and become a commercial bank qualifying for Federal Reserve and TARP funding. Goldman received $10 billion in immediate bailout funds, and we are supposed to be grateful that the company has paid it back in return for an end to any pretense of government control over its executive compensation. The additional cool $12.9 billion that Goldman received from the government as a pass-through from the bailout of AIG to cover Goldman's toxic paper is money the investment bank has no intention of ever paying back.
The rationale for saving Goldman and the other too-big-to-fail usurers was that the rescue would increase lending to businesses and consumers and thus revive the economy. But Goldman made money last quarter by shunning such loans and instead putting the government-guaranteed low-interest money it now can borrow toward acquisitions and bond and stock trading. As The New York Times reported: "Titans like Goldman Sachs and JPMorgan Chase are making fortunes in hot areas like trading stocks and bonds, rather than the ho-hum business of lending people money."
Under the headline "Bailout Helps Fuel a New Era of Wall Street Wealth," Times reporter Graham Bowley detailed many of the enabling favors that the government, under two presidents, extended to Goldman, like clearing the way for the company to issue bonds guaranteed by the FDIC. "It may come as a surprise that one of the most powerful forces driving the resurgence on Wall Street," the Times reported, "is not the banks but Washington. Many of the steps that policy makers took last year to stabilize the financial system--reducing interest rates to near zero, bolstering big banks with taxpayer money, guaranteeing billions of dollars of financial institution debts--helped set the stage for this new era of Wall Street wealth."
It should not come as a surprise to Timothy Geithner, who, as The Wall Street Journal reported last week, talks to the honchos of Goldman more often than to members of Congress ostensibly in charge of banking legislation. Nor will it shock the lobbyists for Wall Street--augmented, as The Nation reported last week, by the pro-Goldman efforts of former Democratic congressman and faux populist Dick Gephardt--that the rich will emerge richer from this deep recession in which so many Americans have lost everything. The die is cast: People working in finance grabbed two-thirds of the growth in GDP, with the rest of us scrambling for the other third.
Nor will the situation change anytime soon. The House Financial Services Committee is in charge of writing new rules to protect consumers, but as the respected Sunlight Foundation reports, 27 of the 71 members of that committee receive at least one-fourth of their campaign funds from the financial industry, with the rest of the committee members not far behind.
Now if we could get one of the banking lobbyists to float a duct-taped flying saucer balloon, Wolf Blitzer might cover the real hoax.

Read more at: http://www.huffingtonpost.com/robert-scheer/zooming-in-on-the-years-b_b_328174.html

Pissed off and pitchforked

Geithner Aides Reaped Millions Working for Banks, Hedge Funds


By Robert Schmidt

Oct. 14 (Bloomberg) -- Some of Treasury Secretary Timothy Geithner’s closest aides, none of whom faced Senate confirmation, earned millions of dollars a year working for Goldman Sachs Group Inc., Citigroup Inc. and other Wall Street firms, according to financial disclosure forms.

The advisers include Gene Sperling, who last year took in $887,727 from Goldman Sachs and $158,000 for speeches mostly to financial companies, including the firm run by accused Ponzi scheme mastermind R. Allen Stanford. Another top aide, Lee Sachs, reported more than $3 million in salary and partnership income from Mariner Investment Group, a New York hedge fund.

As part of Geithner’s kitchen cabinet, Sperling and Sachs wield influence behind the scenes at the Treasury Department, where they help oversee the $700 billion banking rescue and craft executive pay rules and the revamp of financial regulations. Yet they haven’t faced the public scrutiny given to Senate-confirmed appointees, nor are they compelled to testify in Congress to defend or explain the Treasury’s policies.

“These people are incredibly smart, they’re incredibly talented and they bring knowledge,” said Bill Brown, a visiting professor at Duke University School of Law and former managing director at Morgan Stanley. “The risk is they will further exacerbate the problem of our regulators identifying with Wall Street.”

While it isn’t unusual for Treasury officials to come from the financial industry, President Barack Obama has been critical of Wall Street, blaming its high-risk, high-pay culture for helping cause the financial-market meltdown.

‘Reckless Behavior’

Speaking to financial executives last month, Obama said: “We will not go back to the days of reckless behavior and unchecked excess that was at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses.”

At the same time, the president has promised to change Washington by keeping lobbyists for special interests at a distance and by making decisions in the open.

Sperling and Sachs are each paid $162,900 at the Treasury. Along with four others, they hold the title of counselor to Geithner. Sachs, 46, withdrew earlier this year from consideration to be the Treasury’s top domestic finance official, a job that would have required Senate confirmation.

Geithner’s predecessor, Henry Paulson, brought on a coterie of non-confirmed advisers from Goldman Sachs at the end of his term. Paulson, who had been the firm’s chief executive officer, defended the arrangement as necessary to quickly bring in top talent when the financial system was on the verge of collapse.

Awaiting Confirmation

The title of counselor had been generally reserved for those awaiting confirmation. Some of Geithner’s aides now work in that capacity, including Lael Brainard, who has been nominated to be undersecretary for international affairs, and Jeffrey Goldstein, the nominee to be undersecretary for domestic finance.

“The use of counselors provides an opportunity to bring valuable expertise into the department to serve in a close capacity with the secretary,” said Rob Nichols, a former Treasury official under Secretaries Paul O’Neill and John Snow, neither of whom relied extensively on unconfirmed aides. “It’s important that they complement, but don’t supplant, the Senate confirmed appointments.”

The use of unconfirmed counselors can cut both ways. It allows Geithner to bring in staff quickly by avoiding the arduous confirmation process. On the other hand, the aides don’t get as tough a vetting by the White House or Congress and remain less accountable than Senate-confirmed officials.

Understanding Markets

Treasury spokesman Andrew Williams said the department needs people with a deep understanding of markets and the financial system, especially as it works to fend off the worst recession in half a century.

“The secretary thought that the best way to utilize their talents was to allow these individuals to provide advice to the secretary on policy issues through appointments as counselor,” Williams said.

All of Geithner’s counselors are subject to federal ethics rules, including a pledge to avoid contact with their former firms for at least a year, Williams added.

Most officials at the Treasury who have been approved by Congress come from academic, legal or non-Wall Street backgrounds. For example, Geithner’s deputy, Neal Wolin, was president and chief operating officer for property and casualty operations at insurer Hartford Financial Services Group Inc. in Hartford, Connecticut. Michael Barr, the assistant secretary for financial institutions, was a professor at the University of Michigan Law School.

Merrill Lynch Executive

An exception is Herb Allison, who runs the office that administers the financial rescue. He had been chief executive officer of mortgage finance company Fannie Mae and retirement- services firm TIAA-CREF, and before that was a longtime executive at Merrill Lynch & Co. in New York.

Along with Sperling and Sachs, Geithner’s inner circle also includes counselor Lewis Alexander, the former chief economist at Citigroup; Chief of Staff Mark Patterson, who was a lobbyist at Goldman Sachs, and Matthew Kabaker, a deputy assistant secretary who worked at private equity firm Blackstone Group LP. Patterson’s and Kabaker’s jobs did not require confirmation.

One counselor who doesn’t have a finance background is Jake Siewert, a press secretary for President Bill Clinton who came to the Treasury after working as a vice president at New York- based Alcoa Inc., the largest U.S. aluminum producer.

Alexander, who left Citigroup in March to join the Treasury, was paid $2.4 million in 2008 and the first few months of 2009, according to his financial-disclosure form. He advises Geithner on economic trends and does research on financial markets.

Toxic Assets

Kabaker, who works on domestic finance policy and helped craft the Treasury plan to spur banks to sell their toxic assets, earned $5.8 million working on private equity deals at Blackstone in 2008 and 2009 before joining the Treasury at the end of January, his disclosure form shows. Much of the compensation was in stock that Kabaker, who worked at Blackstone for 10 years, was awarded when it went public in 2007.

On his disclosure, Sachs estimated that he would receive $3.4 million in income from Mariner. The precise figure was not given because the books hadn’t closed on a number of partnerships when he joined the department in January. As of Feb. 23, when he signed the document, Sachs said he was also owed a 2008 bonus where the value was “not ascertainable.”

Sachs’s former firm also had agreed to repurchase his shares in Mariner Partners Inc., an investment fund. Sachs estimated his income from the fund at $1 million to $5 million. Sachs, who declined to comment, also specializes in domestic finance.

Work on Education

In Sperling’s primary job, he was paid $116,653 by the Council on Foreign Relations for work related to education in developing countries.

Sperling’s disclosure shows he supplemented his salary through a variety of consulting jobs, board seats, speaking fees and fellowships, to bring his total income to more than $2.2 million in the 13 months ending in January.

He was paid $480,051 as a director of the Philadelphia Stock Exchange and $250,000 for providing quarterly economic briefings to two hedge fund firms, Brevan Howard Asset Management LLP and Sterling Stamos Capital Management.

Sperling spoke at a Washington event hosted by the Houston- based Stanford Group Co. in November 2008, three months before its chairman was sued by the Securities and Exchange Commission for allegedly bilking investors of $7 billion. He also spoke at a Washington event in October 2007 that was sponsored by Citigroup, which has received $45 billion in government assistance.

Paid Speeches

Sperling, 50, was paid for his speeches through the Harry Walker Agency, which books speakers. His disclosure form does not list how much he was paid for each speech.

Sperling also drew a $137,500 salary from Bloomberg News for writing a monthly column and appearing on television, according to his disclosure.

Goldman Sachs paid Sperling the $887,727 for advice on its charitable giving. That made the bank his highest-paying employer. Even Geithner’s chief of staff Patterson, who was a full-time lobbyist at the firm, did not make as much as Sperling did on a part-time basis. Patterson reported earning $637,492 from Goldman Sachs last year.

“My sole work for Goldman Sachs was as lead consultant on the creation, design, and initial implementation of ‘10,000 Women,’ their $100 million philanthropic effort to give business and leadership education to poor women around the world,” Sperling said.

His total income of $2.2 million was unusually high, Sperling added.

The Wall Street ties are troubling to some advocates for investors. “Where is the transparency this administration promised?” asked Lynn Turner, a former chief accountant at the SEC. “You just wonder, who is representing middle Americans?”