Saturday, October 11, 2008

Is "Bailout" Money Headed To Goldman Sachs?

I wonder if even the current bought and paid for Congress could have passed the Paulson Plan, if it was made clear some of the money would be heading to Goldman Sachs and Morgan Stanley?

Bloomberg is speculating that "Morgan Stanley and Goldman Sachs Group Inc., the biggest independent U.S. investment banks, may reap cash infusions as part of Treasury Secretary Henry Paulson's plan to buy stakes in financial institutions, investors said." Remember, Paulosn of late has been suggesting that "bailout" money will also head to "healthy" banks.

In the ultimate twist of the current situation that even George Orwell would appreciate, Bloomberg quotes Benjamin Wallace, an analyst at Grimes & Co. who said because Goldman and Morgan are now commercial banks, "Whatever solution they come up with for the banking industry as a whole will apply to them, because they're no longer special."

Morgan Stanley and Goldman were among the most profitable firms in Wall Street history and paid out $36.7 billion in compensation and benefits to employees for 2007.Both investment banks stayed profitable through the first three quarters of this year.

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