Sunday, June 21, 2009

Goldman to Payout Record Breaking Bonus Money

Imagine my surprise.

The UK's Guardian reports:

Staff at Goldman Sachs staff can look forward to the biggest bonus payouts in the firm's 140-year history after a spectacular first half of the year...A lack of competition and a surge in revenues from trading foreign currency, bonds and fixed-income products has sent profits at Goldman Sachs soaring, according to insiders at the firm.
The lack of competition comes about, of course, as a result of Lehman Brothers going bankrupt and Bear Stearns being swallowed by JP Morgan. Both events occurred during the financial crisis while former Goldman CEO Hank Paulson was Treasury Secretary. The fate for Goldman was much different. When indications appeared that AIG securities held by Goldman might fail to be repaid, the Treasury rushed in to prop up AIG which protected Goldman from a Bear Stearns or Lehman type fate. Thus, setting up the stage for the current Goldman bonuses.

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