Goldman's Bonus
This object from the Whitechapel gallery before a security guard told me to put a cap on my camera. I cannot say the artist, which is a shame since I like the design.
Gary Pucknell, a 28 year-old London black cab driver, killed himself the other day when he tied a rope around his neck and the other end to a lamp post and drove off. His body found in his cab at a petrol station in Southwark. Maybe he suffered the injustice of Goldman Sachs, who is set to bonus themselves the most ever in their 140 year history; this after getting bailed out twelve months ago. Don't get me wrong - I am totally impressed by Goldman's numbers (Q2 profits of $3.44 billion) and all for pay-for-performance. Others could have taken taken similar risks and reaped similar rewards presumably. But they lacked the nerve, capital or brains. Others could have played the US government the way Goldman has, pressing for bailout money and cheap credit (ex-Goldman Chief Exec and Bush's Secretary of the Treasury Hank Paulson - insider? Nah.) But nobody did nor with such verve and panache. Goldman did this while reducing their leverage by half, borrowing $14 for every $1 invested, down from $28 a year ago. No wonder they are kicking the sand on the beach and picking up the pretty girls. The problem, though, is this: Goldman is in business thanks to the Treasury who served as a multi-billion dollar back-stop to their risk taking. They went out on the plank knowing Uncle Sam would bail their ass should things go wrong (thank you, Hank). Then, once successful, they repaid the TARP as quickly as can be to bonus their people who otherwise can't take rewards while owing the government. There is a reason your bank doesn't want you to pre-pay the mortgage (or charges a penalty if you do). Government supports Goldman while ordinary Joes like Gary must wait years for help. This does not make Goldman popular but, hey, I couldn't get a job there after college and business school so these may just be sour grapes. Bastards. But clever bastards they are.
Eitan to me this morning: "You have very hairy under-arms, my friend."
