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This isn't an accurate depiction of what happened. The banks that failed did so because they were the ones holding on to the doomed products. In fact, the banks

This isn't an accurate depiction of what happened. The banks that failed did so because they were the ones holding on to the doomed products. In fact, the banks that shorted the products in volume were the ones that survived and didn't need bailouts (GS being one of them).

startuprules 17y ago
"In fact, the banks that shorted the products in volume were the ones that survived and didn't need bailouts (GS being one of them)." So you're saying 1.) GS never needed bailed out 2.) GS was a bank before and after the crisis. Goldman Sachs takes $12B Bailout, Hands out $14B Bonuses http://www.dailymail.co.uk/news/worldnews/article-1081624/Goldman-Sachs-ready-hand-7BILLION-salary-bonus-package--6bn-bail-out.html http://www.dailymail.co.uk/news/worldnews/article-1081624/Go...
- jamiequint 17y ago
  Yes, they were forced to take bailout money: http://www.businessinsider.com/uncovered-tarp-docs-reveal-how-paulson-forced-banks-to-take-the-cash-2009-5 http://www.businessinsider.com/uncovered-tarp-docs-reveal-ho... and paid it back as soon as they could.
  - deleted 17y ago
    [deleted]
  - dpapathanasiou 17y ago
    "Goldman Sachs released its 2009 annual report today. In its shareholder letter, Goldman says it repaid TARP money, but did not mention the massive new taxpayer subsidies it continues to enjoy." http://www.huffingtonpost.com/janet-tavakoli/goldman-sachs-spinning-go_b_528144.html http://www.huffingtonpost.com/janet-tavakoli/goldman-sachs-s...
  - jamiequint 17y ago
    @startuprule (won't let me reply directly to you). That article talks about counterparty risk, has nothing to do with whether GS themselves needed a bailout. In fact it speaks to the fact that they probably didn't see this crisis coming, as the biggest trading partner of AIG they would have known their counterparty exposure and tried to reduce it ahead of time.
    - dsplittgerber 17y ago
      GS needed a bail-out. Pleae read Too Big To Fail by Andrew Ross Sorkin, or any other detailed book about the financial crisis, and you will learn that GS had massive trust issues in the market. The 'bail-out' for GS got done primarily for the supposed trust in the stability and balance sheets of financial institutions it signaled - it was mostly for bridge financing (disregarding banks who actually were in deep shit all along, which GS was not one of). Yes, the exact details of the bail-out were shoved down their throat. Question being if GS would have made it at all if Treasury had waited any longer.
  - grandalf 17y ago
    That's not completely accurate. What bank would refuse to take money its competitors were getting? Goldman was the healthiest (best capitalized relative to the systemic risk of the crisis) of US iBanks, and thus if there had been no bailout, it's strategy would have been to wait for things to get worse and then acquire various less healthy banks at a huge discount. To prevent it from attempting this strategy, the government instead bailed out most of its competitors, but Goldman conceded to the deal as long as it was officially "forced" to participate. This was done only for PR reasons so that it could retain the perception of being the healthiest bank while not having to resort to a fire-sale buying binge fueled by an influx of capital that might very well have been from foreign governments -- do you think China wouldn't have sent over $20B in exchange for a huge stake in one of two remaining US iBanks? The AIG risk was a big factor, but AIG too would have probably taken capital from abroad. The US Government bailout was partially to retain stability and partially to avoid having the firms that survived become too powerful and foreign funded.
matasar 17y ago
Setting aside the question of whether they needed a bailout, which I'm not qualified to answer, Goldman Sachs did receive federal assistance. The best link I can find is a reference to them paying it back: http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20090722005842&newsLang=en http://www.businesswire.com/portal/site/home/permalink/?ndmV...
- jamiequint 17y ago
  http://www.businessinsider.com/uncovered-tarp-docs-reveal-how-paulson-forced-banks-to-take-the-cash-2009-5 http://www.businessinsider.com/uncovered-tarp-docs-reveal-ho...
- tortilla 17y ago
  Also, GS would have been in a world of hurt if AIG wasn't bailed out.
startuprules 17y ago
If the government didn't bail out AIG, GS would've gone down. And Hank Paulson is the former CEO of GS. So yes, GS needed the bailout desperately and got it. http://www.capital-chronicle.com/2008/09/nyt-report-on-goldman-sachs-aig-ties.html http://www.capital-chronicle.com/2008/09/nyt-report-on-goldm...
- jamiequint 17y ago
  That has nothing to do with whether GS themselves needed a bailout. In fact it speaks to the fact that they probably didn't see this crisis coming. If they had, then as the biggest trading partner of AIG they would have known their counterparty exposure and tried to reduce it ahead of time.

startuprules 17y ago

"In fact, the banks that shorted the products in volume were the ones that survived and didn't need bailouts (GS being one of them)." So you're saying 1.) GS never needed bailed out 2.) GS was a bank before and after the crisis. Goldman Sachs takes $12B Bailout, Hands out $14B Bonuses http://www.dailymail.co.uk/news/worldnews/article-1081624/Goldman-Sachs-ready-hand-7BILLION-salary-bonus-package--6bn-bail-out.html http://www.dailymail.co.uk/news/worldnews/article-1081624/Go...

jamiequint 17y ago
Yes, they were forced to take bailout money: http://www.businessinsider.com/uncovered-tarp-docs-reveal-how-paulson-forced-banks-to-take-the-cash-2009-5 http://www.businessinsider.com/uncovered-tarp-docs-reveal-ho... and paid it back as soon as they could.
- deleted 17y ago
  [deleted]
- dpapathanasiou 17y ago
  "Goldman Sachs released its 2009 annual report today. In its shareholder letter, Goldman says it repaid TARP money, but did not mention the massive new taxpayer subsidies it continues to enjoy." http://www.huffingtonpost.com/janet-tavakoli/goldman-sachs-spinning-go_b_528144.html http://www.huffingtonpost.com/janet-tavakoli/goldman-sachs-s...
- jamiequint 17y ago
  @startuprule (won't let me reply directly to you). That article talks about counterparty risk, has nothing to do with whether GS themselves needed a bailout. In fact it speaks to the fact that they probably didn't see this crisis coming, as the biggest trading partner of AIG they would have known their counterparty exposure and tried to reduce it ahead of time.
  - dsplittgerber 17y ago
    GS needed a bail-out. Pleae read Too Big To Fail by Andrew Ross Sorkin, or any other detailed book about the financial crisis, and you will learn that GS had massive trust issues in the market. The 'bail-out' for GS got done primarily for the supposed trust in the stability and balance sheets of financial institutions it signaled - it was mostly for bridge financing (disregarding banks who actually were in deep shit all along, which GS was not one of). Yes, the exact details of the bail-out were shoved down their throat. Question being if GS would have made it at all if Treasury had waited any longer.
- grandalf 17y ago
  That's not completely accurate. What bank would refuse to take money its competitors were getting? Goldman was the healthiest (best capitalized relative to the systemic risk of the crisis) of US iBanks, and thus if there had been no bailout, it's strategy would have been to wait for things to get worse and then acquire various less healthy banks at a huge discount. To prevent it from attempting this strategy, the government instead bailed out most of its competitors, but Goldman conceded to the deal as long as it was officially "forced" to participate. This was done only for PR reasons so that it could retain the perception of being the healthiest bank while not having to resort to a fire-sale buying binge fueled by an influx of capital that might very well have been from foreign governments -- do you think China wouldn't have sent over $20B in exchange for a huge stake in one of two remaining US iBanks? The AIG risk was a big factor, but AIG too would have probably taken capital from abroad. The US Government bailout was partially to retain stability and partially to avoid having the firms that survived become too powerful and foreign funded.

matasar 17y ago

Setting aside the question of whether they needed a bailout, which I'm not qualified to answer, Goldman Sachs did receive federal assistance. The best link I can find is a reference to them paying it back: http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20090722005842&newsLang=en http://www.businesswire.com/portal/site/home/permalink/?ndmV...

jamiequint 17y ago
http://www.businessinsider.com/uncovered-tarp-docs-reveal-how-paulson-forced-banks-to-take-the-cash-2009-5 http://www.businessinsider.com/uncovered-tarp-docs-reveal-ho...
tortilla 17y ago
Also, GS would have been in a world of hurt if AIG wasn't bailed out.

startuprules 17y ago

If the government didn't bail out AIG, GS would've gone down. And Hank Paulson is the former CEO of GS. So yes, GS needed the bailout desperately and got it. http://www.capital-chronicle.com/2008/09/nyt-report-on-goldman-sachs-aig-ties.html http://www.capital-chronicle.com/2008/09/nyt-report-on-goldm...

jamiequint 17y ago
That has nothing to do with whether GS themselves needed a bailout. In fact it speaks to the fact that they probably didn't see this crisis coming. If they had, then as the biggest trading partner of AIG they would have known their counterparty exposure and tried to reduce it ahead of time.