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"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

"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 16y 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 16y ago
  [deleted]
- dpapathanasiou 16y 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 16y 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 16y 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 16y 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.

jamiequint 16y 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 16y ago
[deleted]
dpapathanasiou 16y 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 16y 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 16y 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 16y 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.