Skip to content | Skip to menu | Skip to search

Banbury Cross

a pillow for lost thoughts...

Post details: Better Sachs

Better Sachs

Back in the good old days when mountain streams were teaming with salmon and sewing machines were propelled by pedaling, the money was usually made in a Bull Market. These days it is the species' excrement that would make a better epithet for the nature of financial markets, whose advances seem to have been increasingly propelled by peddling of piddly derivatives. But not to worry, taxpayers are always on a standby when it comes to changing Wall Street's investing diapers. The future is brightening already.

Let's start spreading the good news: Financial behemoth Goldman Sachs earned $2.72 billion in the second quarter. The quarter before it was $1.8 billion. That is all peachy, until you realize that just a quarter ago Goldman received a hefty check from us, taxpayers, whose size easily dwindles their combined quarterly profits. And I am not talking about the $10 billion of TARP money, which they rightfully returned. I mean the $13 billion which was discreetly channeled to them through the well greased conduits of AIG. With that in mind, their numbers don't look like profits any more, they look more like a High Way Robbery. Or a High School Musical - depending on whether you use hearing aids or Twitter for your communication needs.

It gets even more interesting if you dig deeper into the Yahoo!Finance article which announced their heroic feat: "Much of Goldman's Q2 strength came from its trading business." There! Mystery solved! Did you foolishly think that they would be making loans to people or produce anything of actual value? Nah, it is just spoils of gambling, silly, or - considering the fact that they own large part of the market - spoils of rigged gambling.

So Goldman Sachs turned up some profits. Woohoo! Now, after that check we cut them back in October, you might further hope they would perhaps like to give something back to the community. Nothing big you know - just build a school here, fund a health care research program there or cook a megavat of chicken soup for the victims of their relentless mortgage pushing. But you'd be moderately mistaken. Never mind that without the 13 billion bailout, they'd still be deep in the hole. These were their own profits, right? Why would they share them with gullible taxpayers?

If Wall Street was in Tehran, the Goldman Sachs's office windows would undoubtedly be pummeled with rotten tomatoes and cobble stones neatly gift wrapped in sheets of shrinking 401k statements. But fortunately for Goldman, Wall Street is in New York - so it is back to golf courses and jackpotluck dinners where the bankers can resume rubbing elbows with political elites and swapping recipes for financial disasters.

Smart? Nope. Slick? You bet.

So let's do a quick recap. Goldman's infallible ubertraders invest en-masse in opaque and poorly understood securities. When their bets go terribly wrong, uncle Ben rushes in with a huge AIG pacifier lest Hank's old buddies suffer any financial boo-boos. Is that how we want to run our economy?

If the answer is yes, then I would like to propose the greatest entrepreneurial idea of all time. I am going to call it Better Sachs. Not that I would have doubts about the absolute perfection of the current Sachs, but there will be lots of heavy betting involved.

Here is my business plan. Go to a casino. Bet constantly on red, preferably with borrowed money. If you win, you keep your money. If you lose, Mr. Bernanke will gladly repay your principal from the Treasury's bottomless coffers. This scheme simply cannot fail and if we start say 10-15 companies operating on this principle, I bet you a Goldman Sachs Executive Bonus that we will be out of the recession in no time. One idea can single handedly save our economy!

Any daring venture capitalists on the Wall Street want to bankroll this revolutionary proposal?

Helloo?

Helloooooo...??

ruleta

Comments:

No Comments for this post yet...

Comments are closed for this post.

This site works better with web standards! Original skin design courtesy of Tristan NITOT.