Goldman Sachs and people backing it make me sick

July 13, 2009

Goldman Sachs is back to the old ways of the financial services sector in the US, making money on high risk, reports The New York Times.

It seems like it is back to the old days of champagne and caviar for the company in its new avatar as a holding bank, as the company plans to dish out large bonuses to its employees, even as most other people in the US are without jobs or tightening their belts.

On Wall Street, where money is the ultimate measure, Goldman is both revered and reviled, says the New York Times. Not unexpectedly the company’s share price is on the upswing.

Meanwhile, there are dark hints that the bank may be using its old-boy network to benefit from the US government, according to Matt Taibbi in the RollingStone

The bail out of AIG benefited Goldman Sachs, as AIG payed back a large loan from Goldman Sachs after receiving the bail out. And Goldman Sachs, now a beneficary of a deposit guarantee scheme of the US government, has had access to cheap funds to invest.

What sickens me, and I am sure a lot of other people around the world is that it seems to be business as usual in the US for the banks.

We could now be heading towards yet another financial crisis that could hit the whole world. Why ? Because the Barack Obama administration in the US has not pushed through quickly enough measures to regulate the financial services sector and all its various offspring like hedge funds.

Obama sermonizes to the world at large, in Ghana, in the Middle East, and even in Europe. But when it comes to delivery he seems to be up against the financial and business elites Robert Kuttner writes about in the Squandering of America.