Let's Talk About How Goldman Makes Money; 1 in 6 in USA Unemployed or Underemployed

[asiaprop]

ok, some fair points. I just do not understand the point of arguing the contribution to society at large. See, guys like Krugman are contradicting their own works. Most practitioners in finance really do not attribute a lot of contributional value to the works of Krugman and co. Like it or not but the values of works pumped out by academics is highly questioned on Wall Street. At least I have not seen much Krugman & Co. have contributed to a better economic system. In the end all comes down to the fact that simple capitalism works best and above all, is wanted by the majority of voters.

If we start arguing about contributions to society then guys like Krugman should be shut down before anyone else. GS and the likes at least walk the talk. They take on risk and re-distribute it to those with appetite to risk, the most basic definition of the job of investment banks. Whether Ghandi would have liked everything those guys do is highly questionable but AGAIN if you start thinking along those lines then you should shut down pretty much every corporate entity.

You got the choice: Take part in this economic system or emigrate, buy a tent, and become a nomad.

Quote from Martinghoul:

As I mentioned, Phibro, which is a unit of Citi, is doing something very similar. JP just entered this space, as well, so they're not quite up to Goldman's level.

There's a basic flaw with all your arguments. The debate about Goldman and the bailouts is about the long-term costs/benefits that institutions like GS assess/contribute to society. You're attempting to morph the debate into the discussion of the present, short-run costs/benefits, as determined by the current legal system. The two are orthogonal and should not be confused. One is about ethics and, I grant you, is a bit vague/philosophical. The other is cut and dry, which is something you keep pointing out, but has nothing to do with Krugman's article in question and my analogy.

So, please, if you want to discuss the original article, please do address the original question. How does the presence of Goldman contribute to society, in the longer term?

 

[asiaprop]

of course I am also in favor of intelligent regulation. But dont blame the guy who maxed out his benefits in line with past regulation. You would have done the same. Tell me you would not take the job if given the chance to work for GS's front office.

Quote from Truckload:

Great article BuyLoSellHi, thanks for posting it. It seems that many people still do not comprehend, or do not want to comprehend, the value of reasonable and wise regulation in a free market economy.

What happened in our financial markets is analagous to taking away traffic lights from a major road intersection. Yes, it is great fun to not have to stop for those annoying red lights. Yes, very often eveyone will save a little bit of time by dashing through the intersection between opposing traffic. But in the long run, accidents and the damage and death that result will hurt EVERYONE far more than any advantage gained by eliminating traffic regulation.

It is in the best interest of the community at large, and ultimately best for the regulated, to provide reasonable and wise regulation of traffic . . . and of financial markets.

 

[asiaprop]

yeeeeeeeeeeeeeesssssssssssssssssssssssssss.

And what is wrong with that. Would you not have done the same? Would Apple, Cisco, Microsoft, P&G, ....not have done exactly the same? Give me a fuxxing break, hypocrites!!!

Quote from telozo:

I would not be worried about the consumers. They, and their kids, will pay it back to the hilt in the next 50 years.

As for GS, they did not do anything illegal indeed, but they sure profited by all the government bailouts and guarantees, and they made sure are well positioned to collect every cent.

 

[asiaprop]

could not agree more. Most who blame and bash GS are utter morons who are not successful in this current economic system, so when it became utterly clear they failed they suddenly scream at those who navigated around regulation and maxed out on their benefits. In the end in a capitalist system this is exactly what is expected to happen. Some make it big (on average the smarter ones and the ones with bold balls yet prudent strategies) and a larger number of people lags behind. If some of you have a problem with that maybe you should stop bashing Russia or Chile and consider moving to a country run by socialists.

Quote from fhl:

This article just about takes the cake for stupidity.

1 What GS does is bad for America? Krug doesn't like the way they allocate capital? Of course he doesn't. He wants the gov't to allocate capital. And I mean you have to be dumber than a mud fence to think gov is gonna do it better.

2 Compensation for results is bad for America? Once again, that is just about the stupidest thing i've ever read. It's not going to take too long to find out just how stupid over the next several years when we see the results of Obama GM come in.

3 So krug wants barney and (friend of Angelo) chris to reform wall street, eh? Is he really too ignorant to notice what they did for the gse's, or that they are now, as i write, agitating for the gse's too AGAIN lower lending standards and get the money moving? It's almost too much to comprehend, this stupidity.


Krug can't stand GS "slicing and dicing " and moving money around. He says it serves no useful purpose. Of course, you have to remember that he wants the gov't to move the money around, you know, to 'green' projects and the like. Who's stupid enough to think that this is going to be the 'model of efficiency'?

And then he has to hint around at this idiotic reasoning that GS is private during the good times and socialist during the bad times. Did he not notice that GS and wall street give up half of their profits for decades while gov't shared in NONE of the losses? Only a freakin moron would go on about this capitalist during good times and socialist during the bad times. Hey, how about if you take away the bailouts, you also take away the confiscatory taxation of profits, too, krug. Anyone think he'll bite on that?

And when the mortgage market topped out, GS shorted it. Wow, now that's a reason to hate them. Congratulations for being a schmuck.

 

[asiaprop]

you ask the wrong questions. No company in a capitalist system has to prove what they do good to society. It helps selling your products but its not a prerequisite.

But while you asked couple thoughts. How about a) transferring risk, employing people, paying people who in turn contribute huge amounts to worthy causes, adding liquidity,...should I add more?

Quote from Roman Candle:

I want to here the good things Goldman does for this country. There must be something.

 

[asiaprop]

buddy, take the emotion out of your post and take a deep breath and think again what you wrote.
Because GS shorted the housing market means again what? That they sold out the American consumer? I would also have shorted the irresponsible American home owner who was in debt to the hilt. Anything wrong with that? Your family should have never set foot onto this country, you took the land away from someone else.

Quote from Roman Candle:

As a major player in the financial markets, they shorted America. As a major financial player you would think they have a duty to help the country in which they operate. That’s just common courtesy. When you put money ahead of human beings you’re bound to fail. Don’t get me wrong I see nothing wrong with making a profit you can’t exists with out one, but Goldman is all profit. They have a major public image problem.

 

[asiaprop]

REALLY? So capitalism 2000,1000, 500,200,100,10 years ago was ethical? Gotta be kidding me. Dont get me wrong I prefer things done ethically but thats just not how this world operates. I commend you for your good intend but how about getting back to reality.

Or is it ethical to employ minors to work for numerous American companies abroad? Is it ethical as long as they are not Americans? Come on buddy, your intentions are good but they just do not reflect how this world works.

Quote from gastropod:

I can see that you TOTALLY fail to understand capitalism. Capitalism exists BECAUSE of good ethics. Without GOOD ethics there is no version of capitalism that will work.

Mere laws on books will NEVER work for capitalism. That is part of the problem with MODERN capitalism. You have large companies that will go out and steal the smaller companies' patents - not because they think it is right...but, because they can get away with it LEGALLY - they can drag cases through the courts and the smaller company will never win the case, because they don't have the money to pay for extended court costs. Several banks just had to pay a fine for charging usurious interest rates on their credit cards. Had the case not been taken up by the "state" - the customers would have been completely screwed. Did the banks not know that usurious rates were illegal? No - they thought they could get away with breaking the law. Had the banks been "ethical" - they would not have pillaged their customers. This is just one example of "laws not working."

Let me guess - you think that Madoff's only crimes were to the "victims" who he ripped $65 Billion out of...you are wrong - he injured the "American" brand - all Americans lost! Americans (of which I am one) have lost, because there are people out there who will no longer trust American products - financial or otherwise. Mere breaking of laws affects the direct victims of the broken laws. Breaking ethics has a more profound impact on society.

-gastropod

 

[asiaprop]

a) thanks for educating us ;-)
b) its a little bit trickier than just renting couple tankers but I guess you are not interested in those details as you assumed everyone else does not know about contango.
c) GS has never been bankrupt at any point in time. Stay with the facts and dont mix everything up.

Quote from Anaconda:

It's called oil contango and all the other IBs (well now regular banks since they had to be saved) do this as well as several NYC boutiques. It's not exactly complicated, just takes capital to secure tankers.




They were bankrupt back in fall 2008 year ago but got saved by taxpayer money thanks to Henry Paulson. How exactly is that doing almost everything right?
Yeah, I do envy that, where is my TARP money? Where is my discount window? Where is the Fed & US Treasury backing my liabilities? Why exactly are my taxes being signed away to save parasites like Goldman and then allow them to pay even more record bonuses?

I could tear apart the rest of your post, but I just don't have the time. Continue being in awe of Goldman while they rob the country. They are utter scumbags whose advantage is cronyism. If that is what you inspire to be, well good luck to you.

As for Goldman having the brightest people, not at all true. Try doing business with them. They do have the biggest scumbags who try at any corner to try to screw you, but the brightest, lol, I think those are only at the top levels. JP Morgan does the same, so does Morgan Stanley (John Mack anyone?). But they are a little quieter about it. Goldman is just out of control.

 

[PragmaticIdeals]

Asiaprop and the rest of the pro-GS crowd fail to understand that 'free capitalism' does not entail a right to fraudulently sell worthless securities that have been fraudulently labelled as AAA to fraudulent banks looking to making fraudulent short-term profits as the fraudulent bubble inflates due to the fraudulent manipulation of the Federal reserve (on the free market).

All while shorting the market and fully knowing how the fraud would seep its way through the system to a critical point.

Sure, nothing illegal may have been done, but does that make it good for society?

---

Asiaprop's response:

"GO CAPITALISM!!!!~~~~~"

 

[Martinghoul]

Quote from asiaprop:

ok, some fair points. I just do not understand the point of arguing the contribution to society at large. See, guys like Krugman are contradicting their own works. Most practitioners in finance really do not attribute a lot of contributional value to the works of Krugman and co. Like it or not but the values of works pumped out by academics is highly questioned on Wall Street. At least I have not seen much Krugman & Co. have contributed to a better economic system. In the end all comes down to the fact that simple capitalism works best and above all, is wanted by the majority of voters.

Ha-ha, now you be talking completely loco, man...

Firstly, your sweeping statements about the respect practitioners have for academics and their work are plain wrong. Secondly, the fact you haven't seen it doesn't mean it ain't there. Finally, even if it were true that the all-knowing, all-seeing and infallible Practitioner-Gods of Wall Street (of which, btw, I am part) don't value academic work, these people are sometimes WRONG, shocking as this may seem to you! So I am sure you'll forgive me for putting a wee bit more weight on the fact that Krugman has received the ultimate accolade an academic can aspire to.

GS and the likes at least walk the talk. They take on risk and re-distribute it to those with appetite to risk, the most basic definition of the job of investment banks. Whether Ghandi would have liked everything those guys do is highly questionable but AGAIN if you start thinking along those lines then you should shut down pretty much every corporate entity.

But that's exactly the point. Surely you do realize that the IBs have f*cked up that very basic job of distributing risk that they were paid to do. But even that is not the problem. The problem is that after screwing up, they managed to walk away virtually unscathed, free to screw up again in the future.

You got the choice: Take part in this economic system or emigrate, buy a tent, and become a nomad.

Those are not the only choices. As I mentioned before, I will contribute to to the force of public opinion, in hopes that the collective weight behind it is powerful enough to change the poorly designed incentive structure of the system.