Taxing Grandma to Subsidize Goldman Sachs

[Karmadillo]

http://www.counterpunch.org/morici04142009.html

Monday afternoon, Goldman Sachs reported much larger than expected first quarter profits, and this comes on the heels of Wells Fargo’s strong earnings reported last week.

No one should be surprised.

The Federal Reserve has provided the banks with lots of cheap funds through its various emergency lending facilities and quantitative easing.

The Federal Reserve has permitted the banks and financial houses to park vast sums of unmarketable paper on its books—securities made nearly worthless by the misjudgment and avarice of bankers. In return, the Fed has provided these scions of finance with fresh funds, cheaply, that they may lend at healthy rates on credit cards, auto loans and even mortgages.

While the Fed cuts the banks slack, the bankers are busy turning the screws on their debtors by raising credit card rates and fees, and harassing distressed borrowers with all the zeal of the Roman army sacking Palestine.

It takes good banking skills to borrow at three percent and lend at five and make a profit.

<edit>

This all comes at a cost to someone—America’s elderly.

Many retirees depend on interest from certificates of deposit. Those rates are down dramatically, and as CDs expire retirees are compelled to reinvest their savings at lower rates and live on less. They can take comfort that their sacrifices are helping pay off Wall Streets losses from the lavish bonuses paid bankers. For example, the $70.3 million Goldman doled to CEO Lloyd Blankfein in 2007.

more...

[Karmadillo]

1. Kick

nt

[girl gone mad]

2. Wells Fargo wasn't borrowing at 3%.

They were borrowing at .23%.

Eventually people are going to figure out that these banks aren't our buddies. They only way they make money these days is by squeezing the rest of us. Retirees and others on a fixed income have absolutely been hurt by the various bailouts and the Fed's ZIRP strategy.

Goldman Sachs' executives just payed themselves $4.7B in bonuses on $1.7B profit.

None of this stuff is helping the real economy.

[Egalitariat]

3. I'm pretty sure the Goldman Sachs loan was a good deal for the taxpayers

The US is currently borrowing money from China for 1% and loaning it to Goldman Sachs for 5%. And Goldman Sachs is about to pay it back. I've got no problem when the government makes deals like that.

[girl gone mad]

4. That's a but myopic, no?

Tell us why China is (was?) so interested in buying our debt.

[Egalitariat]

7. Who knows? But the fact the GS deal was good for taxpayers is not myopic, no.

nm

[Democrats_win]

5. That's right. It hurts the responsible people who saved.

It's not a dish against anyone, but I hope people really consider the fact of how badly it hurts the elderly. If it helped people, maybe the elderly could see it was for the best, but it isn't. It's to make the worst people on earth wealthier.

Where's George W. now? You're either for us (The People) or against us (The bankster). I wish Americans could see what a HELL the banks and the politicians have created. But soon, everyone will feel the heat. It will get worse.

[Pastiche423]

6. K&R!

[KharmaTrain]

8. A Generation's Work Wiped Out...

One thing I've noticed about this discussion here is one's viewpoint is related to how much "skin" or money they have in this game. Sadly, I've known many who have seen years of savings wiped out...401ks they were told back in the 80s would be all that Social Security isn't...and while SSI will be around when they retire, but all the other money is gone...a lifetime of hard work gambled out the door.

While it's obscene to see the fees and bonuses...the overall arrogance of the big banks, at least some of that bail-out did save some pensions and savings...instead of a total wipe out had these banks been allowed to totally collapse. Now, if that's not your life savings or future, it's easy to understand the "let 'em fail" attitude, but for millions, they're just hoping to salvage what they have left and the bail-out may have done that.

That said, there will be an accounting up ahead here. The Obama administration has been stuck...no matter what they do, it's either too much or not enough. I've read a ton of "economists" and talked to numerous bankers and investors over the past three months and the one thing that is obvious is no one really has a handle on this mess, nor has a true answer that won't mean lots of pain in the months ahead. The shit sandwich here is which is the lesser of the evils.