Tuesday, February 9, 2016

YES, GOLDMAN SACHS DEPENDED ON THE BAILOUTS ... HOW THEIR LOBBYING PAID OFF, BIG TIME

Politics and markets in modern America. How they really work ...


While the meme above conveys the message, the actual amount that Goldman Sachs legally spent lobbying Congress from 2001 through 2015 was actually $39.43 million. What they spent hiring former officials and members of Congress to do their bidding is much larger.

Still, the point is made. Goldman Sachs is buying legislative favors.

All of this allowed Goldman Sachs to repay the $10 billion it borrowed from the federal government after the 2008 market collapse. But there's more to the Goldman Sachs bailout story - and it goes beyond the $10 billion loan - which helps to explain Goldman's extraordinary rate of return.

GOLDMAN'S RATE OF RETURN EXPLAINED
 * After initially getting paid $12.9 billion for its part in making bad bets, Goldman Sachs ultimately was the recipient of $14 billion in toxic deal payouts from AIG that would never have been paid were it not for the AIG bailout. In fact, Goldman Sachs would have had to declare bankruptcy if AIG had not paid Goldman for their toxic contracts.

* On September 21 of 2008, just as the market was going to tank (and a week after AIG went bankrupt), Goldman Sachs ceased being an investment bank and became simply a bank. This made Goldman Sachs eligible for FDIC protections and billions in low interest loans from the Federal Reserve (which added up to over $1.2 trillion for our nation's "private" banks), and a host of regulatory favors from Congress.

* In order to secure taxpayer backed bailout money AIG gave up its right to sue the institutions - which included Goldman Sachs - who misled them and knowingly sold "shity deals" to customers. This legal bailout saved Goldman billions in legal fees and other payouts.

* Goldman Sachs has also been the beneficiary of dirt cheap money from the Federal Reserve. This financial gift is misleadingly called Quantitative Easing, when it should more appropriately be called Corporate Welfare 2.0).

* Goldman Sachs is also the beneficiary of billions in bailouts for Greece and other European states, which allowed Europe to pay companies like Goldman Sachs for the bad deals they were led into.

There's more to this story, but you get the point.

- Mark

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