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Ear to the Ground

Goldman Sachs Execs Dumped Stock Like Crazy

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Posted on Jul 13, 2009
Flickr / antiparticle

A storm cloud descends on the Goldman Sachs building.

Goldman Sachs is expected to announce a windfall quarter, thanks no doubt to billions in bailout money, but many people at the firm aren’t puffing their chests out. According to the Financial Times, Goldman executives dumped close to $700 million in stock between September 2008 and April 2009—after taxpayers came to the rescue.

Financial Times:

Executives at Goldman Sachs sold almost $700m worth of stock following the collapse of Lehman Brothers last September, according to filings with the Securities and Exchange Commission.

Most of the sales occurred during the period in which the investment bank enjoyed the support of $10bn from the troubled asset relief programme.

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By DBM, July 14, 2009 at 8:07 pm Link to this comment

RMD: “We taxpayers are going to profit ...”

I am no expert here but I think you have missed a none-to-subtle shell game here.

The large merchant banks were not federally insured by the FDIC and so did not have to follow banking rules.  They insured themselves through this thing called the American Insurance Group (yes AIG). 

When AIG was given money it went straight to paying off the big merchant bankers who had gotten themselves in trouble by not following any rules.

Now, the big merchant banks also wanted direct government money to bail themselves out as if they had been insured by the FDIC so they petitioned to “become banks”.  This was granted despite the fact that their operations did not and do not adhere to FDIC regulations AND the insurance was to cover previously incurred liabilities as well.

So, these banks (Goldman Sachs et. al.) took:

1. A direct bailout

2. A bailout through AIG

3. A bailout through instant membership of the FDIC

Many of the banks (Goldman Sachs for instance) have now returned bailout No.1 so that they can avoid any future regulation or transparency that would have come with it.  They can do this because they have secured No.‘s 2 & 3 and don’t need the direct bailout anymore.

So ... the bankers have taken a large amount of government (read taxpayers’) money and have avoided any oversight or regulation by paying a small “profit” on a small part of what they received.  The rest they seem to be using to pay themselves the biggest bonuses ever and lobbying to ensure that there is never any regulation they don’t like (including restrictions on compensation or tying compensation to the genuine interests of their shareholders ... let alone the public!).

Unfortunately, that “profit” you speak of tastes a little sour.

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By don knutsen, July 14, 2009 at 7:49 am Link to this comment
(Unregistered commenter)

Just more of the same isn’t it. There is a quote from the late Frank Zappa…that is right on the mark. “Politics is the entertainment branch of goverment”. As long as the public is made to believe that the battle waged is between republicans and democrats then the status quo is safe to continue looting. Haven’t people recognised by now how little difference there is between what the dem.s or republicans actually do back in Wash DC ? The media does its part in keeping us UN-informed as to the true nature of the beast. It isn’t about repub.s and democrats, thats just the distraction. Its about the rich white greedheads that are really calling the shots. Many of these same folks have or are holding some of the highest positions in our goverment ( like the treasury & former Sec. of treasury Paulsen of Goldman Sachs or Larry Summers ) These same people who are tanking companies and leaving with millions in rewards while everyone else suffers. Who have spent years supporting both sides of the isle to remove regulations put in place generations ago. The same folks who have been in charge all along. We can’t find a solution to our economic problems untill we wake up to who the enemy is.

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By drklassen, July 14, 2009 at 5:39 am Link to this comment
(Unregistered commenter)

The bailout, as per Krugman and Steiglitz, should have been bottom up, not top down.  One way to have done that would have been to have the feds simply refinance every mortgage that was in arrears that was on a primary residence that had a value, at time of purchase, no greater than, say, 5 or 6 times the household annual income (also at the time of purchase) with a contractual obligation to keep the house for at least 5 years—-no other questions asked.  That would have effectively ended most (if not all?) of the mortgage backed securities from going under since the underlying mortgages would have been paid off.  The feds could then slowly sell off those mortgages (in total, not as stupid-ass “securitized” crap) to get its money back.  Done.

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By 911truthdotorg, July 13, 2009 at 10:19 pm Link to this comment

This an interview of former Assistant Secretary of Treasury Paul Craig Roberts. At 2:40 (of the 3:08 interview) was this exchange:

http://crooksandliars.com/susie-madrak/paul-craig-roberts-geithner-works-gol

Max Keiser: “Does the US Secretary of the Treasury work for the people or does he work for the banking system on Wall Street?”

Dr. Paul Craig Reports: “He works for Goldman Sachs.”

Max Kaiser: Financial Controlled Demolition just like 911
http://www.youtube.com/watch?v=4PJk_73hjVQ

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By RMD, July 13, 2009 at 8:58 pm Link to this comment
(Unregistered commenter)

Take the money and run?

We taxpayers are going to profit from the GS “bailout” ...both interest and gains from warrants.

The illegal purchases of Chrysler and GM are the fiascos.

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By DBM, July 13, 2009 at 7:32 pm Link to this comment

Take the bailout money and run ... what a shock.

It all might have made some sense if the bailougt money had been accompanied with full government ownership, a change of management, new regulation and some prosecutions.

With no strings attached what did everyone expect these guys to do?  Change the habits of the last decade (at least) and use the bailout money to extend credit to lift the entire economy?! Ha!!

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