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What about those Goldman bonuses?


Will Goldman Sachs have its best year ever in 2009? Will it payout record bonuses? Maybe. Then again, maybe not.

The financial press went gaga this morning over a report in The Observer that Goldman employees “can can look forward to the biggest bonus payouts in the firm’s 140-year history.” The British paper had no real numbers to back up its claim, just the predictions of “insiders at the firm.”

The lack of numbers, however, didn’t stop the financial press and the blogging world from running wild with the story. The morning business page on Huffington Post, for instance, led with the story under the screaming headline: “Nothing’s Changed.”

Why let the lack of facts get in the way of a good story line. The idea of greedy bankers–especially ones at Goldman–getting even richer after being bailed out by the goverment is just to rich to ignore.

Obama treads lightly on Wall Street


President Obama, in a speech on the financial crisis at Georgetown University in April, spoke eloquently about the need to move away from a Wall Street-fueled “bubble and bust economy.” But Obama’s proposal for overhauling the financial regulatory system falls well short of his stated goal of making “sure such a crisis never happens again.”

In fact, another major crisis is all but certain if the administration’s plan is enacted as is. I can’t tell you when. Nor can I tell you which financial institutions will be hardest hit. But it will happen because Obama took the path of least resistance when it came to the thorny issue of handling financial institutions that are deemed too big to fail.

The cost of paying back TARP


In a fitting twist of irony, Goldman Sachs joined other major banks in paying back the TARP on the very same day the Obama administration was releasing its financial regulatory reform package.

However, freedom for Goldman from the federal government dictating demands on compenstion will take a bite out of second-quarter earnings.  In a regulatory filing, Goldman says:

No fix for the derivatives monster


It’s still not clear if the Obama administration has a plan for dealing with the derivatives monster, which is one of the biggest problems regulators must confront in dealing with the potential collpase of a “too big to fail” financial institution.

The administration’s financial regulatory reform package would give the FDIC, and in some cases the SEC, broad authority to transfer a firm’s derivatives book to a “bridge instititution” to avoid “termination of the contracts by the firm’s counterparties.” But that may be easier said then done.

Talk about an understatement


Is this what we’re calling reckless risk-taking these days? Dealbook reports that Goldman Sachs chief Blankfein apologizes to U.S. legislators for participating in the “market euphoria” that led to the financial crisis.

Goldman fills the Lehman void


Lehman’s collapse left a big whole in the world of structured products–a largely unnecessary investment vehicle that’s been all too popular in Europe and Asia. But it seems Goldman Sachs is rushing in to fill the void.

A week ago, a three-month-old Goldman Sachs subsidiary filed a registration statement with Irish authorities for the future sale of structured notes in the UK and elsewhere–but not in the US. The so-called “base prospectus” filed by Goldman Sachs Financial Solutions PLC is the second structured note offering a Goldman subsidiary has filed this year with Irish regulators.