Saturday, September 12, 2009

Goldman Sachs being contrite?

Lloyd Blankfein, Chairman of Goldman Sachs, seemed apologetic over his company's role in creating the derivatives bubble on Wall Street admitting some of those derivates were "socially useless". Read this.

FT reported in the same issue that: "The firm has already earmarked $11.4bn to compensate employees for the first half of the year. If Goldman’s second-half earnings stay on track, it could pay out an average of $770,000 to each of its 29,400 employees. Its top executives stand to take home tens of millions of dollars in bonuses, as was the case in 2006 and 2007".

The firm has to keep generating huge profits to pay for "top talents" if it wants to keep them from jumping to its competitors.

Someone should have asked the chairman: "Would Goldman Sachs refrain from selling similarly risky and sociall useless derivatives in the future if that meant lower growth rates in company profits?"

But that would have been most impolite in the gentleman's world of banking, wouldn't it?

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