Sunday, January 10, 2010
Remember how quickly Goldman Sachs went bankrupt the first time? A hung over kid clinging to the toilet bowl, they promised taxpayers who bailed them out that they would never touch investment banking again, and would instead turn into bank holding company with consumer retail locations.
They ignored their own mandate after Treasury Secretary Paulson, the same Goldman Sachs CEO who bankrupt the company, seized the taxpayers' money in the face of 100:1 voter opposition. He reimbursed Goldman's mountain of losses to the tune of $320B (16x Goldman's total operating capital at peak), most of it laundered through AIG at 100 cents on the dollar.
Today, Goldman Sachs losses are much worse. They've got over a $trillion in mega-leveraged liabilities. They've marked-up, instead of written down, a $53B ultra-leveraged, completely worthless subprime portfolio, and have lost hundreds of billions in diving commercial real estate which they continue to book as more valuable than 2005.
Even as litigation from their first bankruptcy settlement pours in, Goldman Sachs employees continue to loot the bonus pool, setting aside a record-doubling $22B in one time pay raises in an all out sprint for the exit door. They know what's coming.
The second Goldman Sachs bankruptcy will be even faster, and this time, there will be no way out.
Posted by fdralloveragain at 9:00 AM