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SUNDAY, NOVEMBER 8, 2009
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Goldman Readies Record Bonuses

Recession doesn't curb bank's bounty

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(Newser) – A wildly successful first half is pointing to the best year ever for Goldman Sachs, and that means record staff bonuses in the midst of the recession, the Guardian reports. Revenues have soared at the bank, which now has little competition; it promised in April that half of its nearly $2 billion first-quarter profit would go to employees. But some fear Goldman’s bonus plan could be dangerous.

Said a British MP: “Investment banks created the culture of excessive leverage, excessive risk, and excessive bonuses that led to the downfall of the financial system. Now they are cashing in and the same bonus culture has returned. The result must be we are being pushed to the edge of another crash.”

Bank execs testify on Capitol Hill in Washington, Wednesday, Feb. 11, 2009, before the House Financial Services Committee.
Bank execs testify on Capitol Hill in Washington, Wednesday, Feb. 11, 2009, before the House Financial Services Committee.   (AP Photo/Manuel Balce Ceneta)
A man washes a cobblestone street beneath Goldman Sachs headquarters, center, in New York's financial district, Tuesday, Sept. 16, 2008.
A man washes a cobblestone street beneath Goldman Sachs headquarters, center, in New York's financial district, Tuesday, Sept. 16, 2008.   (AP Photo/Mark Lennihan)
In this Sept. 25, 2008 file photo, Lloyd C. Blankfein, CEO of Goldman Sachs, speaks at a luncheon at United Nations headquarters.
In this Sept. 25, 2008 file photo, Lloyd C. Blankfein, CEO of Goldman Sachs, speaks at a luncheon at United Nations headquarters.   (AP Photo/David Karp, file)
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ultramarine13
Jun 23, 09 12:46 AM CDT
Although I agree with you on the principle of bonuses (basically, rewarding success), these record bonuses come right on the heels of a government bailout for Goldman. So, why are they suddenly back to their old selves? They give out $1 billion in bonuses now, but what if in 6 months they are suddenly, and once again, out of capital? The cycle will just end up repeating itself. As they say, those who ignore history are doomed to repeat it.
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Observer
Jun 22, 09 11:28 AM CDT
Skunks do not change their stripes. I live on commissions so I appreciate the bonus model but the scale of the financial bonuses is extreme. How much value is created when these guys M&A their way across the universe. Sometimes none. MOre often they take away wealth and give back nothing. How many giant mergers have actually destroyed wealth - too many to count. But the Bankers got their fees anyway. I should be selling yachts. Reply
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Left-Blog
Jun 22, 09 11:38 AM CDT
All this is at the expense of the greatest good to the greatest number. Ayn Rand is in trouble: http://leftsolutions.wordpress.com/ayn-rand-sociopathic-politics/ Reply
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radnip
Jun 26, 09 6:16 AM CDT
If you ethically and legally make $100 million by throwing some paper around, which small investors pay for or groups of small investors pay for and those investors just get their money back or even lose money, but you ethically (what's that mean in the paper-throwing business?) and legally made $100 mil selling it, do you deserve your million or not?
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