Goldman Inspires Jealousy, Suspicion With Soaring Profits

By Mat Probasco,  Newser Staff
Posted Jul 13, 2009 2:55 AM CDT
This building on Broad Street in New York's Financial District houses brokerage firm Goldman Sachs.   (AP Photo/Richard Drew, file)
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(Newser) – Goldman Sachs is expected to announce stunning profits for the second quarter tomorrow, inspiring jealousy on Wall Street and suspicion on Main Street, as taxpayers wonder whether they've been taken for a ride, reports the New York Times. The bank repaid its multibillion dollar government loan last month, and could show a profit of $2 billion for the 3 months, which in turn is expected to translate into $18 billion in salary and bonuses this year. How'd they do it? By taking risks no one else is willing to take, analysts tell the Times.

Goldman capitalized on chaos in the financial markets, making a fortune trading bonds, buying and selling volatile currencies and commodities, and playing a roller-coaster stock market brilliantly. But it also cleaned up on fees for handling the stock offerings by other, less fortunate financial institutions desperate to raise cash. And it profited from the disappearance of rival Merrill Lynch. Said one less impressed analyst: "They exist, and others don’t, and taxpayers made it possible.”