$1.8B Goldman Sachs Profit Shocks Wall St.

A look behind the scenes at the omnipresent bank

(NEWSER) - Lloyd Blankfein likes to say he's "attained perfection," a plausible-sounding assertion now that Goldman Sachs has repaid its TARP funds and is dishing out mammoth bonuses. "I don’t want to put a cap on their ambition," the CEO says of his employees. "It’s hard for me to argue for a cap on their compensation." After visiting their inner sanctum at 85 Broad St., John Arlidge of London's Sunday Times offers a field guide to "the biggest swinging dicks in the financial jungle." More»

(NEWSER) - JPMorgan Chase, the largest bank to repay TARP money, posted second-quarter earnings of $2.7 billion—smashing analysts' predictions with a 36% increase in profit. The bank became America's second-largest after hoovering up Bear Stearns and Washington Mutual, and like Goldman Sachs it has used a boom in investment banking to offset lagging recovery in mortgage and credit markets. "This is a real tribute to Jamie Dimon, who's done a spectacular job in managing the firm through this difficult time," said one investor. More»

High-risk model hasn't changed, could lead to new crisis, says Reich

(NEWSER) - Goldman Sachs is back in the black, with trading and stock underwriting revenues at an all-time high—and that should scare you, former Clinton cabinet member Robert Reich writes in Salon. While Goldman's earnings may signal that the current crisis is abating, the bank hasn't modified high-risk strategies that forced the taxpayer to bail it out. And Goldman's latest success will only encourage competitors to do the same. More»

(NEWSER) - Banks who have taken TARP funds from the government are getting creative about the immigration restrictions that come with the bailout, the Wall Street Journal reports. Financial institutions relying on government assistance cannot hire foreign workers unless they prove that they have exhausted the supply of native talent. So they’re sending the foreign students they recruit at US colleges and grad schools to overseas offices. More»

Scathing op-ed costs shareholders $2.2B

(NEWSER) - Goldman Sachs shareholders had a bad day yesterday thanks to departing exec Greg Smith, who slammed the firm's " toxic and destructive " culture in a New York Times op-ed . The investment bank's shares dived 3.4% in trading yesterday, wiping $2.2 billion off its market value—although shares are still up 33% for the year. Former Goldman partners interviewed by Bloomberg describe Smith as relatively junior and an apparently disgruntled employee, although most of them agree with his criticisms of the firm's current management. More»