Posted by Scarlett Lu
Goldman Sachs reported its earnings today. For the quarter, profits from trading and principal investment were $10.03 billion, up from $2.7 billion for the same quarter last year.
A year ago the company was saved by Treasury Secretary Hank Paulson, who intervened on its behalf. So it is interesting, to say the least, that last year's flirt with disaster turned out to be so great for Goldman Sachs. Now that they are a regular commercial bank they actually trade more, which makes sense: if the US Treasury covered my losses, I would also be happy to take major risks.
And they can lever up, since much of their assets are valued at what Goldman says they are worth.
What's more, compensation is up to $17 billion so far this year, up from $11 billion during the same period last year. That is $527,000 per employee, up 46% from last year's figure. I don't resent them that, since every Goldman employee I ever came in contact with was bright, competent and professional, so they probably deserve it.
Read more at: http://www.huffingtonpost.com/alan-schram/financial-crisis-worked-o_b_323184.html
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