Michael J. Golde's  Instablog

But what has happened to Wall Street since the economic meltdown last Fall? After excessive risk-taking and unbridled greed at the "too-big-to-fail-banks"? Certainly, they haven't gotten slaughtered. In fact, just the opposite has occurred at many of those banks.

Take Goldman Sachs. After receiving $10 billion of TARP funds and another $12.9 billion of TARP largess via AIG, thereby enabling Goldman to receive a 100% return on its AIG exposure which would not have happened absent massive government intervention, plus easy FED money, Goldman within a year of its potential demise has reported record profits and the intention to make record bonus payments to employees. So, at least in this instance, the pigs are making the most money of all thanks to the American taxpayer.

But even their "own" such as George Soros are now turning on them because the public outrage over excessive, undeserved bonuses is justified. For someone of his stature to publicly chastise the piggishness on Wall Street in itself is remarkable since he accumulated his fortune based on trading stocks and currencies (though at risk to himself and his investors). Nevertheless, the majority of bankers (i.e., bonus recipients) somehow still think that they really earned their bonuses even though their downside risk was virtually non-existent due to government policies and support.

Alas, perhaps we need to modify the conventional Wall Street wisdom to add that "pigs get slaughtered except the socialist ones who make the most money of all."

No positions: GS, AIG