# Goldman Sachs was not bailed out **URL:** \ **Category:** Great Debates\ **Created:** [July 22, 2009, 6:16pm UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881 "2009-07-22T18:16:51Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Dick\_Dastardly](https://avatars.discourse-cdn.com/v4/letter/d/c4cdca/32.png) [@Dick\_Dastardly](https://boards.straightdope.com/u/Dick_Dastardly)\ **Post date:** [July 23, 2009, 3:26am UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/41 "2009-07-23T03:26:26Z")
> [@LonghornDave](#): > > Sure. Here’s an easy one for you. Please explain how you are right when you say “still haven’t bought back their TARP warrant.” Five hours ago it was announced they had, but that leaves the money they owe the TALF, the various Maiden Lane vehicles and however much they got from all the money the Fed have lent out that they’re refusing to say went where, the money they’re making with FDIC guarantees, etc. ---
**Author:** ![adhay](https://avatars.discourse-cdn.com/v4/letter/a/ecd19e/32.png) [@adhay](https://boards.straightdope.com/u/adhay)\ **Post date:** [July 23, 2009, 3:28am UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/42 "2009-07-23T03:28:03Z")
> [@LonghornDave](#): > > Well, you’ve clearly not read any of the posts in this thread yet. There is so much wrong here it’s hard to know where to start. Look who’s talkin’.🙂 ---
**Author:** ![LonghornDave](https://avatars.discourse-cdn.com/v4/letter/l/a87d85/32.png) [@LonghornDave](https://boards.straightdope.com/u/LonghornDave)\ **Post date:** [July 23, 2009, 3:30am UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/43 "2009-07-23T03:30:37Z")
> [@Dick\_Dastardly](#): > > It was “eased” to the extent banks no longer have to mark their assets to the market price. They can tweak a computer model to show any value they want for their assets and declare that the value. Have you ever heard of an auditor? Do you have any concept of what they do? Also, nice job in glossing over the fact that it’s not effective until 6/30/09 and yet you think it affected ratios from October 2008. ---
**Author:** ![LonghornDave](https://avatars.discourse-cdn.com/v4/letter/l/a87d85/32.png) [@LonghornDave](https://boards.straightdope.com/u/LonghornDave)\ **Post date:** [July 23, 2009, 3:33am UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/44 "2009-07-23T03:33:39Z")
> [@Dick\_Dastardly](#): > > Five hours ago it was announced they had, but that leaves the money they owe the TALF, the various Maiden Lane vehicles and however much they got from all the money the Fed have lent out that they’re refusing to say went where, the money they’re making with FDIC guarantees, etc. Wow that’s neat. I started this topic 9 hours ago and mentioned it but somehow it was only announced 5 hours ago. How does that work? ---
**Author:** ![LonghornDave](https://avatars.discourse-cdn.com/v4/letter/l/a87d85/32.png) [@LonghornDave](https://boards.straightdope.com/u/LonghornDave)\ **Post date:** [July 23, 2009, 3:35am UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/45 "2009-07-23T03:35:57Z")
> [@adhay](#): > > Look who’s talkin’.🙂 What am I wrong about? ---
**Author:** ![adhay](https://avatars.discourse-cdn.com/v4/letter/a/ecd19e/32.png) [@adhay](https://boards.straightdope.com/u/adhay)\ **Post date:** [July 23, 2009, 3:36am UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/46 "2009-07-23T03:36:09Z")
> [@](#): > > Did Goldman Sachs have a time machine? Evidently. The story continues. > [@](#): > > Two more numbers stand out from that stunning first-quarter turnaround. The bank paid out an astonishing $4.7 billion in bonuses and compensation in the first three months of this year, an 18 percent increase over the first quarter of 2008. It also raised $5 billion by issuing new shares almost immediately after releasing its firstquarter results. Taken together, the numbers show that Goldman essentially borrowed a $5 billion salary payout for its executives in the middle of the global economic crisis it helped cause, using halfbaked accounting to reel in investors, just months after receiving billions in a taxpayer bailout. > > Even more amazing, Goldman did it all right before the government announced the results of its new “stress test” for banks seeking to repay TARP money — suggesting that Goldman knew exactly what was coming. ---
**Author:** ![Dick\_Dastardly](https://avatars.discourse-cdn.com/v4/letter/d/c4cdca/32.png) [@Dick\_Dastardly](https://boards.straightdope.com/u/Dick_Dastardly)\ **Post date:** [July 23, 2009, 3:43am UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/47 "2009-07-23T03:43:00Z")
> [@LonghornDave](#): > > Have you ever heard of an auditor? Do you have any concept of what they do? Also, nice job in glossing over the fact that it’s not effective until 6/30/09 and yet you think it affected ratios from October 2008. The major banks have been lying about their liabilities since long before mark to market was suspended in April. They could delay marking them to market value from the onset of the crisis to when m to m was suspended because the market for mortgage-backed securities froze up entirely. However by about march this year some of the toxic stuff started trading at about 20c on the dollar. The situation was becoming untenable and they all would have had to declare insolvency had m to m not been suspended soon after the mortgage securities market unfroze. The whole premise of the thread is nuts. there are hundreds of billions of dollars that the Fed has lent out in various programs that have zero oversight and the Fed refuses to say who has been loaned what. GS are the biggest investment bank, a primary dealer and a major player or the major player in a lot of the various mortgage/credit securities markets. It’s inconcievable that they’re not in recept of more money than is officially known. ---
**Author:** ![Dick\_Dastardly](https://avatars.discourse-cdn.com/v4/letter/d/c4cdca/32.png) [@Dick\_Dastardly](https://boards.straightdope.com/u/Dick_Dastardly)\ **Post date:** [July 23, 2009, 3:44am UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/48 "2009-07-23T03:44:53Z")
> [@LonghornDave](#): > > Wow that’s neat. I started this topic 9 hours ago and mentioned it but somehow it was only announced 5 hours ago. How does that work? Nine plus hours ago then. ---
**Author:** ![LonghornDave](https://avatars.discourse-cdn.com/v4/letter/l/a87d85/32.png) [@LonghornDave](https://boards.straightdope.com/u/LonghornDave)\ **Post date:** [July 23, 2009, 3:47am UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/49 "2009-07-23T03:47:33Z")
> [@adhay](#): > > Evidently. The story continues. Yes, once again the Rolling Stone shines with its journalism. Explain how raising equity is borrowing? At least Rolling Stone got an expert to help them out: > [@](#): > > “They seemed to know everything that they needed to do before the stress test came out, unlike everyone else, who had to wait until after,” says Michael Hecht, a managing director of JMP Securities. “The government came out and said, 'To pay back TARP, you have to issue debt of at least five years that is not insured by FDIC — which Goldman Sachs had already done, a week or two before.” Okay, in what world is common stock equivalent to issuing debt? Also, please show me where the government said that to pay back TARP, you have to issue debt? ---
**Author:** ![LonghornDave](https://avatars.discourse-cdn.com/v4/letter/l/a87d85/32.png) [@LonghornDave](https://boards.straightdope.com/u/LonghornDave)\ **Post date:** [July 23, 2009, 3:50am UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/50 "2009-07-23T03:50:02Z")
> [@Dick\_Dastardly](#): > > The major banks have been lying about their liabilities since long before mark to market was suspended in April. They could delay marking them to market value from the onset of the crisis to when m to m was suspended because the market for mortgage-backed securities froze up entirely. However by about march this year some of the toxic stuff started trading at about 20c on the dollar. The situation was becoming untenable and they all would have had to declare insolvency had m to m not been suspended soon after the mortgage securities market unfroze. > > The whole premise of the thread is nuts. there are hundreds of billions of dollars that the Fed has lent out in various programs that have zero oversight and the Fed refuses to say who has been loaned what. GS are the biggest investment bank, a primary dealer and a major player or the major player in a lot of the various mortgage/credit securities markets. It’s inconcievable that they’re not in recept of more money than is officially known. You can’t even get a single sentence out without showing your complete lack of understanding. We’re talking about marking to market of assets not liabilities, genius? ---
**Author:** ![Dick\_Dastardly](https://avatars.discourse-cdn.com/v4/letter/d/c4cdca/32.png) [@Dick\_Dastardly](https://boards.straightdope.com/u/Dick_Dastardly)\ **Post date:** [July 23, 2009, 3:53am UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/51 "2009-07-23T03:53:18Z")
> [@LonghornDave](#): > > You can’t even get a single sentence out without showing your complete lack of understanding. We’re talking about marking to market of assets not liabilities, genius? And some of those assets are liabilities! You’re just nitpicking at my choice of words now, not actually answering anything. ---
**Author:** ![AdmiralCrunch](https://avatars.discourse-cdn.com/v4/letter/a/6f9a4e/32.png) [@AdmiralCrunch](https://boards.straightdope.com/u/AdmiralCrunch)\ **Post date:** [July 23, 2009, 4:01am UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/52 "2009-07-23T04:01:54Z")
> [@LonghornDave](#): > > Further, according to Goldman Sachs, prior to AIG’s insolvency, they had already received $7.5 billion in collateral and had hedged the majority of the remaining exposure with third parties. It is their contention that they had immaterial exposure to AIG. > > [Link](http://www.nytimes.com/2009/03/21/business/21goldman.html?_r=1&ref=business) This just in: Publicly traded-company says its finances are great! Just trust them on this one, because they didn’t report earnings for December 2008 when they transitioned to a different reporting calendar, the time period covering the AIG payments and exposures. The idea that poor little Goldman Sachs got pushed around by the big bad government is a fucking joke. If someone knows how to read a contract and cheat the rules it’s GS. If they were in good shape a regulator couldn’t touch them, especially before they applied to become a bank holding company specifically to get TARP funds. They paid back the stigma-causing TARP funds but still issued billions of government backstopped debt, accepted billions in cash from AIG, and directly benefited from the de-facto guarantee of big banks that restored confidence in the financial sector that led the stock rally while Goldman called for more cash from the public. Bail-out isn’t the correct term because at this point it’s just a polemic bit of nonsense. Bottom line is GS is tens of billions of dollars richer because the govt. stopped the economy from imploding, and all we got was one bonus-restricted pay period. Call it what you want, but you still haven’t shown anything other than two links to “talking points” from Paulson’s meeting, and a bunch of statements from banks saying they have plenty of money. Regulators can’t close investment banks for no reason. If Goldman didn’t want money they had the power to refuse it. Instead they get to pretend like they didn’t want it and rake in the money. ---
**Author:** ![LonghornDave](https://avatars.discourse-cdn.com/v4/letter/l/a87d85/32.png) [@LonghornDave](https://boards.straightdope.com/u/LonghornDave)\ **Post date:** [July 23, 2009, 4:02am UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/53 "2009-07-23T04:02:45Z")
> [@Dick\_Dastardly](#): > > And some of those assets are liabilities! > > You’re just nitpicking at my choice of words now, not actually answering anything. No, I’m pretty sure that the assets are not liabilities. You mean to say that they are debt instruments. Welcome to the wonderful world of a bank’s balance sheet. It’s pretty crazy; loans are their assets and deposits are their liabilities. It’s not at all nitpicking. It’s a pretty fundamental point of the topic. ---
**Author:** ![LonghornDave](https://avatars.discourse-cdn.com/v4/letter/l/a87d85/32.png) [@LonghornDave](https://boards.straightdope.com/u/LonghornDave)\ **Post date:** [July 23, 2009, 4:11am UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/54 "2009-07-23T04:11:30Z")
> [@AdmiralCrunch](#): > > This just in: Publicly traded-company says its finances are great! Just trust them on this one, because they didn’t report earnings for December 2008 when they transitioned to a different reporting calendar, the time period covering the AIG payments and exposures. [12/1/07 - 11/28/08](http://www.sec.gov/Archives/edgar/data/886982/000095012309001278/y74032e10vk.htm) [11/29/08 - 3/27/09](http://www.sec.gov/Archives/edgar/data/886982/000095012309008055/y76709e10vq.htm) You were saying? ---
**Author:** ![Dick\_Dastardly](https://avatars.discourse-cdn.com/v4/letter/d/c4cdca/32.png) [@Dick\_Dastardly](https://boards.straightdope.com/u/Dick_Dastardly)\ **Post date:** [July 23, 2009, 4:14am UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/55 "2009-07-23T04:14:46Z")
> [@LonghornDave](#): > > No, I’m pretty sure that the assets are not liabilities. You mean to say that they are debt instruments. Welcome to the wonderful world of a bank’s balance sheet. It’s pretty crazy; loans are their assets and deposits are their liabilities. > > It’s not at all nitpicking. It’s a pretty fundamental point of the topic. Originally I posted : _The major banks have been lying about their liabilities since long before mark to market was suspended in April._ And those liabilities are things they are currently, due to the m to m suspension, still allowed to call assets. I think this is pretty clear to anybody and I’m sure you only picked up on it because you didn’t want to deal with the rest of the post. Anyway, now we’ve cleared that up, you can answer the rest of the post. ---
**Author:** ![LonghornDave](https://avatars.discourse-cdn.com/v4/letter/l/a87d85/32.png) [@LonghornDave](https://boards.straightdope.com/u/LonghornDave)\ **Post date:** [July 23, 2009, 4:14am UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/56 "2009-07-23T04:14:56Z")
> [@AdmiralCrunch](#): > > they applied to become a bank holding company specifically to get TARP funds. I realize you’re not the only uneducated person who has stated this. Please explain how it works that they became a bank holding company specifically to get TARP funds when at the time they became a bank holding company, the CPP did not exist. ---
**Author:** ![LonghornDave](https://avatars.discourse-cdn.com/v4/letter/l/a87d85/32.png) [@LonghornDave](https://boards.straightdope.com/u/LonghornDave)\ **Post date:** [July 23, 2009, 4:19am UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/57 "2009-07-23T04:19:10Z")
> [@Dick\_Dastardly](#): > > Originally I posted : > > _The major banks have been lying about their liabilities since long before mark to market was suspended in April._ > > And those liabilities are things they are currently, due to the m to m suspension, still allowed to call assets. I think this is pretty clear to anybody and I’m sure you only picked up on it because you didn’t want to deal with the rest of the post. > > Anyway, now we’ve cleared that up, you can answer the rest of the post. How many times do I have to state it? MTM easing isn’t effective until the 6/30/09 reporting period? With that in mind, I have no idea what you are trying to say. Please provide me with an example of an instrument that anybody is reporting as an asset that is really a liability due to MTM rules changes. Pick any company in the universe of companies. ---
**Author:** ![Dick\_Dastardly](https://avatars.discourse-cdn.com/v4/letter/d/c4cdca/32.png) [@Dick\_Dastardly](https://boards.straightdope.com/u/Dick_Dastardly)\ **Post date:** [July 23, 2009, 4:28am UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/58 "2009-07-23T04:28:19Z")
> [@LonghornDave](#): > > How many times do I have to state it? MTM easing isn’t effective until the 6/30/09 reporting period? With that in mind, I have no idea what you are trying to say. Please provide me with an example of an instrument that anybody is reporting as an asset that is really a liability due to MTM rules changes. Pick any company in the universe of companies. M to m was suspended last April. [http://online.wsj.com/article/SB123867739560682309.html](http://online.wsj.com/article/SB123867739560682309.html) And amazingly I don’t know of any asset any bank is putting a bs price on because no bank is publicly saying well, we’re claiming it’s worth this much but actually it isn’t. Now then, answer some of the questions you keep dodging : What about the money Goldman has been given from the TALF, the various Maiden Lane vehicles etc? Doesn’t that count as a bailout? Since the Fed has made hundreds of billions of dollars in loans that they won’t disclose, and seeing how Goldman are a major/main player in all the markets that trade the toxic securities, isn’t it a fair assumption that some of the secret bailout funds are bailing out GS? ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [July 23, 2009, 12:41pm UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/59 "2009-07-23T12:41:10Z")
I think that if Goldman really didn’t want the money, then they could have went to the media and said that they didn’t need the money but that Paulson was strong arming them to try and force them to take it. The ensuing firestorm would have been enormous. Especially since TARP was sold to Congress and the public as a plan to guarantee the toxic loans that the banks were holding, not to own equity in them. That was a shake and bake that Paulson was getting hit hard for at the time, and an accusation of banks being FORCED to sell this equity would have caused his head to be on a pike. ---
**Author:** ![LonghornDave](https://avatars.discourse-cdn.com/v4/letter/l/a87d85/32.png) [@LonghornDave](https://boards.straightdope.com/u/LonghornDave)\ **Post date:** [July 23, 2009, 3:15pm UTC](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881/60 "2009-07-23T15:15:13Z")
> [@Dick\_Dastardly](#): > > M to m was suspended last April. > > [http://online.wsj.com/article/SB123867739560682309.html](http://online.wsj.com/article/SB123867739560682309.html) > > And amazingly I don’t know of any asset any bank is putting a bs price on because no bank is publicly saying well, we’re claiming it’s worth this much but actually it isn’t. Look, why don’t you just admit you are wrong about this? You first stated that MTM was suspended “some time ago” as if we can’t trust historical financial statements. Now you’ve gone completely full circle and are acting like this will be a problem in the future because it was just enacted thus essentially negating every single prior post you’ve made on the subject. Also, I don’t need a history lesson on when the new interpretation was enacted as I’m the one who originally corrected you on the date. Finally, quit saying MTM was suspended when that is clearly not the case. Companies will have MTM gains and losses for the 6/30/09 reporting period and beyond. MTM has been eased; it’s a big difference. > [@Dick\_Dastardly](#): > > Now then, answer some of the questions you keep dodging : I’m not dodging anything. I like to respond to a point at a time, and when you throw out 15 random points that are not connected in any meaningful way in a single post, I’m not going to respond to all of them simultaneously. > [@Dick\_Dastardly](#): > > What about the money Goldman has been given from the TALF, the various Maiden Lane vehicles etc? Doesn’t that count as a bailout? > > Since the Fed has made hundreds of billions of dollars in loans that they won’t disclose, and seeing how Goldman are a major/main player in all the markets that trade the toxic securities, isn’t it a fair assumption that some of the secret bailout funds are bailing out GS? How about we start with TALF. I see no way that TALF is a bailout for a firm like Goldman Sachs considering how they are participating in it. If anything, you could say that the federal government is subsidizing firms like Goldman in bailing out of other companies. To expound on this, my understanding of TALF is that the Fed is providing high advance rate loans at relatively cheap rates to firms that will buy collateralized debt obligations to bring back demand in that market. The purpose would be to get the loans off of the originiating company’s balance sheet and hopefully spur more lending to things like the auto industry, student loans, SBA loans, etc. These loans are non-recourse. Why would you call that a bailout? If TALF wasn’t created, Goldman and others would probably just not buy the securities given the state of the market. I can see why you might call that a subsidy as TALF has essentially created a very low risk way of making good returns. I can’t for the life of me figure out why you would call it a bailout. [Previous page](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881.md?page=2) [Next page](https://boards.straightdope.com/t/goldman-sachs-was-not-bailed-out/503881.md?page=4)