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Thread: Goldman's bailout earns $1.4bn profit for taxpayers

  1. #21
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    Re: Goldman's bailout earns $1.4bn profit for taxpayers

    Quote Originally Posted by Liz Peeps View Post
    .....which is?

    What role to do you think the derivatives market played in this crisis?

    link?
    Sorry, I don't have the energy or will right now to give you a primer on what happened, I'll let obvious child field this one if he feels like it. I'm you could find info on various sides of the argument if you google in "derivatives financial crisis"[/QUOTE]

    That's fine, because I'm not asking for a primer on anything. I'm asking you for a shred of evidence to support your claim that but for M2M, Goldman would not have turned a profit last quarter.
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    Re: Goldman's bailout earns $1.4bn profit for taxpayers

    Quote Originally Posted by RightinNYC View Post
    That's fine, because I'm not asking for a primer on anything. I'm asking you for a shred of evidence to support your claim that but for M2M, Goldman would not have turned a profit last quarter.
    Are you aware of any bank that did it or is it news to you that the accounting standards change?

    I did ask you other questions in the other post to try to learn more about your understanding of the crisis. It was my understanding that debt contracts and debt shuffling special purpose entities are at the core of the problems in the banking structure of much of the world. You conveniently ignored them. I'm not asking you to go dig up stuff on the internet about stuff that you should have been paying attention to as it happened, I'm just asking what do you think is at the core of the crisis. I mean, you seem to think it was a case that could be solved with a simple TARP bill. Is that how it works New York?

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    Re: Goldman's bailout earns $1.4bn profit for taxpayers

    My problem with the bailouts isn't so much the waste of taxpayer dollars as it is the fact that the government interfered in the economy instead of letting bad businesses die.

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    Re: Goldman's bailout earns $1.4bn profit for taxpayers

    Quote Originally Posted by Dav View Post
    My problem with the bailouts isn't so much the waste of taxpayer dollars as it is the fact that the government interfered in the economy instead of letting bad businesses die.
    But if you were to go by the original post, this appears to be a huge profit for the taxpayer! Maybe they can send some of that profit my way. They want people to spend, let us have the fruits of our gambled money.

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    Re: Goldman's bailout earns $1.4bn profit for taxpayers

    Quote Originally Posted by Liz Peeps View Post
    Are you aware of any bank that did it or is it news to you that the accounting standards change?
    I don't know what this means.

    I did ask you other questions in the other post to try to learn more about your understanding of the crisis. It was my understanding that debt contracts and debt shuffling special purpose entities are at the core of the problems in the banking structure of much of the world. You conveniently ignored them.
    And it's my understanding that this doesn't have **** to do with what we're talking about, which is whether the easing of accounting rules allowed Goldman to manufacture $3.44b of profit on paper.

    Goldman's 10-Q for last quarter is up, so why don't you hop over there and show me where it says that. Here, I'll even give you the link:

    Goldman Sachs | Investors - Form 10-Qs
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    Re: Goldman's bailout earns $1.4bn profit for taxpayers

    Quote Originally Posted by RightinNYC View Post
    I don't know what this means.



    And it's my understanding that this doesn't have **** to do with what we're talking about, which is whether the easing of accounting rules allowed Goldman to manufacture $3.44b of profit on paper.

    Goldman's 10-Q for last quarter is up, so why don't you hop over there and show me where it says that. Here, I'll even give you the link:

    Goldman Sachs | Investors - Form 10-Qs

    This doesn't prove at all Goldman Sachs didn't benefit from the accounting standards. If for some reason you're so sure they didn't count their liabilities as assets, then what makes you so sure a counterparty to Goldman didn't as well? It's like you think Goldman Sachs sits in a bubble making money somehow, completely independent of all other institutions and individuals in the world.

    Do you know if Goldman bought puts on AIG? Do you have ANY insight into the decisions Goldman made?

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    Re: Goldman's bailout earns $1.4bn profit for taxpayers

    Quote Originally Posted by Liz Peeps View Post
    This doesn't prove at all Goldman Sachs didn't benefit from the accounting standards.
    That's fine, because I'm not trying to prove that they didn't. You, on the other hand, are claiming that they did. If you don't have anything to support that, I'm not going to entertain you anymore.

    If for some reason you're so sure they didn't count their liabilities as assets, then what makes you so sure a counterparty to Goldman didn't as well? It's like you think Goldman Sachs sits in a bubble making money somehow, completely independent of all other institutions and individuals in the world.

    Do you know if Goldman bought puts on AIG? Do you have ANY insight into the decisions Goldman made?
    Which has what to do with M2M?
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    Re: Goldman's bailout earns $1.4bn profit for taxpayers

    Quote Originally Posted by RightinNYC View Post
    That's fine, because I'm not trying to prove that they didn't. You, on the other hand, are claiming that they did. If you don't have anything to support that, I'm not going to entertain you anymore.
    And yet you have no real insight to what happened, and feel satisified. Hmm, interesting.


    Which has what to do with M2M?
    Because if any of Goldman counterparties are able to stay alive because of terrible accounting standards, it will essentially exist only to steal away capital in the market to pay off it's debt, even though they should default on their debts since in all reality they never should have been able to make it past the reckoning of their debt.

    I know I know, all you're gonna say is a one word reply asking "link?" And no, it's dinner time. So cya.

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    Re: Goldman's bailout earns $1.4bn profit for taxpayers

    Quote Originally Posted by RightinNYC View Post
    Setting aside the problems with your position that were raised in that thread, I don't see anything indicating that banks like JPMorgan or GS are "only profitable because they don't have to mark their liabilities to market value," which was my objection to LP's statement.
    That requires a bit of understanding of what M2M is. When the M2M rules were suspended, firms like GS and JPM don't have to take mandatory accounting right downs which hit the income statement. Previously, when the value of their L1 and L2 assets are impaired, the impairment reduces income. Not having to take the impairments no longer reduces income, and in some cases, into the red. I'm not so sure the impact now given the fact that much of the impairments have already been taken, but it's likely that there is still some significant impact or in this case, no longer significant impact.

    I very much doubt that M2M is the reason why GS turned a profit last quarter.
    Partially. Some of it is due to accounting rules which allow firms to book income when the value of the debt they owe is much more than the value of the debt on the market.
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    Re: Goldman's bailout earns $1.4bn profit for taxpayers

    Quote Originally Posted by obvious Child View Post
    That requires a bit of understanding of what M2M is. When the M2M rules were suspended, firms like GS and JPM don't have to take mandatory accounting right downs which hit the income statement. Previously, when the value of their L1 and L2 assets are impaired, the impairment reduces income. Not having to take the impairments no longer reduces income, and in some cases, into the red. I'm not so sure the impact now given the fact that much of the impairments have already been taken, but it's likely that there is still some significant impact or in this case, no longer significant impact.

    Partially. Some of it is due to accounting rules which allow firms to book income when the value of the debt they owe is much more than the value of the debt on the market.
    I understand how the theory works. What I'm asking for is evidence that the effect of this shift was such that without it, they would not have turned a profit.

    Even if we assume that everything you've said is true, we're no closer to knowing whether this shift allowed them to inflate their profits by $1 or by $1T.
    People sleep peaceably in their beds at night only because rough men stand ready to do violence on their behalf.

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