Goldman And Buffett Plan To Steal CIT's Business While Company Is Bankrupt
The latest plot by OCTOsquared (the Octopus and the Octogenarian, well, technically Buffett is still 79 years young, but give him a few hundred days until August 1, 2010) is to take advantage of CIT's bankruptcy by poaching thousands of small and medium business clients. The timing, of course, could not be more opportunistic. Bloomberg reports that "Goldman Sachs Group Inc., under fire in Washington for setting aside billions of dollars for bonuses a year after getting a taxpayer bailout, is preparing to team up with billionaire investor Warren Buffett to provide assistance to small businesses, said people familiar with the matter." This so-called "charitable effort", which is nothing but a vulture scheme to take advantage of yet more market dislocations and have the octopus grow a few more tentacles in its endless quest of financial monopolist supremacy, will of course be spun as indicative of the dynamic duo's endless humanism. That the squid will have the backing of the greatest US cheerleader in recent history (else those written index puts may rear their ugly head once again), biggest TARP beneficiary, and the largest Goldman shareholder, is also not all that surprising.
Some more observations on the OCTOplot from Bloomberg:
The charitable effort, which may be announced as soon as today, coincides with one of the Obama administration’s top economic priorities: spurring hiring at small companies. The initiative would aim to provide assistance -- ranging from counseling to obtaining funding -- to 10,000 U.S. businesses, according to the people, who declined to be identified before the program is announced. Buffett’s Berkshire Hathaway Inc. is the largest shareholder in New York-based Goldman Sachs.
Lucas van Praag, a spokesman for Goldman Sachs, declined to comment. Buffett didn’t reply to an e-mail seeking comment sent to his assistant, Carrie Kizer.
And here is why you should expect another press conference by Obama any minute now to announce this massively charitable development by the firm that broke all statistical rules over the past 6 months.
Goldman Sachs, the most profitable securities firm in Wall Street history, is trying to dispel criticism from lawmakers and pundits who portray the company as the greedy face of a financial industry whose excessive risk-taking fueled the credit crisis. Unlike competitors that make home loans and provide small business credit lines, more than 90 percent of Goldman Sachs’s pretax earnings this year came from trading and principal investments. [in other words, as Dylan Ratigan, claims a government backstopped casino]
The company has notified President Barack Obama’s administration about the small-business initiative, according to one of the people familiar with the program.
Truly, a very generous effort by Goldman as it seeks to break the $1 million compensation per employee threshold:
“Goldman Sachs seems to salute no flag but their own corporate logo,” Andy Stern, president of the 2.1 million- member Service Employees International Union, said at a rally yesterday in front of Goldman’s Washington office. He accused the company’s executives of “gorging themselves” on bonuses made possible by tax money from working Americans.
Because Goldman Sachs repaid its TARP capital injection earlier this year, the government has no direct say over its pay. The Treasury has subjected seven companies, including Citigroup Inc. and AIG, to compensation restrictions.
Needless to say this is not the first time Goldman has attempted to prove to people that deep down it is merely an altruistic messenger of god.
In November 2007, a month before awarding employees bonuses that were the biggest ever in the securities industry, the company announced plans to raise as much as $1 billion for a philanthropic fund called Goldman Sachs Gives.
The program was unveiled six months after John Whitehead, who retired as co-chairman of the firm in 1984 and oversaw its foundation, criticized Goldman Sachs’s “shocking” pay and said he’d tried unsuccessfully a year earlier to persuade the firm to donate $1 billion to charity.
The fund was formed with a $50 million contribution from Goldman Sachs and $80 million from partners at the firm, each of whom has his or her own account and can guide how the money is spent.
In March 2008, the company said it planned to contribute $100 million over five years to provide business education to women in developing nations and elsewhere through an initiative called 10,000 Women. The program has been established in 18 countries and has more than 60 partners.
In the meantime, we are happy to see even more tax documents on the horizon which will disclose yet more quantized trade data for Goldman's prop desk, and also we can not wait to see the Goldman proxy due out in a few short weeks and make quite public the hundreds of millions in dollars to be paid to some of the least deserving humans in history.