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Goldman Sachs staff told to avoid big purchases
As bankers once again receive huge bonuses, Goldman chief executive Lloyd Blankfein has cautioned his staff not to flaunt their riches to an angry public
As Goldman Sachs employees line up to receive some of the biggest bonus payouts in the firm's 140-year history, they have been warned by their chief executive not to flaunt their riches.
According to the New York Post, Lloyd Blankfein has cautioned his staff against 'big-ticket' purchases, amid a torrent of bad publicity for the Wall Street bank and public outcry about inflated rewards despite the global recession.
In 2008 the bank required a $10bn federal bailout to survive and reported its first loss in nine years. But it has enjoyed a spectacular first half of 2009, recently reporting a 65 per cent rise in its second quarter profits. The resulting $20bn pay and bonus pot equates to $900,000 for each of Goldman's 29,400 employees.
Blankfein told his bankers to avoid making lavish purchases in what is "a sensitive time" for the investment bank, a company executive told the Post. The source added: "He [Blankfein] wants to make sure that we're not being seen living high on the hog."
His warning comes after Goldman Sachs was hit by a firestorm of bad publicity over its uncanny ability to produce record profits in the midst of a recession. Last month Rolling Stone writer Matt Taibbi called the firm "a great vampire squid wrapped around the face of humanity", responsible for no less than six disastrous financial bubbles.
A recent New York magazine article insinuated that Goldman was one of several banks to benefit from the $173bn bail-out of troubled insurance giant American International Group (AIG).
Since then Goldman Sachs has been approached by a number of public relations experts, all keen to help the bank shed its "Gordon Gekko look", as research consultant Anne Rivers put it to the Financial Times. But industry observers are divided over whether that is necessary. Goldman Sachs has paid back its bailout money and the storm could pass.
"All of this giant squid language they can pretty much brush off," William Barker of Brand Finance told the FT. "My guess is that their customers are probably very happy with them." ·
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The God of capitalism is CAPITAL. The banking/finance sector's simple function is to channel this God - savings (pension funds, life insurance funds, bank deposits etc) to investors (manufacturers etc). These banksters standing at the entrance to this God are making short term superprofits (hence the bonuses) and conveniently getting Government to end up paying for their long term cyclical losses.
What is required is 1)legislation to skim off the superprofits into a long term insurance fund 2)Every economy is a zero sum two person game,these gatekeepers (by the power of their position) are getting away with inordinate remuneration at the expense of the rest of the citizenry,super taxation on these bonuses may also be considered 3) The public accounts of all financial institutions should be made to clearly disclose WHERE this profit is being made and how much is being distributed as bonuses (including names of recipients) as a means of fostering more competition. 4)BEFORE any bonus can be declared their accounts have to be submitted to the Revenue Authority to take a legislated first tax on the super profit before it can be distributed (legislation is required to make sure ALL bonus contracts with employees are made with this proviso in mind).
A Margaret Thatcher like 'magic of the marketplace' hands off panacea approach is clearly not working , we are in the grip of a huge falsehood where the banking/finance sector (whose job is simply to act as a conduit for savings to investment), is now thought of as a wealth creator instead of manufacturing and the like !! Also the Trustees of long term capital also have to wake up (to the interests of their unsuspecting pension holding constituents) before the banksters, barrow boys and the like quaff all their pension savings in gay jeroboamry in the City !!