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Monday, September 29, 2008

Pictures from the Floating World

posted by on September 29 at 13:15 PM

About Henry Paulson’s tax loophole (from a 2006 story in Forbes):

The Goldman Sachs boss will see his annual paycheck shrink from last year’s $38 million to a paltry $183,500 once he takes over the job of Treasury secretary.

But don’t shed too many tears for Paulson. He has amassed quite a fortune—a roughly $700 million equity stake in Wall Street’s premier investment banking house. And soon, he will have the chance to diversify a good chunk of those holdings without paying a dime to the Internal Revenue Service.

By accepting the Treasury post, Paulson is poised to take advantage of a tax loophole that allows government officials to defer capital gains taxes on assets they have to sell to avoid a conflict of interest, as long as the proceeds are reinvested in government securities or a broad array of mutual funds approved by the government within 60 days.

And about Goldman Sachs (from a story today in the New York Times):

The beginning of the end is felt even in the halls of the white-shoe firm Goldman Sachs, which, among its Wall Street peers, epitomized and defined a high-risk, high-return culture.

Goldman is the firm that other Wall Street firms love to hate. It houses some of the world’s biggest private equity and hedge funds. Its investment bankers are the smartest. Its traders, the best. They make the most money on Wall Street, earning the firm the nickname Goldmine Sachs. (Its 30,522 employees earned an average of $600,000 last year — an average that considers secretaries as well as traders.)

And about the stock market (from a story today in the Economist):

At one point the Dow Jones industrial average had fallen than 700 points, its biggest intraday drop ever.

And about the future (from a story today in US News & World Report):

After Bailout, Economy Will Still Be Lousy

RSS icon Comments


this is all so depressing. of course, we saw it coming a mile away, but now it's just seem so...awful. my prediction: those in the drug trade will do quite well in the coming years.

Posted by ellarosa | September 29, 2008 1:28 PM

We are going to be fine. The last thing we need to do is to give these fucking thugs, and that is all they are, $700 Billion under the threat we are all doomed if we don't.

Bush and his crooks have lied to us too many times. Besides, there is no one who is positive that the bail out would have worked in the first place; it was just Bush's cronies last push to get the last couple of pennies out of the treasury before they dump it on Obama's lap in January.

Congress finally found some balls and stood up to Bush and Wall Street. There just maybe some hope after all.

Posted by Andrew | September 29, 2008 1:33 PM

Goldman is the company that everyone else loves to hate because they make money better than any other company in their class.

Posted by Bellevue Ave | September 29, 2008 1:38 PM

Their average salary isn't really that impressive considering that I'm sure there are fund managers pulling in 8+ figures. I wanna know their median salary, that's gonna be far more telling because they probably have a janitor that makes like 40k or something.

Posted by Super Jesse | September 29, 2008 1:42 PM

I propose nationalizing just Goldman Sachs, and then executing every single one of those 30,522 (with an exemption for anyone making less than, say, $50k). A hundred a day, in Battery Park. How do you like that suggestion, BA?

Posted by Fnarf | September 29, 2008 1:44 PM

I think you either are losing money in your 401(k) in a bad way today or you're trying to get a rise out of me.

Posted by Bellevue Ave | September 29, 2008 1:50 PM

I know why it failed! Because you can't vote in good conscience for a half millon dollar golden parachute. Even if it were paid out above that, which wouldn't be taxed, we'd be in the same place at tax time.

I'm glad it failed!

Posted by Homo Will | September 29, 2008 1:52 PM

If this was the People's Republic of China, these officials would be led out in front of cameras and shot.

Posted by if only | September 29, 2008 2:00 PM

Dang! I got behind on my SLOG reading. Someone remind me again why this is all Jonathan Golob's fault.

Posted by Colleen | September 29, 2008 2:00 PM

Hmm, Paulson was at Goldman, it gets bailed out, but its competition is allowed to go under and be purchased...


Posted by Jeremy from Seattle | September 29, 2008 2:01 PM

@8 and then we could down a big glass of melamine milk while inhaling various dangerous particulate matter and then be unable to post our thoughts online. Police states are so great!

Posted by Bellevue Ave | September 29, 2008 2:02 PM

how was goldman bailed out by the government? They received infusions of cash from private investors (either individual or corporate)

Posted by Bellevue Ave | September 29, 2008 2:03 PM

@5 Sweet! And then can we raid their houses in the Hamptons and their condos in the city and take all their good stuff and re-distribute it too?

Viva la Revolution!!!!

Posted by PopTart | September 29, 2008 2:06 PM

I'm down for all sorts of executions, but can we use the guillotine? I want to knit as the heads roll into the baskets.

Posted by itsmadamedefarge | September 29, 2008 2:20 PM

Ok, we've cleared the deck and are back to where we were pre-Bush in the stock market. Let's get Obama in office and rebuild ourselves into a powerhouse again.

Posted by laterite | September 29, 2008 2:42 PM

Goldman has not been bailed out directly . . . yet. But as a result of AIG getting bailed out, Goldman avoided a $20 billion dollar loss on its credit derivatives which were insured by AIG. So, bailing out AIG directly saved Goldman indirectly

Posted by Chris | September 29, 2008 2:51 PM

Seven hundred billion dollars! What fucking insanity. Who told people they won't lose money in the stock market? This is a rich peoples bail out. If I invested my whole retirement in the stock market and expected to have just oodles of money some day, I'd be a fool. They should flood the Small Business Administration with cheap capital for loans and give the people another stimulus payment. Fuck Wall Street.

Posted by Vince | September 29, 2008 2:59 PM

that 700 bil number? That number wasn't chosen by any specific criteria except it was a shit ton of money.

Posted by Bellevue Ave | September 29, 2008 3:00 PM

@18, To back up BA here, let me once again post the quotation from a spokeswoman at Treasury to last Tuesday:

"It's not based on any particular data point," a Treasury spokeswoman told Tuesday. "We just wanted to choose a really large number."

Can I play pull a really big number out of my butt too? Uh, uh, uuuuuuunh. Let me clean it off a bit....Oooo, looks like 62 quadrillion.

Posted by PopTart | September 29, 2008 3:45 PM

@6, I am absolutely SHOCKED that you would suggest even for a second that I might get a smidgen of enjoyment from winding you up.

Posted by Fnarf | September 29, 2008 3:55 PM

@19: If I were a kid and it was still 1970 or something, I would have said, "Nuh-uh, 62 GOOGOL! But things were different then.

Posted by Timo | September 29, 2008 3:56 PM

Paulson is a good guy. He didn't even want the job to begin with. He's given an insane amount of money to conservation organizations. Most of his fortune will be left to environmental groups.


Posted by green | September 29, 2008 3:59 PM

@21: Indeed they were. For one, our financial overlords were more prudent in their irresponsibility.

Posted by laterite | September 29, 2008 4:05 PM

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