DID you hear the news? Goldman Sachs minted 94 new partners this week, a designation that comes not just with a fancy title but with the promise of untold riches this bonus season and for years to come.
Trouble is, the firm seems to have forgotten the 300 million new partners it acquired weeks earlier when the US taxpayer footed the bill for a $10 billion loan to Goldman on extremely generous terms.
Yes, get ready for it. While the rest of America is hunkering down for the worst Christmas in 25 years, Wall Street’s elves are merrily at work socking away at least $20 billion to be paid out in bonuses, and that’s just for the three “investment” banks still standing – Goldman, Morgan Stanley and Merrill Lynch.
After taking $10 billion from Uncle Sam and after shareholders have seen shares fall more than 50 percent.
Which brings me to the next outrage. To begin with, none of these firms are investment banks anymore. Perhaps the good folks at Goldman forgot that they now work for a commercial bank.
No, why bother with those troubling technicalities if you can be paid like an investment banker in the halcyon days, or better yet, like a partner in one of Wall Street’s most exclusive private partnerships. One problem: Goldman is no longer private, exclusive or hugely profitable.
Goldman defenders will tell you that the firm was “forced” to take Uncle Sam’s money last month, so as not to make the rest of the takers feel bad. As such, the argument goes, the firm has every right to go ahead with bonuses as usual. Don’t buy that for a minute.
In a letter that was circulating around Wall Street Friday, United Steelworkers President Leo Gerard presented Treasury Secretary Hank Paulson with a detailed analysis of Treasury’s investment in the firm Paulson once headed. It notes that just 20 days before Goldman announced that it would “accept” the Treasury’s $10 billion investment, Warren Buffett invested $5 billion in Goldman.
Although Buffett basically acquired the same type of preferred stock as Uncle Sam, taxpayers will get a 5 percent dividend for the first five years, while Buffett will get 10 percent. They don’t call him the Oracle for nothing.
TERRY KEENANis anchor of Cashin’ In, an investing program that appears on Fox News Channel on Saturday mornings at 11:30. E-mail terry.keenan@foxnews.com.