Tuesday, December 12, 2006

Goldman Sachs Profit Up 91%

Investment banking firm Goldman Sachs rocked the financial world by shattering earnings projections. The CEO credited the company’s outstanding performance to "The breadth of our franchise, the diversity of our businesses and the performance of our people enabled us to serve our clients around the world."

Meanwhile ex. Goldman Chief Henry Paulson wants to grease the skids for more IPO’s by international companies on American exchanges. The Treasury Chief hopes to relax some of the Sarbanes-Oxley regulations enacted after the Enron debacle. He said regulators must ease rules requiring public companies to test their internal controls. This means more profits for Goldman Sachs.

Funny just a week ago, a news story reported on record profits and bonuses for investment banking firms.

There has also been talk on Wall Street that 50 executives at Goldman Sachs might receive $25 million each as a bonus.

Recalling how incentive plans like stock options and bonuses distort behavior, consider another recent news report.

Jeffries & Co. settles with SEC over bribing Fidelity brokers with golf gifts and expensive trips in return for trades. The practice, which disregards investors' interest, is said to be widespread in the brokerage industry.

So how much hooch did Goldman have to dish out to garner that business? In the Jeffries case a sacrificial lamb took the fall a la Abu Ghraib. It leaves the big guys free for promotion to a Bush cabinet position

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