After repaying in full a $10 billion federal bailout to the government this quarter, Goldman Sachs apparently jumped in a time machine. In a time of economic crisis and uncertainty, Goldman Sachs announced Tuesday a $3.44 billion profit in the second quarter. That marks most profitable quarter in the 140-year history of the financial services company. The revenue for the second-quarter was a staggering $13.8 billion with Goldman Sachs setting aside $6.7 billion for bonuses and compensation benefits. The average banker at Goldman Sachs could make at least $770,000 in bonuses and benefits at the end of the year.
Many people blame the excessive Wall Street paydays for getting our country into a financial mess in the first place. The lure of these massive paydays lead to great risks being taken by financial institutions that ultimately did not work out for them. Just 9-months ago Goldman Sachs was receiving a federal bailout, they paid off the bailout to their credit but they would not be receiving these bonuses today if it weren’t for our bailout money. Things seem to be getting back to normal on Wall Street at least for some people, how long is it till the rest of us has to clean up the mess they are bound to leave behind again?
The other side of the coin believes this news is a step in the right direction to solving the credit crisis and other economic failures in our country. Goldman Sachs coupled with a strong financial report from Intel spurred a 3% increase in the markets today. Hopefully, this will spur an economic rally and increase the time to recovery and more importantly give people confidence again in the markets.
The internet is certainly abuzz about the Goldman Sachs news. Zeta Buzz shows a dramatic increase in the blogosphere over the past few days. Buzz peaked on Tuesday as the news of the record quarter profit was released but a substantial amount of chatter has carried over as bloggers offer their two cents on what this means for everybody else.
The most important thing Zeta Buzz tells us is that people are mad. The graph below shows that 88% of posts regarding Goldman Sachs were negative. People are upset and they are going to the internet to vent their frustrations about what is soon to be another round of massive Wall Street payouts. Many bloggers are angry about the greed factor others at the aforementioned thought of their bailout money being the catalyst for the Goldman Sachs payday.
The long term effect remains to be seen. If Americans keep losing jobs and companies continue to struggle; public outrage will only increase over the exorbitant earnings. Goldman Sachs may find themselves all the way in the red- on Zeta Buzz of course.
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