Geithner Aides Reaped Millions Working for Banks, Hedge Funds
By Robert Schmidt
Oct. 14 (Bloomberg) -- Some of Treasury Secretary Timothy Geithner’s closest aides, none of whom faced Senate confirmation, earned millions of dollars a year working for Goldman Sachs Group Inc., Citigroup Inc. and other Wall Street firms, according to financial disclosure forms.
The advisers include Gene Sperling, who last year took in $887,727 from Goldman Sachs and $158,000 for speeches mostly to financial companies, including the firm run by accused Ponzi scheme mastermind R. Allen Stanford. Another top aide, Lee Sachs, reported more than $3 million in salary and partnership income from Mariner Investment Group, a New York hedge fund.
As part of Geithner’s kitchen cabinet, Sperling and Sachs wield influence behind the scenes at the Treasury Department, where they help oversee the $700 billion banking rescue and craft executive pay rules and the revamp of financial regulations. Yet they haven’t faced the public scrutiny given to Senate-confirmed appointees, nor are they compelled to testify in Congress to defend or explain the Treasury’s policies.
“These people are incredibly smart, they’re incredibly talented and they bring knowledge,” said Bill Brown, a visiting professor at Duke University School of Law and former managing director at Morgan Stanley. “The risk is they will further exacerbate the problem of our regulators identifying with Wall Street.”
While it isn’t unusual for Treasury officials to come from the financial industry, President Barack Obama has been critical of Wall Street, blaming its high-risk, high-pay culture for helping cause the financial-market meltdown.
Speaking to financial executives last month, Obama said: “We will not go back to the days of reckless behavior and unchecked excess that was at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses.”
At the same time, the president has promised to change Washington by keeping lobbyists for special interests at a distance and by making decisions in the open.
Sperling and Sachs are each paid $162,900 at the Treasury. Along with four others, they hold the title of counselor to Geithner. Sachs, 46, withdrew earlier this year from consideration to be the Treasury’s top domestic finance official, a job that would have required Senate confirmation.Geithner’s predecessor, Henry Paulson, brought on a coterie of non-confirmed advisers from Goldman Sachs at the end of his term. Paulson, who had been the firm’s chief executive officer, defended the arrangement as necessary to quickly bring in top talent when the financial system was on the verge of collapse.
Thats a bad joke what Paulson made is to place the Goldman spies into the system in order to keep up the informatin flow. This kind of facts just prove who Obama works for at the end and that whole DC is run by this insider ring who even do not dare to hide the operations.
2. The other big operator besides Goldman running the show JP Morgan has reported earnings beating the expectations but those 2 will be rather the exceptional cases. As most of the others do not operate within the gang. Goldman and JPM are the 2 big players in the squeeze up the markets as it is easy to lure the others in. The not amazing fact is how useless for the public those so called analysts are who may have deliberately underestimated the earnings but nevertheless completely useless for people who try to rely on such inputs.
JPMorgan Crushes Profit Expectations
JPMorgan ’s profit beat expectations in the third quarter, with investment banking operations posting strong gains, the company said Wednesday.
But the company warned that credit costs remained high.
The bank earned 82 cents a share in the third quarter, up from 9 cents a share in the same quarter a year ago. That was much higher than the 52 cents a share analysts surveyed by Thomson predicted.
JP Morgan shares rose more than 3 percent in pre-market trading.
Tier 1 common capital at JPMorgan [JPM 45.66 -0.42 (-0.91%) ] was also strengthened through capital generation during the quarter, up 8.2 percent to $101 billion, the bank said in a statement.
"While we are seeing some initial signs of consumer credit stability, we are not yet certain that this trend will continue," Chairman and CEO Jamie Dimon said in the statement.
"Despite this near-term uncertainty about the path of the economy, our strong capital position and underlying earnings power will enable us to continue to invest in our businesses, creating a lasting franchise for many years to come," he said.
The results may prompt analysts to raise their estimates for the company's profit, Ed Najarian, director of bank stock research at ISI Group told "Squawk Box."
"It just looks like a lot of strength pretty much across the board, with a lot of the upside coming from the capital markets business, as expected," Najarian said.
3. The other truth about the Obama admin is that after the taxpayer has bailed out the complete financial industry they still dare to pay out 20 % more bonus this year. That is outrageous considering that trillions have been pumped into the financial system with a risk free carry trade on top created by the FED and bankers claim to be making profits. Every monkey can create such profits and is completely undeserved and against everything Obama said in his PR speeches when he never even thought of making reality as he blaimed the greedy bankers.
Major U.S. banks and securities firms are on track to pay employees about $140 billion in total compensation and benefits this year, the Wall Street Journal said, citing an analysis of securities filings for the first half of 2009 and revenue estimates through the end of the year.
The paper said employees at 23 top U.S. investment banks, hedge funds, asset managers and stock and commodities exchanges were likely to earn about 20 percent more than they did last year.
The firms paid $117 billion in compensation and benefits last year, down from the $130 billion paid in 2007, the paper said.
Massive losses inflicted by risky subprime mortgage bets destroyed some of the oldest names in U.S. finance and intensified a recession that has cost millions of jobs, putting both the banks and the regulators under scrutiny.