The last week Goldman Sachs reported a better-than-forecasted second quarter earnings and now able to repay the bailout money. Something that should make every U. S. tax payer feels better about the current economy. But wait, even Goldman Sachs admits that much of their success is due to less competition in the marketplace.
Goldman Sachs CFO, David Viniar, called it a “fragmented competitive environment” and went on to say that fragmentation came from the failure of its two main competitors; Bear Stearns and Lehman Brothers, while the others were either bought out, failing or in some sort of reformation process, with government help.
It is important to point out that at the time Goldman Sachs received its bailout money the former Treasury Secretary who issued the bailout also happened to be the former Goldman Sachs CEO. Is that why Bear Stearns and Lehman Brothers received no government bailout money, they had no big government connections?
What is the point of all of this? Well, before everyone gets excited with the possibility of an economic upswing based on the performance of the bailout gang, remember, a major part of their success is driven by less competition. A situation controlled by federal government involvement.
Look Out Ford,
Bill
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