知足常樂
在蕭條中學習財經
In 2008, to survive through the crisis they created, a couple of other-type banks have become bank holding companies to qualify for the government 's $700 billion rescue funds. Here is the short list:
- Goldman Sachs
- Morgan Stanley,
- GMAC
Undoubtly, a Wall St. era ends with the Big 5 investment banks gone overnight. GS and MS have to lower their head, shift to bank holding company so that they could get help from the federal government. They have collected enough money using high-leverage capital in the past. Now when they have to burden the risk ignored by their greed. They are scared and start to steal taxpayers to avoid bankruptcy. As they said, America can't burden the collapse of more investment banks after their competitors BSC, LEH and MER disppeared before the $700 billion was approved by the congress. Yes, Mr Henry Paulson, who was the United States Treasury Secretary and previously served as the Chairman and CEO of Goldman Sachs, helped to decide such a historic transition. He set up the bad example for later troubled and private commercal banks --- How to survive with taxpayer's money they originally have no right to access: First change to bank holding company, then get money from the treasury. They just manipulate and take advantage of US law!!! But here is one question for Mr Paulson, who had promised the treasury won't use taxpayer's money any more to save commercal banks through his address on television before the collapse of Lehman Brothers. Only one week later, he has to spend huge money on AIG, which is the largest trade partner of his previous employer. The reason for his action is: AIG is too big to fail! Is this reasonable? If so, I have nothing to say. Every private company has its own life cycle, and they should be able to deal with this. Think about all those odds if you still have brain. Now it is the turn of auto financial GMAC, which has to shift or declare bankruptcy. If GMAC is gone, GM's situation will worsen. BUT the question here is: will this shift save the troubled GM or improve its situation? I doubted it.
