Goldman's Buffett Repayment

http://www.futureofcapitalism.com/2010/11/goldman-buffett-repayment

The Federal Reserve is blocking Goldman Sachs from repaying $5 billion to Warren Buffett's Berkshire Hathaway, the Wall Street Journal reports. It's hard to see exactly who is being protected here. Goldman Sachs and Berkshire/Buffett are both large and sophisticated enough to decide what to do without a lot of wisdom from Washington. If the idea is to protect the taxpayers from having to bail out Goldman Sachs again, that's also strange, since we've been told over and over again by President Obama that the Dodd-Frank financial "reform" means there won't be any more bailouts. Is it Goldman Sachs shareholders being protected? Again, strange, since the management those shareholders employ seems to want to save money (a 10% annual dividend) by paying back the $5 billion now.

Anyway, it's illuminating. Anyone who thought the federal entanglement in the banking business ended when many of the banks, including Goldman, repaid their TARP money was mistaken.

by Ira Stoll  |  Nov 15, 2010 at 10:31 am Related Topics:  Banking, Federal Reserve, Goldman Sachs, Warren Buffett receive the latest by email: subscribe to the free futureofcapitalism.com mailing list