Lloyd Blankfein, head of Goldman Sachs, the leading investment bank that led the markets to the brink in the GFC says he's sick of apologising for it.
Called to Washington on Wednesday to testify before the Financial Crisis Inquiry Commission, Mr Blankfein made it plain that he was done apologising.
The commission chairman, the former treasurer for California, Phil Angelides, pointed out that some regarded Goldman's behaviour - in which the firm sold mortgage securities to customers and then placed bets against those same - was ''the most cynical'' of practices.
''It sounds to me a little bit like selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars,'' said the chairman.
''That's what a market is,'' Mr Blankfein said.
''I do know what a market is,'' Mr Angelides replied sourly. He tried again to get Mr Blankfein to acknowledge that ''excessive risk was being taken''.
''Look, how would you look at the risk of a hurricane?'' the man from Goldman retorted.
''Acts of God we'll exempt,'' Mr Angelides said. ''These were acts of men and women.''
What do you do with people like this? I'm surprised there isn't vigilante group out to find where he lives and fire bomb his property.Not that I'm advocating it, but you wouldn't be surprised if it happened.
CBA's Profit Upgrade
Get this. The CBA has made a huge pile of money in a year of the GFC.They've upped their profit forecast by a dirty big margin, sending their shares up 2.31% in the last 15minutes of the trading day.
Key drivers of the result were the solid income growth across the business, good volume growth, disciplined cost management and a decline in impairment expenses, the bank said.
Also helping the result was a positive return of $240 million after tax as equity markets recovered over the six month period.
The profit forecast shows that CBA has rebounded from the slowdown associated with the global financial crisis, and is driving earnings higher with its biggest market share in home loan lending and deposits.
EL&C Baillieu analyst Stewart Oldfield said CBA is just getting stronger.
‘‘They have got the premier retail franchise in the country and it’s a case of the strong getting stronger,’’ Mr Oldfield said. ‘‘In an environment post the GFC the strongest have just gotten stronger.’’
I guess it's a company that won't be allowed to fold, so you would buy their shares. Lots of institutional buyers in that one, judging from the volume. It's about recaptured its peak from just before the GFC.
So seriously, what exactly the hell was the GFC to Australia? Iceland's been completely shafted by the GFC and here's Australia sailing smoothly as if nothing had ever happened. Take this column on unemployment.
Yesterday’s confirmation of labour market strength makes a return to neutral monetary policy a given. It used to be thought that a neutral cash rate was about 5 per cent, but the banks boosting lending rates by more than the RBA’s official increases has lowered that a touch. And with higher personal debt loads, it’s arguable that the RBA doesn’t have to do as much to achieve its desired impact on purses and wallets.
So, pick another number. Maybe neutral now is more like 4.5 per cent, just three more consecutive monthly rate rises of 25 points and we’d be there.
And, as the RBA has reminded us, just because it hasn’t done something before, it doesn’t mean it won’t do it.
Also remember that the unemployment rate is supposed to be a lagging indicator, in which case the extraordinary straight-line employment growth since June is all the more amazing, even while being the sort of performance that naturally has any graph watcher thinking that there must be some sort of pause at some stage.
In other words, if you're an employer, the labor market is tight, inflation is knocking on the door, the economy is right back to the point where it is about to overheat, as it was in July 2007. It's worth asking, what exactly the hell was the GFC and all that drama? Because as of today, it's looking like it never happened for the big banks.
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