LA Connection Property Blog: Why is Goldman Sachs rushing to repay the bailout money it received?

Why is Goldman Sachs rushing to repay the bailout money it received?

This week the New York Times featured an article about Goldman Sachs rushing to repay the bailout money it received from TARP.

According to Llyod C Blankfein, CEO of Goldman Sachs, the firm may actually repay the funds within a month, far sooner than he originally indicated.

I'm curious as to why .... what is the real motivation?

There could be several reasons for repaying the money as soon as possible: It may be the 5% interest being charged on the borrowed funds, or it could be the perception that TARP recipients aren't financially sound. A further rationale could be that banks utilizing bailout funds don't want the government to influence how they do business (ie: they don't want limitations on compensation and bonuses or any other type of control and regulation).

A more sinister explanation may be to deflect scrutiny by Congress and Taxpayers about the true influence Goldman Sachs had in encouraging the AIG bailout.

I blogged about this while trying to "connect the dots" between Goldman Sachs and AIG. Remember that Henry PaulsonGeorge Bush's Treasury Secretary and one of the original architects of TARP - was the former CEO of Goldman Sachs.

Comment balloon 6 commentsCOMPASS PALM SPRINGS | Stewart Penn • March 24 2009 01:25PM


Good questions. I am interested. Keep me posted

Posted by Trevor Elliott (RE/MAX Integrity) over 11 years ago

I think that these problems go SO DEEP in Washington, we may NEVER get to the bottom of all of it.  Knowing who is in bed with whom can be a full time job these days.  Thanks for caring and sharing!

Posted by Emily Lowe, Nashville TN Realtor (The Lipman Group | Sotheby's International Realty) over 11 years ago

Stewart - frankly, I wish every bank that wants to should be allowed to payoff their debt as soon as possible. In fact, they shold be encouraged to pay off that debt. It will mean less government debt for my kids and grandkids.

And, I am all for banks, and any company, spending "their" money, not taxpayer money, in anyway that they want. After all, don't you chose how to spend your money (except for the large amount confiscated by government? We should not question the motives of any person or organization that wants to pay off it's debt.

Posted by Mike Saunders (Lanier Partners) over 11 years ago

That is really a good question. I will do some further reading and try to figure it out.

Posted by real estate real estate over 11 years ago

Stewart, I'm going with the last one.  I'd love to know why former Goldman Sachs CEO hank paulson was so quick to throw money at the financials.

Posted by Terry Haugen STAGE it RIGHT! 321-956-2495 (Stage it Right!) over 11 years ago

Stewart - I believe that they are paying the debt off so that they can retain their best and brightest employees. You know, the ones who got us into this mess in the first place.

Posted by John Guiney, e-PRO, CBR (Keller Williams Realty) over 11 years ago

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