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One bank is back to printing money. Another is trying to get out of paying the taxpayers back. And another is suing itself. Just another Monday morning at the Scratch Pad.
The vampire squid, er, Goldman Sachs reports its earnings tomorrow, and the New York Times says the profits are once again flowing at GS:
“They exist, and others don’t, and taxpayers made it possible,” said one industry consultant, who, like many people interviewed for this article, declined to be named for fear of jeopardizing business relationships.
Startling, too, is how much of its revenue Goldman is expected to share with its employees. Analysts estimate that the bank will set aside enough money to pay a total of $18 billion in compensation and benefits this year to its 28,000 employees, or more than $600,000 an employee. Top producers stand to earn millions…
“They are a trading firm,” said an executive at rival firm, barely able to hide his jealousy. “It’s what they do.”
Not surprisingly, then, analyst Meredith Whitney is telling people they should buy stock in GS:
Meredith Whitney gave Goldman Sachs Group Inc. her only “buy” recommendation among the eight banks she covers, saying the shares may climb 30 percent.
Whitney, the founder of Meredith Whitney Advisory Group LLC, hasn’t recommended buying shares of New York-based Goldman Sachs since January 2008, when she was an analyst at Oppenheimer & Co. The stock may reach $186 from $141.87 on July 10, the 39- year-old analyst said in a note to clients today. It climbed 4 percent before the official start of trading.
Elsewhere, Wells Fargo is suing itself:
In this particular case, Wells Fargo holds the first and second mortgages on a condominium…
As holder of the first, Wells Fargo is suing all other lien holders, including the holder of the second, which is itself.
“The primary reason is to clear title and ownership interest in a property to prepare it for sale,” Waetke said in an email exchange. “So it really is not Wells Fargo vs. Wells Fargo.”
Yet court documents clearly label “Wells Fargo Bank NA” as the plaintiff and “Wells Fargo Bank NA” as a defendant…
McKillop, the condo owner’s attorney, told me he thinks Wells Fargo doesn’t know what it’s doing, and that its lawyers figure it is all billable hours to them.
“You can’t sue yourself,” McKillop said. “It’s just so ridiculous. .. It’s a waste of paper. It’s a bastardization of the legal process.”
Bloomberg reports that Bank of America is trying wiggle out of paying $4 billion in fees back to the taxpayers:
Bank of America, ranked first by assets and deposits in the U.S., “got a moral commitment for insurance without tendering a check, so it appears they got something for nothing,” said Representative Brad Sherman, a California Democrat on the House Financial Services Committee. “If the government takes the risk, the government needs to be paid.”
Both sides are under pressure from lawmakers who questioned whether taxpayers are being adequately rewarded for propping up lenders, and why Bank of America’s January acquisition of New York-based Merrill Lynch required a publicly funded bailout.
NPR looks at a new technology that might allay fears about government snooping:
Privacy advocates also worry about a more basic problem: the misuse of all this personal information. Two months ago in Massachusetts, law enforcement officials were found to be snooping into the lives of local celebrities. They poked around New England Patriots quarterback Tom Brady’s personal information just because they were curious. So they looked up his address and whether he was a gun owner; they did this 968 times.
McGrew claims that what happened to Brady wouldn’t have happened if law enforcement had been using Palantir’s system because of its privacy control. “When some of these officials were looking at Tom Brady’s data, they would be leaving a trail. It is all captured in a log that you don’t need to be a technical guy to understand,” he says. “A compliance officer or a civil liberties group would be able to see exactly who was looking at what information.”