Goldman Makes The Gold

Yesterday I talked about Double G's timeline on the events that led to Goldman Sachs being able to post an expected $2 billion profit for 2Q 2009.

Today, Goldman Sachs announced they didn't make $2 billion in profits last quarter.

They made $3.44 billion.

Comfortably beating analysts’ forecasts, Goldman Sachs earned second-quarter net profits of $3.44 billion, or $4.93 a share, the bank announced on Tuesday.

The results continue a robust turnaround for the firm since it rode out the final tumultuous months of last year with the aid of a federal rescue. They come just one month after it paid back its $10 billion in federal aid.

Goldman’s profit was lifted by record quarterly revenue of $6.8 billion in its fixed income, currency and commodities unit, where mortgage and other credit instruments are traded, the bank said in a statement. This business has performed well since the bank has taken on greater levels of risk since the end of last year.

Its equity underwriting business also generated record net revenue, worth $736 million in the second quarter, it said, as Goldman benefited among other things from a rush by other troubled banks to issue shares and raise their capital levels.

“We are performing well across the board,” said David A. Viniar, chief financial officer, who said the strong performance reflected “blocking and tackling every day” by Goldman’s employees.

It paid back $10 billion, made $3.5 billion, and did it with a smile, less than a couple months after having to borrow, well, $10 billion.

No company does that. None. Go back and read that timeline from Greenwald again. We've been had, and Timmy is beginning to look like a rat.

Congress is getting tired of asking nicely. Twenty House and Senate Democrats sent a letter to Treasury Secretary Timothy Geithner in May asking if he intended to implement the recommendations of bailout auditors. They never heard back.

If there's one thing that gets under the congressional skin, it's being ignored. So they're responding with an attempt to make it a legal requirement for Geithner to either accept the reform and oversight recommendations or explain to Congress why he won't.

The move represents an escalation in the tussle over the bailout between the White House and Democrats in Congress, and it's likely to pass.

Later this week, the full House will vote on whether to give Geithner a deadline written into the law to respond to its request. The mandate passed the Appropriations Committee last week. The first legally required report would be due Sept. 1, 2009, with quarterly reports to follow.

Geithner is required to respond to auditors' recommendations under current law, but there is no deadline to do so. Geithner neither replied to the May letter, nor has he responded to the recommendations of the Government Accountability Office (GAO) or the Special Inspector General for the Temporary Asset Relief Program (SIGTARP).

And while asking where the money went is nice, it's going to come far too late for millions of American jobs, or increasingly, too late to save Obama's domestic agenda.