It's Happening!!

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By no means do we claim to have clairvoyant powers here at the Balcony, but simple logic application can make us look as if we do sometimes...

Just hours after posting our Bonus Consolidation concept, this just came in from today's NYTimes! If we understand the situation correctly, the absence of bonuses (along wih some questionable investment decisions) has led many GS employees to serious liquidity shortages, and the Bank is now offering them loans that will allow them to maintain their previous lifestyles (we shall refrain from making any judgements). To my mind these loans clearly fall under the subprime category, and we all know what happens eventually to the subprime lenders: Bailouts!!! So if the government is willing to subsidize loan related losses but not bonus payments, it should not have taken more than 5 minutes to the guys at the Goldman structuring desk to spot the arbitrage and come up with the appropriate structure...
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