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ABN: Goldman Sachs May Sell Off US Banking Business as Obama Continues War on Wall Street


January 26th, 2010
(NYSE:GS)
Filed Under: Opinion
Tags: Goldman Sachs
American Banking News

Rumor has it that Goldman Sachs (NYSE:GS) may be thinking of taking steps to sell or spin off it banking business in the United States as Obama continues to cater to populist feelings and ravage the banking industry, as little else he has attempted to do has brought favor from the public.

The banking division has deposits worth about $36 billion at this time, which Goldman would be hesitant to get rid of, but would in order to get Obama off their backs if that’s what it comes down to.

This of course would be spun as a win for Obama either way, as it would make it look like he was battling for the little guy against the big bad bankers, but there is risk in the move as well, as the economy is seemingly recovering a little bit, people will move their focus and interests to other matters, leaving it largely a mute point at that time. More than likely this is why Obama and his administration is attempting to move things quickly again (as they always do), in order to take advantage of this short window of opportunity.

Some people who feel things are improving economically are already putting their attention on other things, and if they believe things are better for them, they really aren’t going to care about what bankers make and if companies like Goldman Sachs are a multifaceted financial institution.

There is no doubt much of this is an attempt to get people to think of big banking again in this news cycle, as Obama and the Democrats have been taking a beating, and they’re in a panic as they face elections that may reach historical proportions from the dissatisfaction and resistance normal and average Americans have toward the controversial Obama and his policies.

When announcing his latest regulatory ideas, Obama continues to show how clueless he is and how he misunderstands the underlying problems. For example, he reiterates the idea that banks should never be allowed to become “too big to fail.” Obama doesn’t get that they never were too big to fail, and that the government should never have stepped in in the first place and force them to take taxpayer money through the TARP fund.

The idea of whether the banks were too big to fail or not will never be proven, and can’t be proven because the government interfered with the markets and took out the one effective mechanism that is the deciding factor on whether a business will fail or not: the markets themselves.

To make up stories afterwards that they saved the system is disingenuous and outright dishonest. Even Warren Buffett has finally admitted that many, if not most of the banks, never needed the TARP funds to survive.

Right now there will be a lot of companies positioning themselves and making comments like Goldman Sachs, and others that would be affected by the latest regulations (if they’re ever implemented), and so everyone is throwing out trial balloons to see what the response to them will be.

When taking into account the government creating regulations to cut back on banking fees in a number of retail banking areas, along with pushing to eliminate much of the risk associated with investment banking and other areas, it remains to be seen what will be left over when the smoke clears for the banks to hold on to as a reason for existing.

Like I mentioned, much of this is an attempt by Obama and the Democrats to get the focus of their numerous failures and rejection of policies, which have been a disaster for them.

Even so, there is a real possibility some of this will go through, and if that happens, American banking will take on a completely different look. There are a lot of details to be worked out if this were ever to be brought into law, and there are so many regulations being put forth by Obama that it’ll take some time before we really see what emerges from all of this, if anything.

One thing is for sure, the global markets and banking industry haven’t liked where they see Obama going with this, and increasing pressure to crush it before it gets any legs seems to be mounting. The problem for Obama and the Democrats is this: if they can’t even win this issue in this economic climate, they have been largely dismissed by the American public who is already thinking of removing them from office in a major way later in the year.



http://www.americanbankingnews.com/2010/01/26/goldman-sachs-nysegs-may-sell-off-us-banking-business-as-obama-continues-war-on-wall-street/