By MICHAEL GRAY
Is the Goldman brand tarnished?
Has Wall Street’s white-shoe firm with strong ties to the federal government gone over the top with its record quarterly earnings? It seems the answer is yes to a certain extent.
This week a number of senators including Sen. Maria Cantwell, Democrat from Washington, who sits on the Energy Committee, said that her panel is considering not allowing Lloyd Blankfein’s firm to be a player in the carbon-trading arena.
Sen. Cantwell went on to say that she did not want to see the carbon-trading floor become the new oil pit, where market makers such as Goldman can create derivatives and other arbitrage trading opportunities that would hamper cap and trade.
This is important from the standpoint that Goldman saw this as a very lucrative market to be in and have set up a number of firms to trade in the pit. Even Al Gore decided to partner with former Treasury Secretary and Goldman CEO Hank Paulson to mine some gold while “saving the planet.”
My personal belief is that greenhouse gases are not the primary cause of climate change, and that carbon trading was the creation of Wall St. to generate huge green profits.
This bears watching to see if Goldman and other Wall St firms are excluded from the trade.
BUFFETT’S SWINE FLU PLAY
Berkshire Hathaway, Warren Buffett’s holding company released its quarterly filing and in it he said he took large stake in a smallish medical supply company called Becton Dickinson, based in New Jersey.
Becton Dickinson supplies syringes and needles, which may be in short supply this fall with the expected tens of million swine flu shots be given.
Buffett also bought additional shares of J&J and sold stakes in energy companies. Not much travel if everyone is in quarantine is Warren’s new investment strategy.
COLONIAL BANK FAILURE
Colonial Bank of Montgomery, Ala. was seized by the FDIC last night in the latest detonation within the American banking system.
Colonial is the sixth-largest bank historically to be taken over the feds. With over $25B in assets, Colonial will be assumed by TARP-aided BB&T. Colonial was crippled by a bad real estate portfolio, which was centered in the southeast, especially Florida.
Colonial’s failure marks the 77th bank to close this year, including 32 since July 1.
As I’ve written prior, the number of failures are growing as we move toward the fall, with the size of the failures growing to top-tier banking institutions. These FDIC interventions will continue until the Chairman Bair gets to Citigroup, which will mark the beginning of the bank holiday, this autumn.
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