Its all Greek and goldman

Was researching on the recent crisis in Greece.Recently people in Greece have been protesting against the government for the hikes in taxes and reduction in spendings.pay cuts have been announced for the people working in the government sector and subsidies for the farmers have been reduced substantially.These austerity measures have made the farmers and the citizens of Greece to raise their voice against their government.

What has forced the government to adhere to such strict measures?

A recent report suggests that Greece's debt to GDP ratio is set to touch 120% and next years fiscal deficit is set to touch 13%.These figures should certainly scare all investors investing in Greece.The volumes in the bond market has fallen by more than 10% and the yield spreads have risen by more than 50 basis points last week,besides Euro has been under performing most of the currencies in the last couple of months.

Lets now look at the performance of the investment Bank.....oops sorry commercial Bank Goldman Sachs.Goldman has reported a profit of 4.78b USD.The gross income is as much as the income of the 5 big US banks combined.We haven't seen any significant improvement in the US economy, in spite of this Goldman has managed to post a 5b bottom line figure,a great achievement.But looking at the recent reports of Goldman's involvement in the Greek crisis I have my doubts on how Goldman has managed to post such a high profit figure.

Recently came across a article about the deal between Goldman and Greece.The article said that in the beginning of this decade prior to the Athens Olympics,Goldman helped Greece borrow billions,what was interesting was the method used by Goldman to fund Greece.Goldman provided cash upfront,but it was not reported as it was treated as a currency swap.Greece in return would have to forgo some of its future earnings.

Hmmm....now I wonder how much of this revenue has managed to find its way into Goldman's profits.In the past we have several countries seeking support from IMF, isn't it possible these countries would have approached Goldman prior to approaching IMF,isn't it possible that Goldman would have bailed out many such countries using such unethical practices.It may be unethical but unfortunately its not illegal,so we cant say for sure unless these countries voluntarily inform us about such transactions. Until then these government would continue to cheat its citizens and Goldman's profits should continue to move up.