A small sign of stabilizaion on Wall street

Goldman Sachs is the first of the big banks that are attempting to pay back federal money allocated by the Troubled Asset Relief Program (TARP). Goldman announced profits of $1.66 billion or $3.39 a share for the first quarter. They also announced record revenues $6.56 billion largely due to the lack of competition from Bear Stearns and Lehman Brothers. This would be a breakthrough for the financial system as it is showing positive signs that one of the big banks are finally on a road to recovery and are attempting to pay back federal money.

Funny enough, Goldman is being scrutinized for their desire to pay back federal loans and some even say that this might not be good for the financial system as a whole. So much so, that Goldman needs to wait for approval from the treasury to be able to pay back the funds and they are subject to a stress test from federal examiners that determines their eligibility to pay back the funds. I feel that if the company managers feel comfortable enough to pay of debt, they should do that. This seems to me like the responsible decision to do with incoming revenues unlike AIG that used money to pay bonuses. This situation could be compared to you and I, that might want to pay off our home mortgages sooner by paying higher monthly payments, but the bank tells us that we cannot do it. As for the financial system as a whole, if Goldman decides to pay off their debt, they will surely be able to allocate more funds to other aspects such as bonuses and high stock dividends. This in turn will make Goldman the bank to work for on Wall street and this might also motivate other big banks to follow in Goldman's footsteps for financial success.

Goldman should also not be scrutinized for wanting to be independent of government funds. They have very legitimate reasons for doing so. By paying off these government loans, they receive independence from the government's rules and regulations that stipulate what Goldman should spend their loan money on.

Goldman should definitely be allowed to repay their TARP money. This could only be good for the economy. This kind of news could set an example for other banks to follow, put some confidence into employees minds to keep up a good and honest work ethic and lastly could establish some confidence in the capital market and make people invest again by buying new shares.

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