After Standard & Poor’s downgraded Greek government debt to “junk” status today, stock markets swooned worldwide on fears that Greece’s problems could infect the rest of the European economy and, in the worst case scenario, drag the world economy back into recession.
Meanwhile, on the other side of the Atlantic, executives from investment banking behemoth Goldman Sachs spent the day being grilled by a congressional panel about whether the bank bet against its clients on sub-prime mortgages. Goldman is also implicated in the Greek debt crisis: it helped the Greek government hide its overspending with a complex derivativesdeal in exchange for future lottery receipts. (We couldn’t make this up if we tried.)
So as Goldman Sachs is caught gambling with the planet’s economy, reaping billions for its executives and its clients (if the bank’s not screwing them behind their backs), it may be worth considering a solution to Greece’s — and by extension, all of our — debt problem that could at the same time restore Goldman’s reputation: let Goldman Sachs bail out Greece.
By the way, if you’re curious how much that would cost, we have a solid estimate from a knowledgeable source: $130 billion. The source? Guess.
That’s a lot even for a vampire squid. Goldman made $4.8 billion last year and handed out another $16 billion in salaries and bonuses. Greece has a $11 billion debt payment coming up, maybe the bank could just spring for that instead.
Of course, this is Goldman Sachs we’re talking about — there’s no reason to think it couldn’t pay for all of Greece’s debt and still make money off the deal, somehow.