Belfast Telegraph

Reversal of fortunes for Goldman Sachs bosses

Volatile. That's probably the best description for not just the Northern Ireland economy but also the world economy.

Take the US (obviously not literally because you'd only be inheriting a pile of bad debt, and everybody knows that doesn't reflect well on your credit rating). A day after S-amp;P fired a warning shot across the brow of the Statue of Liberty, one of its investment banks rolled up with so much profit for the first three months of the year that it was able to set aside the equivalent of the annual gross domestic product of Moldova to pay bonuses.

Goldman Sachs made a whopping $2.74bn in net profits in the first quarter of the year, after setting aside - get this - $5.23bn to pay its staff (Moldova's GDP was $5.357bn in 2010, according to the CIA's website, and they should know).

While you might think the boys and girls of Goldman would be jumping for joy at such news, profits were actually down 21% on the same time last year. The reason? It had to pay $5bn to buy back shares from that wily old investor Warren Buffett's investment company Berkshire Hathaway.

Buffett bought shares in the banking behemoth at the peak, or the bottom (depending on how you read it) of the financial crisis in 2008 which is thought to have netted the Sage of Omaha over $8bn. That's enough to keep him in cans of his favourite diet cola for some years.

But while Goldman, and Buffett, might have to spend more time trying to avoid tax in the next few months than scrap around for new business, it looks like the rest of the world's largest economy isn't in such a rosy state.

Standard -amp; Poor's cut its outlook for sovereign debt in the US to negative from stable yesterday due to risks from the country's growing deficit.

Talk about taking the wind out of the sails.

Signs of cracks appearing in the economy after such a solid period of recovery sent stock markets plummeting around the world.

Of course, much of that's been reversed following the golden Goldman results but it does go to prove one thing: even the world's largest economy is going to find the road to recovery full of hidden obstacles.

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