From former Treasury Secretary Paul O’Neill, on banks that are rushing to return TARP money so they can escape limits on executive compensation:
“If banks now claim they want to return the money because they don’t need it, why do they have to raise new capital to replace the money from we the people in order to repay the government?”
Right. If Goldman Sachs never really needed their TARP money in the first place, they could have returned it without first doing a risky and ultimately disappointing share offering. 
One can only conclude that, yes, they needed the money back in October, no matter what they say now.
In related news, Felix Salmon takes note of the fact that due to a legal fluke Goldman’s FY2008 ended in November but their FY2009 started in January. In December they reported huge losses, but those losses are now in sort of a weird limbo:
I suspect that when it comes to bonus time at Goldman, December 2008 will never matter. The 2008 bonuses will be paid based on the 2008 fiscal year, while the 2009 bonuses will be paid based on the 2009 fiscal year. And those $1.3 billion of losses in December — losses which will never show up in any annual report — will be conveniently ignored by the compensation honchos.
Clever! And it shows that Bill Gates was right. As William Cohan reminded us yesterday, he once said that Microsoft’s biggest competitor was Goldman Sachs. “It’s all about I.Q.,” he said. “You win with I.Q. Our only competition for I.Q. is the top investment banks.” And this is exactly the kind of thing that Wall Street has spent the last decade applying its galactic brainpower toward. Too bad they aren’t researching a cure for cancer instead, isn’t it?
