Goldman Sachs Posts $3.44 Billion Profit

Goldman Sachs this morning announced huge profits during its second-quarter: a whopping $3.44 billion, vastly surpassing analyst predictions of a $2 billion profit.

The stock market was poised for a sharply higher open today, thanks to the surprisingly higher profits from Goldman. The firm's stock was trading around 150 points today, up more than triple from a low of 52 points a share in November.

In this troubled economy, just how did Goldman do it?

VIDEO: Bloomberg TVs Deirdre Bolton on the banks second-quarter earnings report.
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"They've taken bets. They put their money behind those bets, and they've made a tremendous amount of profit," said Seamus McMahon, president of McMahon Advisory LLC.

CEO Lloyd Blankfein pointed to "improving financial market conditions and a deep and diverse client franchise" as a reason for the massive profits.

Investors are interested to see if massive bailouts helped banks get their finances back in order. Goldman Sachs was the first major U.S. bank to report its earnings, and will be followed by JPMorgan Chase, Bank of America and Citigroup later this week.

VIDEO: Goldman Sachs second-quarter earnings are expected to be around $2 billion.
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Aside from banks, Intel, the world's largest chipmaker, will also report its earnings today, followed by American Airlines Wednesday and Google Thursday.

The Treasury spent more than $200 billion to bail out financial institutions, $10 billion of which went to Goldman Sachs. The Wall Street firm has since paid it back.

"Have we offered them very cheap financing backed by the government, which has allowed them to take great risk? Absolutely," Alexis Glick of the Fox Business Network said on "Good Morning America," today. "At the end of the day, though, if they are able to turn the page, which they're starting to do, it means higher taxes. And for right now, if you look at what's happening to states, to municipalities, to the federal government, that is what we need."

"I know it's one of those oxymorons," she continued. "You feel like you should be really angry about the outrage here. But on the other hand, we need the money. We need them to turn, because we're inextricably linked."

After receiving $10 billion from the Treasury in October and paying it back with interest only eight months later, Goldman Sachs reaffirmed its position as one of the nation's strongest and most profitable banks after turning in better-than-expected earnings. Yet even as the bank reaps the benefits of being one the less bruised banks in the financial system, it remains to be seen whether it can sustain these levels of revenues and profits.

Taxpayers may still question whether these profits are a direct result of their tax dollars.

"Why are they allowed to make this kind of money, and when are we, the taxpayer, going to see our money back?" said McMahon.

"The American taxpayer did actually help fuel this trading profit -- the money stabilized the firm at a time when it needed to be stabilized. But they should take heart, on the other hand, because someone is actually making money in this environment despite the risk -- and that is good for the economy," said Charlie Geisst, author of "Collateral Damaged."

Congress Reacts

Asked today about the profits at Goldman, neither Republicans nor Democrats seemed particularly mad about the firm's record profits earned even as the unemployment rate and the federal deficit swell.

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