Geithner missing the Goldman Sachs fun

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This week, when one of the banks he recently saved is expected to announce a jaw-dropping $2 billion profit for the second quarter, he'll be thousands of kilometres away...

And while a bonanza profit announcement by Goldman Sachs might reinforce Geithner's point that the US is emerging from the financial crisis, one could forgive these foreign dignitaries for marvelling at the schizoid nature of the American economy, and the man who is officially in charge of it.

In one corner you have a bank which, months after taking taxpayer funds to keep itself from going under, is back making more money than it ever did before. This is despite Goldman converting from an investment bank to a more regulated bank holding company so it could become eligible for the government's emergency lending program.

But Goldman's glory is almost another country away from Sacramento, where the debt-ridden California state government, besieged by a $26 billion budget shortfall, has inadvertently given birth to a whole new trading market -- that of the California IOU.

The IOUs...are a stopgap for the world's eighth-largest economy, which has been hit hard by the property bust and financial crisis.

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Unable to find a political solution to the budget crisis, the state government is now using the IOUs to pay businesses, college students and taxpayers. Enterprising West Coast capitalists have taken to trading the IOUs on eBay, Craigslist and ByMyIOU.com.

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While data shows the Midwest is starting to rebound, most economists are convinced that any recovery will be a jobless one.

Luckily for Geithner, European and Middle Eastern leaders -- especially those in charge of wealthy sovereign funds -- are likely to be so overwhelmed by the shocking news of Goldman's good fortune that Midwestern business indices and quirky Californian payment systems will hardly rate a mention.

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http://www.news.com.au/heraldsun/story/0,21985,25776999-664,00.html

No jobs for you America. Does Goldman have any openings?