From Fazle Rashid

NEW YORK, Oct 13: Compensation continues to generate controversy and anger and in many respects much of it is understandable, the Chief Executive Officer (CEO) of the Goldman Sachs admitted. Many small and middle size American businesses are still struggling to secure bank loans impending their expansion plans and contracting overall economic growth of the country.

This is the widely contrasting picture of the US economy, the biggest economy of the world, on whom rests the state of the global economy. By most analysts estimates the annual bonus pool in Goldman Sachs will swell to more than $23 billion, the New York Times (NYT) in a report said. Most banks, on the other hand, expect their lending standards to remain tighter than the levels of their pre-crisis level. Credit squeeze will linger till the end of 2010, same paper said.

The enduring credit squeeze appears to reflect an aversion to risk among lenders ( banks ) confronting great uncertainty about the economy rather than any lingering effects of the panic that gripped financial markets, said NYT . The banks are afraid. They fear about the extent of losses on credit business and high rate of unemployment.

The bonuses paid to Merrill Lynch staff before its ill-fated merger with Bank of America (BoA) continue to plague the

financial institution. The board of BoA has ordered the bank management to reveal the legal advice the bank received before the merger.

Though most banks have started to recoup their losses, the earnings are still expected to be down by about 30 per cent from the corresponding period of the previous year. JP Morgan Chase and Goldman Sachs are expected to report "another strong quarter". BoA and Citigoup, both recipients of taxpayers money to the level of $45 billion will make some profit but not enough to off-set their huge losses in credit card and consumer lending businesses.

Several thousand wealthy Americans will come forward to meet the October 15 deadline to reveal how much money they have hidden in off-shore banking particularly in Swiss banks. There is no genuine account of how much hidden money is outside America. The US tax dodgers have two options; to come clean by making a clean breast of themselves by paying penalties or gamble "that will not get caught".