On the heels of Goldman CEO Lloyd Blankenfein's apology for his firm's role in the financial crisis, some of Goldman's largest shareholders are unhappy more of Goldman's prosperity isn't being passed along to them, The WSJ reports.

Despite record net income and compensation, analysts forecast Goldman's 2009 earnings per share will be 22% lower than in 2007, and roughly equal to its 2006 earnings, according to Thomson Financial. The drop in EPS is caused by the more than 100 million shares issued in the past year to bolster Goldman's financial position and capital.

While the article doesn't name the "miffed" shareholders, Goldman's five-largest shareholders as of Sept. 30 are mutual funds:

1. AllianceBernstein
2. Barclays PLC unit
3. State Street unit
4. Vanguard Group
5. Wellington Management

As Aaron and Henry discuss in the video, the standard payout ratio of 50% of profits Wall Street has long enjoyed does not make sense in this economy. Wall Streeters could stomach a lot less, especially when most individual Americans are pocketing a 0% payout.

Of course this mounting criticism comes amid Matt Taibbi's "Vampire Squid" takedown of Goldman this summer...

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Are we on the verge of total economic collapse?

Don't laugh. The french firm Societe Generale thinks so.

The brokerage firm has put the fear of God in clients recently by predicting that developed economies and markets are going to collapse under a monster debt load and that gold is going to soar to $6,000 an ounce.

Fortunately, not everyone feels that way.

Many on Wall Street, in fact, have suddenly gotten quite bullish after missing a lot of the extraordinary 65% rally we've had since the lows of March. Hopefully, these folks--the "V-shaped recovery" crowd--are right, and the bad news of the last couple of years will soon be a distant memory.

Aaron and I are skeptical, though. The aftermath of debt-fueled financial crises like the one we went through usually lasts for many years, if not decades. Japan has been struggling to right its ship since its own bubble burst in 1990, and the country still isn't growing strongly again. (Japan's stock market, meanwhile, trades at a fifth of its 1989 high).

A fight has broken out among economists about whether what ails the country is too much spending or too much debt.

Debt fear-mongers, such as Niall Ferguson, believe that the country's wild borrowing and spending spree has put us on the road to ruin.

"Stimulists," such as Paul Krugman and our guest, professor James K. Galbraith of the Univ. of Texas, believe that spending aggressively and piling up debt is by far the lesser of two evils and that we need to launch a second stimulus immediately. 

Why do professors Krugman and Galbraith believe this? 

Because, in their opinion, skyrocketing debt is far less of a concern than letting the country's people and productive capacity lie fallow for the decade or more that it will take back to get to full employment.

Earlier:

• "A Govt. Not Run by the Financial Sector": Galbraith's Rx for Financial Reform
• "A Truly Extraordinary Slump": Reports of Recovery Premature, Galbraith Says

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As President Obama wrapped up his first trip to China this week, there was plenty of talk about partnerships but few concrete agreements reached on (1) whether or not China will let its currency float freely (2) and China's concerns about U.S. debt.

"Obama, Geithner and Bernanke, they're the three bond salesmen of the U.S. They're going to see our best client and hoping our client is happy," says Peter Boockvar, equity strategist at Miller Tabak. "Apparently they're not happy and the question is what do we do to make them happy?," Boockvar tells Aaron.

Of course, Boockvar is talking about the fact that China is the largest foreign lender to the United States. With Obama heading to visit America's largest creditor, it was no coincidence both Bernanke and Geithner publicly expressed support for a strong dollar during the past week, he says.

But Boockvar says anger about a depreciating dollar is aimed at the wrong direction. "Blame the Fed, don't blame the Chinese," he said. "The Fed is the one that's artificially depressing the dollar."

Furthermore, chatter about China allowing the renminbi to float is a "red herring," Boockvar says, noting Americans can't afford a price spike in imports. 

Bottom line: There's growing global competition for capital and the U.S. ultimately will have to play ball. So who will blink first?

From The Business Insider, Nov. 19, 2009:

The White House finds itself in a pickle: How to extend the TARP bank bailout without so enraging voters that incumbent Dems get the heave-ho next year.

And here's one creative solution on the table: Use the rest of the TARP to reduce the national debt!

Doesn't that sound good?

Well, of course it does.  Except that it's ridiculous spin.  The government borrowed money for the TARP.  Using what remains to "reduce the national debt" would simply mean giving our lenders (some of) their money back.

Meanwhile, however, other legislators are desperate NOT to return the TARP money to lenders but to use it for additional stimulus--this time of the allegedly job-creating variety.

David Cho, Michael D. Shear and Lori Montgomery, WaPo: The Obama administration is poised to extend the life of the highly unpopular $700 billion financial bailout and, to display a commitment to fiscal responsibility, is planning to use much of the leftover funds to reduce the national debt, government sources said.

Administration officials are grappling with how best to announce the extension of the Troubled Assets Relief Program at a time when the economy is struggling and the unemployment rate is at its highest point in 26 years. The officials are hoping that by putting roughly $200 billion toward paying down the $12 trillion national debt, they could mitigate the political fallout, the sources said.

No final decision about the fate of the bailout has been made, and officials are keenly aware that their preferred course contains risks.

Keep reading >

More coverage from The Business Insider:

• Obama's approval rating dips below 50%
• Obama ends idiotic war with Fox News, will do interview

"It's dangerous to be short this market," says Peter Boockvar, equity strategist at Miller Tabak.

Despite a penchant for bearishness, Boockvar says the rally can continue as long as the Fed keeps rates at zero.

"When you cut rates to nothing you're encouraging people to take risk," Boockvar says. "As long as asset inflation is [the Fed's] goal, the market could go higher but there are obvious consequences," including inflation.

The Fed is trying to create "the illusion of prosperity" by fueling asset price appreciation, Boockvar says, staying true to his reputation as a deficit hawk. Even if the U.S. stock market keeps rallying, "non-dollar assets" like commodities and emerging markets will continue to outperform, he says.

Unlike the U.S., emerging markets are "not weighed down by enormous debt levels" and local consumers are "much better off" than their American counterparts, the strategist says, expressing a strong preference for China.

"If you want exposure to global growth, it's going to be outside of the U.S.," he says, recommending the following...

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Many investors still look to those tech giants for leadership, but Howard Lindzon, CEO of StockTwits.com, says there's a new group of "horsemen" that deserve your attention and (perhaps) your investment dollars:

• Apple
• Amazon.com
• Google
• Priceline.com
• Gold
• Twitter
• Facebook

Lindzon gives the rationale for investing in this pack in the accompanying video, and talks about how his investing style compares with Warren Buffett's. In a nutshell, Lindzon's momentum style is the complete opposite of the value legend's approach. But "it's not the buying [of stocks] that matters, it's the holding and selling that matters," Lindzon says...

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From The Business Insider, Nov. 18, 2009:

Paulson & Co told its clients that Bank of America (BAC) stock will double in the next two years. 

In a quarterly letter to clients, Paulson said he expects the bank to rise considerably after writedowns ease up:

Bloomberg: “banks will have passed the current writedown cycle and have visibility for growth in 2012,” the letter said. Bank of America dropped to $2.53 in February amid concern that the U.S. might seize banks that ran short on capital. While the bank “has risen from when we purchased the stock, we believe considerable upside remains,” the letter said.

Paulson's bullish outlook follows the opposite move from SAC Capital, which just sold 90% of its BAC holdings.

More coverage from The Business Insider:

• John Paulson buys huge stake in Citi, while dumping Goldman Sachs
• Hedge funds chase Paulson into Cadbury shares

For months Kristin Bentz of the Talented Blonde blog has been telling the Tech Ticker audience that Abercrombie & Fitch was a stock headed for disaster. And for months, the stock has continued to climb to a series of new 52-week highs.

Last week, the company reported dismal third-quarter numbers. Earnings fell 39% and same-store sales plummeted 22%.

Guess what?

The stock rose because those lousy numbers beat even lousier expectations set by Wall Street analysts.

So is Bentz finally willing to admit defeat? No way.

Bentz believes short covering is responsible for some of the rally. At 14% of shares outstanding, short interest in the stock is very high, so she very well might be right on that point. Unfortunately, for her, being "right" has been a money-losing proposition.

On a positive note, Bentz's view that Aeropostale is stealing market share is gaining credibility; Abercrombie's management team did admit to this concern on last week's earnings call.

The Abercrombie bulls are likely to experience a "bout of indigestion" after the holiday shopping season, Bentz says, suggesting investors are better off in the aforementioned Aeropostale, Urban Outfitters and True Religion.

Disclosure: Bentz has no positions in stocks mentioned.

"Sell-side analysts are somewhat more optimistic across most of our industry than we believe is warranted in light of the harsh realities of the current environment," CFO Doug Scovanner said on the firm's conference call.

In beating third-quarter expectations but issuing cautious fourth-quarter guidance, Target would seem to be in the same boat as its main rival Wal-Mart, which provided similar results/guidance last week.

But Wal-Mart shares rose after its results last week and were higher again Tuesday amid revelations Warren Buffett's Berkshire Hathaway effectively doubled its stake in the retailer to 37.8 million shares in the second quarter. SEC filings also show hedge fund legend George Soros also upped his stake in Wal-Mart in the quarter by 1 million shares to 1.1 million.

Beyond the seal of approval from these two financial heavyweights, Kristin Bentz, a former retail analyst who writes The Talented Blonde blog, says Wal-Mart is winning the big box wars for a variety of reasons, including...

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