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Oct. 30 2009 - 5:02 pm | 235 views | 5 recommendations | 48 comments

Forget Galleon: What about Goldman’s ex-boss?

The deal contributed to the more than $14 billion that over 18 months was handed to Goldman Sachs, whose former chairman, Stephen Friedman, was chairman of the board of directors of the New York Fed when the decision was made. Friedman, 71, resigned in May, days after it was disclosed by the Wall Street Journal that he had bought more than 50,000 shares of Goldman Sachs stock following the takeover of AIG. He declined to comment for this article.

In his resignation letter, Friedman said his continued role as chairman had been mischaracterized as improper. Goldman Sachs spokesman Michael DuVally declined to comment.

AIG paid Societe General $16.5 billion, Deutsche Bank $8.5 billion and Merrill Lynch $6.2 billion.

via New York Fed’s Secret Choice to Pay for Swaps Hits Taxpayers – Bloomberg.com.

Robert Khuzami, Director of Enforcement at the SEC, speaks at a press conference where charges where announced against hedge fund managers, Fortune 500 executives, and a management consulting director for participating in insider trading schemes that resulted in more than $20 million in illegal profits, at the US Attorney's office on October 16, 2009 in New York City. (Michael Nagle/Getty)

Robert Khuzami, Director of Enforcement at the SEC, speaks at a press conference where charges where announced against hedge fund managers, Fortune 500 executives, and a management consulting director for participating in insider trading schemes that resulted in more than $20 million in illegal profits, at the US Attorney's office on October 16, 2009 in New York City. (Michael Nagle/Getty)

It’s kind of amazing that with all the uproar over the Galleon business, nobody is making much hay over the recent revelations about the AIG bailouts, which make former Goldman chief and former New York Fed chairman Stephen Friedman look every bit as guilty of insider machinations as Raj Rajaratnam of the Galleon fund.

It’s impossible to grasp the totality of Friedman/Goldman’s grossness with regard to the AIG story without a little context. Remember the basic timeline. In the middle of the mortgage bubble, Goldman Sachs found a patsy-buffoon named Joe Cassano at a little corner of AIG called AIG Financial Products, or AIGFP. Cassano was recklessly writing hundreds of billions of dollars worth of credit default swaps for banks like Goldman and Deutsche, essentially insuring certain investments for these banks, including extremely risky mortgage-backed deals.

Goldman took out billions of these CDS positions with Cassano, who had written upwards of $440 billion of these CDS without having even a fraction of the money he would have needed to cover that bet in the event of a disaster of the type that actually ended up taking place, specifically a downgrade of AIG’s credit rating that forced Cassano to pony up wads of cash to cover those positions.

The important thing to remember about all of this is that just because Goldman was buying “insurance” from Cassano, that doesn’t mean they were being responsible. On the contrary: Goldman was creating well over ten billion dollars worth of exposure to a guy that they must have known was an absolute idiot. Now, in a world where actual capitalism existed, Goldman should then have been highly invested in making sure that AIG did not go under. A dead and bankrupt AIG should not have been good news to a company like Goldman Sachs, which had billions of dollars riding on AIG’s financial health.

But if anything Goldman behaved throughout the runup to AIG’s collapse like it couldn’t care less if the company died. In fact Goldman accelerated AIG’s demise by making margin calls against AIG, for both the CDS deals and for deals it had done with Win Neuger, who was running AIG’s securities lending business. What really sank AIG was the fact that the downgrade of its credit rating permitted companies like Goldman to demand large sums of money from AIG in the form of these margin calls, and AIG could not get its hands on enough cash to meet its demands, resulting in the death spiral situation we all witnessed last September. Of all the firms making such demands against AIG, Goldman was the most aggressive (I have more on this coming out in a forthcoming book) and my sources who were involved in the AIG bailout bunker scene of a year ago almost to a man report that Goldman and its chief Lloyd Blankfein took an extremely hard line with AIG.

Why would it act like that? Well, in a normal capitalistic situation, it wouldn’t. But Goldman, it turned out, had an ace in the hole. It seems that when the state stepped in and decided to bail AIG out, its former director, Stephen Friedman, was among those making the decision that AIG’s counterparties should be paid 100 cents on the dollar for its CDS debts. It never made sense that AIG/AIGFP would decide on its own to pay its creditors 100 cents on the dollar for its debts, but now we know, thanks to reporting from Bloomberg, that it wasn’t AIGFP and its CFO Elias Habayeb who was making that decision.

It was, instead, a group of people from the New York Fed who gave that order a group that included Tim Geithner and Friedman. Goldman ended up getting almost $14 billion from AIG after the bailout. And Friedman, we later found out, bought 50,000 shares of Goldman stock after this deal was struck. He resigned in May from the Fed, a few days after the Wall Street Journal broke the story about Friedman’s stock purchases.

Friedman surely had information about key moves involving the bank — like Goldman getting paid off at par in the AIG bailout, or Goldman getting a federal bank charter overnight so that a mountain of cheap Fed money could save it from bankruptcy — before the market got it. That he bought 50,000 shares in Goldman after the AIG bailout and is not in jail right now is sort of amazing, until you consider that it will be a cold day in hell before a former head of Goldman Sachs is arrested for insider trading, even when he gets caught doing it red-handed.

All of this matters for two reasons. One, it’s yet another example of how Goldman’s success isn’t attributable to how “smart” the bank and its employees are.

Instead of working something out with a company it had stupidly become overexposed to, Goldman instead hastened AIG’s demise because it was, perhaps, the one way it could cash in fully on its reckless deals — by forcing it into the arms of the government and getting the taxpayer to pony up for Cassano’s dumb calls.

Had AIG proceeded to an ordinary bankruptcy, had the company’s downfall happened via normal market procedures, Goldman might have gotten 40, 50, maybe 60 cents on the dollar. If that! Instead it got completely paid off, among other things because its connections to the government actually incentivized it to cripple a company to which it was exposed to the tune of billions.

Second, the non-punishment of Friedman just stands out like a hairy, golf-ball-sized mole on the face of the American capital markets. No question about it, it’s interesting that Galleon and Raj Rajaratnam are getting perp-walked by the FBI (note that it’s the FBI, and not the castrated and seemingly completely captive SEC, that’s going to be pushing these enforcement actions). Galleon isn’t small potatoes and from what I understand there are other hedge funds with even higher profiles that may fall later on. These are surprising and meaningful moves and and it suggests that the enforcement community is not yet completely corrupted.

But Goldman’s continued impunity leaves a mighty stink-cloud over American business, no matter how many Raj Rajaratnams get dragged off to jail.

Thanks again to Eric Salzman over at MonkeyBusiness, by the way — and good luck with your new thing.


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  1. collapse expand


    You sound like a crazy man with all this conspiracy theory talk. You’re entering Beck territory I’m afraid.

    If Friedman committed Insider Trading, don’t you think either (a.) The NY DA’s office; (b.) The SEC; (c.) The S.D.N.Y.’s USAtty’s office; would have brought criminal or civil charges?

    And even if, for some reason, those respective agencies were too busy (a.) busting weed dealers in Washington Square Park and harassing Critical Mass bike riders; or (b.) not busting the world’s biggest and 2nd biggest Ponzi schemes; or (c.) making sure that the Governor isn’t banging prostitutes across state lines; –> Don’t you think (d.) the NYT’s would’ve scooped this, or (e.) the WSJ; and if not them, don’t you think (f.) Drudge would’ve found something?

    I highly doubt that the evidence that the Former CEO of Goldman Sachs and the NY Fed committed insider trading, would break on True/Slant. Because if Matt’s allegations are true . . . well . . . we’re either all F’ed . . . or maybe we’ll all just need some anti-depressants.

  2. collapse expand

    Mr. Taibbi,

    It has often been suggested that this wild orgy of fiscal mismanagement, personal greed, and regulatory blindness over the last decade or two is some sort of aberration of recent years from the norms of capitalism. The shell games and Ponzi schemes that Wall Street has been practicing are supposed to be an embarrassment to real capitalism. However, for me, the question, what would have happened to Wall Street if they had not been cheating us and each other? What would have been the alternative legitimate investments that would have yielded comparable profits? The simple fact is that there have been very few opportunities for reasonable, prudent investing that yield significant profits, certainly nothing like what G/S or AIG had been racking in. Capital always seeks the highest return. No one wanted to question a system that was, at least until recently, was generating huge profits.

    • collapse expand

      >”Capital always seeks the highest return. No one wanted to question a system that was, at least until recently, was generating huge profits.”

      Yes and no. I’m more in line with the aberration of capitalism you referred to. The good parts of capitalism involve developing quality products or services that people recognize as beneficial and will then purchase. Company’s would operate responsibly to keep this going and keep a profit. The focus was on the company name for quality of the good(s) and/or service(s) produced, not the highest financial return.

      Profits are nice, but they should not be the focus. This is the aberration (I love that word and have used it comments outside of this blog, so thanks for bringing it in). When companies are only thinking of their bottom line, they lose sight of their whole reason for being. But that’s OK, as long as they rake in millions and no one has the cahunas to stop them. That the $ transactions of Wall Street mushroomed, into what *should* have been hallucinations way beyond our imaginations, is no surprise and a sad reality.

      In response to another comment. See in context »
      • collapse expand

        “The good parts of capitalism involve developing quality products or services that people recognize as beneficial and will then purchase”

        Are you referring to the KFC Famous Bowl, or the internet?

        “Profits are nice, but they should not be the focus”

        They are, though. Corporations are legally obligated to maximize profits, not ethics or health. . . as if most executives and stockholders weren’t predisposed to do so anyway.

        “I’m more in line with the aberration of capitalism you referred to”

        This kind of thing is the rule, not the exception. Before the New Deal, about once a decade the crony capitalists would amass enough wealth to gamble the economy on high-risk bets, and eventually lose. Now that those regulations have been gutted, it’s an easy prediction that this will happen again.

        In response to another comment. See in context »
  3. collapse expand

    This did not break on true slant. The conflict of interest has been known for months between the NY Fed, Goldman/Friedman and AIG.
    Bloomberg had an article about Friedman purchasing the 50,000 shares earlier this week.
    All Taibbi is doing is connecting the dots.

    I think we can all agree, what Taibbi is claiming is pretty rational, and lets be honest…
    This WAS insider trading.

  4. collapse expand

    More grist for the mill. I just got done explaining to some students how their collaboration on homework was actually cheating. Then this crap surfaces and well – why wouldn’t you want to cheat?

    Dan Ariely gave a great talk at TED on Why We Cheat(http://blog.ted.com/2009/03/why_we_think_it.php). It’s definitely worth watching for those who haven’t had a chance to see it when it circulated last March.

    You go with your book Matt. It’s the good fight, so stay in the match.

  5. collapse expand

    bleh – linking here. I tried something new to no avail. Here’s the link: (http://blog.ted.com/2009/03/why_we_think_it.php).

    I’m gonna try it this way too before heading out, just in case it works: [Dan Ariely-Why We Cheat}(http://blog.ted.com/2009/03/why_we_think_it.php).

  6. collapse expand

    [Dan Ariely](http://blog.ted.com/2009/03/why_we_think_it.php)

    Or just google Dan Ariely and Why We Cheat. I promise it’s worth all these repeat posts.

  7. collapse expand


    I’m confused by the comments, profits are good for the country no matter how they are attained nor that a capitalistic government supplied the profit to “save the economy”?

    Does this mean that the mafia is good for the country?

    Martha Stewart goes to jail for insider trading and this guy who has a guy inside and it is impossible to even accuse someone like Galleon?

    Because Goldman is insuring their ponzi bets it’s all legal?

    Is it possible that Matt Tabbi is on to something…writing in Rolling Stone…and no one else is seeing the story.

    Erin E. Arvedlund comes to mind…who started questioning the profits of Bernie Madoff and broke the story…in 2001. No one paid attention, folks…Bernie was a financial genius.

    The FBI have a fairly good record of turning people I look forward to following this story even if some conspiracy nut is writing them.

  8. collapse expand

    Why all this tapdancing around insider trading, always ignoring the 900 lb gorilla in the room? The bulk of these AIG payouts to Goldman and others were for short bets with credit default swaps on the ABX Index. Insider knowledge of mortgage servicing fraud can be obscenely profitable whether utilized to “hedge” mortgage servicing rights or going short subprime on ABX.HE with highly levered bets. Mortgage servicing fraud is the engine that drives Wall Street’s credit derivative casino, feeding it a steady stream of bogus defaults along with attending insider servicing data in order for proprietary traders to place highly levered rigged CDS bets. The majority of these servicers are subsidiaries of the very same investment banks placing these rigged bets. No firewalls between trading desk and subsidiary servicers here. Afterall, it was investment bank traders who created the ABX Index. Every single mortgage servicer to ABX reference entities has been in recent years charged with mortgage servicing fraud, not only in state and federal courts but in FTC and OTS investigations resulting in “cost of doing business” settlements and supervisory agreements. None of these settlements has ever been enforced with adequate oversight to ensure ‘best practices’ are observed and upheld by servicers and so as they say “the band played on”. If you want to seriously talk “insider trading”, it’s time to acknowledge the real playbook. THIS is the largest insider trading scheme of all time and they ALL did it. Even Harry Markopolos says CDS Fraud Will Make Madoff Look “Small-Time”.

    • collapse expand

      Which government agency has loaned $800 billion in stocks to short sellers?

      Ans: CALPERS, the california state employees retirement system is hugely responsible for feeding short selling sharks

      From the CALPERS taxpayer-paid website:”CalPERS launched its Securities Lending Program in the early 1980’s as an effort to earn additional income on its existing portfolios. Over the last eight years, CalPERS has auctioned off $779 billion in assets through 30 separate auctions. The program has $38 billion in shares and cumulative net earnings approaching $1.2 billion. Over 73% of the total cumulative income has been generated in the last eight years since moving to an auction-based platform.”


      In response to another comment. See in context »
    • collapse expand

      MutantCap has it dead on here. Start focusing on the relationships and trades that happen around and between the servicers and their parent corps and this entire nightmare will unspool. But don’t bother doing it unless someone plans on bringing criminal charges against everyone in the industry. That would just be too much of a tease.

      Demonstrate it to yourself sometime. Grab your local public notices. Throw a dart at the foreclosures. Pick the closest one that has been securitized and pull the trust up in the SEC database. I guarantee that literally EVERY time that you perform this exercise you’ll find that the the foreclosing trust has filed a 15-15D (suspension of duty to report) within 18 months of the issuance of the trust.

      If these things are supposed to be generating streams of income for X number of years – let’s assume 30 years for the moment – how/why can there be SOOOO much investor washout within the first 18 months? This is a clear case of deliberate obfuscation. The 15-15D gets filed, the paper trail of information vaporizes and no one is the wiser. Hell, when I called and asked, SEC personnel couldn’t even find the *Pooling & Servicing Agreement* for the MLMI 2002 AFC-1 trust that my note is purported to be securitized into in their own files. And every time this happens, note who the trustee and the servicers are. You’ll start seeing patterns emerge.

      MLMI 2002 AFC-1 is a good example to use actually. Still being rated by Fitch, Moody’s and/or S&P as of last year I believe. And yet, if memory serves, MLMI filed their 15-15D somewhere mid/late 2003. Nothing has been filed since.

      Try running your “favorite” servicer through dockets.justia.com some time – or PACER if you’ve got access. See just how much litigation has been filed against each of them JUST at the federal level. This year alone, SPS has had 55 cases brought against them. **55**. And yet, through the HAMP program, SPS has received over $700 Billion in funds. For trying to steal people’s homes.

      And everyone in the alphabet, including the FTC, OTS, OCC, DOJ, FBI, Secret Service, HUD, COP and SIG-TARP knows about this. They know, because I and I don’t know how many other Mortgage Servicing Fraud victims have told them and provided them with evidence repeatedly. And still, to the best of at least MY knowledge, the connections simply refuse to be made.

      Mike Dillon
      Manchester, NH

      In response to another comment. See in context »
      • collapse expand

        Here’s rest of that quote where Harry Markopolos says CDS fraud will make Madoff look “small-time”.

        “To put it in simple terms, it is like buying fire insurance policies from five different insurance companies on your neighbor’s house and then burning down the house,” he said.

        Got the picture now?

        In response to another comment. See in context »
  9. collapse expand

    For a more plausible view of GS’s exposure to AIG this is worth reading:


    Also I don’t really buy the Friedman insider trading story – it’s just too obvious/blatant. Firstly, as a director of the Fed, how much would he actually be aware of the Fed’s operations with respect to AIG? Secondly, he sought and received permission to buy the stock. Thirdly, I find his explanation that bought the stock as a director of GS seeking to show “solidarity” with the firm oddly plausible.

    • collapse expand

      I thought Friedman was in on the discussions to bail out AIG, that that was the point.

      A link on ZH today had a video of Dylan Ratigan with two guests decrying the corruption on Wall Street. One of the guests was Henry Blodget. When Blodget is what passes for an honest man, we truly are in a New Normal.

      In response to another comment. See in context »
  10. collapse expand

    Cassano,that cocksucker! I read your post as “pasty buffoon,” which I like better- – recalling the pseudopod, in the Janeane Garofalo glasses, emerging from his Knightsbridge bunker.

  11. collapse expand

    The fix was in, through and through.

    Would you buy insurance from a company you knew could not pay?

    Goldman might have bought the protection to satisfy capital requirements allowing them to lever up more, but they could have done that with anyone.

    But with anyone, they stood the risk of getting a haircut if things were dicey enough. But what would make them think AIG was the answer?

    Possibly because they knew AIG was setting themselves up to be systemically important. AIG saw the writing on the wall five years ago. They were going down, and they crafted a plan to embrace failure. They set out to fail, and succeeded. They are the biggest failure in the history of the planet, and that was enough to secure a government rescue.

    Think about it: why would an insurance company create such a large book of financial products and then not hedge it? They live and breath risk, but they suddenly forgot to hedge their massive book.

    The most crime-infested cesspool on earth is Wall Street. They could empty Rikers Island in Wall Street, and class up the place.

  12. collapse expand

    With thugs like Bernanke, Geithner, Paulson, and all the other various crooks from the Goldman Sachs Crooks Breeding machine……where do you start the prosecutions?

    If this were China, all these crooks would have been hung long ago….instead of being handed the combination to the nation’s safe……

  13. collapse expand

    I’m glad to see Matt pointing out the elephant in the room. Of course this is insider trading by Friedman. I had the exact same reaction as Matt immediately after I read the Bloomberg article. The whole thing stinks like a gangrene infected wound. The problem is that Friedman is “too big to jail”.

    And then there’s Geithner’s role in all of this. And rather than being demoted for his incompetence in dealing with AIG, he is promoted to the top Treasury position.

    And now the Goldman Gang is going after Maxine Waters because she had the audacity to question Geithner’s connection to Goldman. Watch the video at the end of my article titled “Timothy Geithner: The Goldman Sachs fink in the White House” to see how Waters made Tim sweat.

  14. collapse expand

    Warren Buffett was knee deep in this taxpayer swindle and has profited far more than Friedman, Blankfein or anyone else.


    Thanks for keeping the heat on Goldman and its cohorts but take a look at Buffetts involvement. Without him TARP may have never been hatched and AIG may not have been rescued.

  15. collapse expand

    Great blog/article as usual, Mr. Taibbi.

    Isn’t Friedman still on several of Obama’s intelligence boards? I’m pretty sure I didn’t see any notice that he resigned those.

    Guess those banksters require their insider intel, huh?

    And yes, CALPERS, as well as the majority of >$5 billion pension funds have funded the de-employing of America.

    The Taibbi never fails……

  16. collapse expand

    Geithner’s Secretary: “Mr. Geithner, Wall St. is on the line.”

    Geithner: “Thank you Hillary, I’ll take it in my office.”

    Geithner: “Lloyd is this you?”

    Caller: “No it’s Friedman.”

    Geithner: “Hello Stephen, what can I do for you?”

    Friedman: “Tim, I’ve got a problem. Bloomberg just broke
    the news about the 50,000 shares of GS that I
    bought last year during the scam. During the
    days of impending financial armageddon, when
    investment banks were on the endangered
    species list. Remember, I bought the shit for
    about $90/share.”

    Geithner: “Don’t worry Stephen, I’ll take care of it.”

    Friedman: “Thanks Timmy, I owe you one. I’ll do your
    taxes for you next year.”

    Geithner: “Hillary, get me Gensler on line one please.”

    Gensler: “Hey Tim, what’s up?”

    Geithner: “Gary, we’ve got a problem. I called you instead of the SEC, because well, we need an inside guy for this job. Bloomberg broke a
    story about Friedman buying 50,000 shares
    of Goldman when the stock was tanking
    because of the scam. Even a drunk Giants
    fan would know this is insider trading.”

    Gensler: “No problem Tim, we’ll round up some of the
    usual suspects to get the word out that we’re
    on top of this. I’ll call the FBI immediately.
    We’ll nail that Indian dude over at Galleon, we’ve
    got some good shit on him. That should help
    get the spotlight off of Friedmonster.”

    Geithner: “Thanks man,

  17. collapse expand

    The SEC needs to change their slogan. The phrase “Too little, too late” seems appropriate.

  18. collapse expand

    Wanted to drop a note that apparently McClatchy (last of the decent bureaus) has had a five month investigation going into Goldman Sachs and the first article goes live in about an hour:


    “Coming Sunday: Goldman Sachs’ low road to high profits

    No Wall Street investment firm has emerged from the global financial crisis more intact than Goldman Sachs. Now a five-month McClatchy investigation shows that the firm’s winning strategy may have violated U.S. securities laws. The first installment of this four-part series goes live at http://www.mcclatchydc.com at midnight Eastern time.”

  19. collapse expand

    Thank you, Mr Taibbi, for this darkly fascinating blog.

    The thought that’s rumbling away at the back of my mind is “How are Goldman Sachs toying with the Federal debt?”. How big have they gone in on the T-bond market? (and did they use AIG bailout money to do so?!).

    What implications would the kind of tactics we’ve seen described in this post (and others) have on the national economy if applied to Federal bonds? Where will inflation go? Is the nation being shorted?

  20. collapse expand

    Matt..forget Osama these guys are the real enemy within..keep up the good work!

  21. collapse expand

    Why has my comment re Goldman Sachs’ Lloyd Blankfein meeting with Nathan Rothschild’s pal Oleg Deripaska courtesy of the FBI being blocked ?I posted it twice.Although like you I have opinions about news that grabs my attention and don’t respect Putin for his involvement with either Rothschild or Deripaska – it is even worse to me that the FBI is allowing him into U.S. to negotiate an IPO whose shjares will probably futher enrich him at the erxpense of ripping off Americans.But that is my opinion.I f you had an alternative viewpoint you could state it rather than censor me.At least I don’t go around writing aricles wishing the death of anyone the pope or other even though I have written unfavorably about the Pope regarding his anti-birth control stance and ingorance of science history.
    And if you had ever been ripped off by those who falsely claim stocks were ‘naked shorted’ to draw attention from their own stock manipulations you might be concerned more abouyt the truth about that as well rather than spreading false information about Bear Sterns being ‘naked shorted’ and confront the fact that the same idiots who spread rthat rumor including ex SEC Chair Chris Cox also claim even Freddioe Mac Fannie Mae AND GOLDMAN SACHS WERE ‘NAKED SHORTED’.Ha !
    To dislike Nathan Rothschild and the Russian Jewish mafia is not to be anti-semitic but anti-fraud and whether you relise it or not European or German Jews were NEVER ’semites’ in the first place any more than I could could claim to be Japanese if I converted to a Japanese version of Budhism !
    It’s Arabs who are semites not white European converts to Judaism whose Nazi like Zionism has brought us all the fascist Zionism we live with today.And the right wing fundie Christians need to be made to fact the reality that their Zionist pals aren’t semites at all.
    Anyway I don’t understand why I am picked out for censorship when I wouldn’t have even known about you had you not started adding to the misinformation about so called ‘naked short selling’ that sent my money to LOM of Bermuda
    or Caymans with Israeli connections and later after 9/11 shares of Endovasc were promoted illegally in Hong Kong through Bellador Group of Kuala Lumpur with Dubai connections.It was NOT ‘naked shorting’ so I wish you would get your facts straight when you choose a subject to write about.
    Whatever happened to stock fraud investigators like Christopoher Byron ? Oh yeah Rupert Murdoch and Steve Forbes put an end to them.
    Tony Ryals

  22. collapse expand

    “in a world where actual capitalism existed, Goldman should then have been highly invested in making sure that AIG did not go under”

    Thanks for the laugh, Matt. Why, exactly, did you write this? Because the last thing Goldman Sachs would want is for a competitor to vanish overnight? Because in a system that encourages the amassing of wealth instead of the practice of ethics we should expect executives to behave with the greater good in mind? How is this kind of thing not “normal capitalism” that has been happening for centuries?

    • collapse expand

      Well, Goldman had a lot invested in AIG – in a sane world where normal bankruptcy would have occurred, Goldman would have lost around half of their investment. That’s the point – they knew they wouldn’t, so they drove them into the dirt. Nothing to do with ethics – just the most fruitful way of recovering your losses.

      In response to another comment. See in context »
  23. collapse expand

    Poor Martha Stewart – got good & scared by some insider and did actual time. Meanwhile, these guys… it’s sick.

  24. collapse expand

    We must have a huge march on Washinngton to show our Reps and president we wont take this anymore.The banks have taken over our treasury and the too big to fail are getting even bigger.If WE dont protest this and show those in power they need to be afraid of US they will take this country down even more.

    Whats it going to take?

  25. collapse expand

    Great Article. Where is the rest of the media on this stuff??? Too busy with Balloon Boy.

    One mistake though: “Goldman took out billions of these CDS positions with Cassano”

    I am sure you meant “Billions of dollars worth of CDS positions”?

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    About Me

    I'm a political reporter for Rolling Stone magazine, a sports columnist for Men's Journal, and I also write books for a Random House imprint called Spiegel and Grau.

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