Wednesday, February 24, 2010

"Gasoline On The Fire" Is Motto At Goldman Sachs

Even more for the “Wall Street Ire” file this morning: It has now been confirmed that Goldman Sachs bet against the very subprime assets it sold to AIG, which ultimately caused the insurers collapse. Here’s the breakdown, per a Bloomberg report and documents recently released from the House Committee on Oversight and Government Reform:
· Goldman Sachs underwrote $17.2 billion of CDOs for AIG, more than any other firm · Knowing precisely the garbage it had underwritten (our assertion), Goldman bought billions in credit default swaps that would rise in value as AIG stumbled (fact) · AIG ultimately paid Goldman -- with taxpayer dollars confiscated by many former Goldmanites in the Treasury -- the full value of their default contracts: $14 billion.
Of course, all this has been suspected for so long that it was assumed to be true… but now it’s in stone. How this isn’t securities fraud, we don’t know… it’s like selling a teenager napalm (that you made in your backyard) and buying fire insurance on his dad’s house.

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