AIG bailout saved Goldman from major loss

From Naked Capitalism (and indeed, it doesn’t get much more naked, greedy, and self-serving than this.)

Gretchen Morgenson in the New York Times reports that Goldman and no other Wall Street firm was involved in the AIG rescue talks and an AIG failure would have created a hole as big as $20 billion in Goldman’s balance sheet.

This is special dealing, pure and simple. Even if AIG needed to be salvaged (there was considerable agreement on this point), having Goldman deeply involved in the process is cronyism. But that’s been a staple of this Administration.

Indeed. the government only really got concerned about the crisis when Goldman stock started getting hammered hard and was dropping like a stone. That’s when they intervened.

  • As Naomi Klein, author of The Shock Doctrine, in an interview with John Amato commented:
    thursday evening: “[T]hey all knew it. They all knew it and they were making money as fast as they could based on their belief that they would get bailed out. Because it is entirely consistent with the Bush administration over the past 7 years. One of the other big lies floating around is this is somehow a departure from the way the Bush administration usually does business. It’s not a departure; it’s just a change in the direction of the flow. This is what they have been doing for 7 years: transferring public money, public wealth, into the hands of private crony contractors. And now as their final act they are taking the bad debts of the corporate sector and transferring them to the taxpayer. There is no aberration here; there is no big surprise. This is entirely consistent with everything they’ve done.

    They’ve been planning this for six months…”

  • cheryl

    Gee, You don’t think it has anything to do with the fact the Henry Paulson came from Goldman Sachs do you? That and perhaps most of the Cabinet and White House and family have the buck buried in Goldman Sachs.

  • By a bizarre coincidence, yes, Paulson is a former CEO of Goldman.

  • DJ

    A little odd, too, that Phil Gramm, author of both Gramm-Leach-Bliley and the Enron Loophole, went from Senate to UBS, don’cha think?

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