Secret AIG Document Shows Goldman Sachs Minted Most Toxic CDOs

[dkf]

Feb. 23 (Bloomberg) -- When a congressional panel convened a hearing on the government rescue of American International Group Inc. in January, the public scolding of Treasury Secretary Timothy F. Geithner got the most attention.

Lawmakers said the former head of the New York Federal Reserve Bank had presided over a backdoor bailout of Wall Street firms and a coverup. Geithner countered that he had acted properly to avert the collapse of the financial system.

A potentially more important development slipped by with less notice, Bloomberg Markets reports in its April issue. Representative Darrell Issa, the ranking Republican on the House Committee on Oversight and Government Reform, placed into the hearing record a five-page document itemizing the mortgage securities on which banks such as Goldman Sachs Group Inc. and Societe Generale SA had bought $62.1 billion in credit-default swaps from AIG.

These were the deals that pushed the insurer to the brink of insolvency -- and were eventually paid in full at taxpayer expense. The New York Fed, which secretly engineered the bailout, prevented the full publication of the document for more than a year, even when AIG wanted it released.

That lack of disclosure shows how the government has obstructed a proper accounting of what went wrong in the financial crisis, author and former investment banker William Cohan says. “This secrecy is one more example of how the whole bailout has been done in such a slithering manner,” says Cohan, who wrote “House of Cards” (Doubleday, 2009), about the unraveling of Bear Stearns Cos. “There’s been no accountability.”
CDOs Identified

The document Issa made public cuts to the heart of the controversy over the September 2008 AIG rescue by identifying specific securities, known as collateralized-debt obligations, that had been insured with the company. The banks holding the credit-default swaps, a type of derivative, collected
collateral as the insurer was downgraded and the CDOs tumbled in value.

http://www.bloomberg.com/apps/news?pid=20601109&sid=ax3yON_uNe7I

[pleah]

1. K&R

[mmonk]

2. The article is correct. The measures taken are not nearly enough

to get it all back in order. Since the parties now both support deregulatory ideology and so called "growth" marketology instead of foundation soundness, we are still in trouble. And since both parties view economics from only a Wall Street perspective, main street will continue to be abandoned unless more programs like infrastructure are coming down the pipeline.

[AllentownJake]

3. Does anyone have a positive, true, article on Goldman Sachs business activities?

I'd just like to see if one exist.

Honestly, Al Quaeda has done less damage than these fuckers.

[dkf]

4. Goldman would take down countries if it made them a profit.

They look like a rogue company and a handicap to the image of the United States.

[AllentownJake]

5. I agree if these corporations are really people

Than this one is the worst of the sociopaths, and there is no cure for a sociopath.

[Igel]

6. "Most"?

$17.2 billion of the $62.1 billion. Most?

A plurality, to be sure.

A disproportionate plurality? Dunno. Did Goldman-Sachs have a 33% bigger share of the CDO-minting market than Merrill-Lynch?

(Goes off muttering like Zelenka on SG: Atlantis. Zasranny voly, nikdy nerekaji co musi ric abychom tomu uplne rozumeli ...)

[dkf]

7. Oops I guess they are calling it most when it is not a majority