Toon- 40% of middle class wealth wiped out!

[snot]

23. The losses on individual homes were just a fraction

of the GAINS they made on derivatives. The mortgage bubble was bad, but it's almost a red herring.

The real crime consists in that Goldman Sachs et al. were buying insurance policies -- credit derivatives -- against losses on mortgages they didn't own and knew would go bad. AIG issued those policies and didn't have the money to pay on them when the bubble burst; but we bailed out AIG, so Goldman got paid, when it should have had to eat its losses.

This is simple fact; and the same basic thing went on – and is still going on – all over the world.

So yes, the money did not go poof. The losses on mortgages, and the premiums paid for the derivatives, were just a small price paid by certain players to win big on "bets" they knew would go bad. Which the US gov't made good on, at your and my expense.