Goldman Sachs and Wall Street Reform

huffingtonpost.com — Goldman Sachs was the "most aggressive" financial firm to demand cash from AIG on what it viewed as souring deals during the financial crisis, the head of a federal investigative panel said Wednesday. Goldman Sachs Group, the most profitable firm on Wall Street, was the "first in the door" in demanding collateral from the disgraced insurer — once one of the world's most successful and creditworthy companies — on its derivatives deals, said Phil Angelides, chairman of the Financial Crisis Inquiry Commission. Goldman comprised 27 percent of AIG's derivatives portfolio at the end of 2007, yet held 89 percent of collateral that AIG posted to all of its counterparties, Angelides said, citing AIG documents. Wall Street's most successful firm was "way ahead of everyone else" on demanding collateral from the giant insurer, Angelides said. And Goldman was "much more aggressive" about marking down the value of those securities, he added.

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mcclatchydc.com — A congressional commission pressed Goldman Sachs executives Wednesday to spell out how much their company has earned from its exotic bets against the housing market, including $20 billion in wagers that helped force a $162 billion taxpayer bailout of the American International Group.

However, Goldman's president and chief risk officer told members of the Financial Crisis Inquiry Commission that their company never breaks out its figures that way.

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kansascity.com — Reversing its oft-repeated position that it was acting only on behalf of its clients in its exotic dealings with the American International Group, Goldman Sachs now says that it also used its own money to make secret wagers against the U.S. housing market.

A senior Goldman executive disclosed the "bilateral" wagers on subprime mortgages in an interview with McClatchy Newspapers, marking the first time that the Wall Street titan has conceded that its dealings with troubled insurer AIG went far beyond acting as an "intermediary" responding to its clients' demands.

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truthdig.com — A devastating report in The New York Times documents how Timothy Geithner’s New York Fed worked tirelessly to make sure that AIG was forced to pay banks such as Goldman Sachs 100 percent on dubious contracts that might otherwise have been slashed or subjected to lawsuits. For his efforts, Geithner was promoted to run the rest of the nation’s economy. The article is full of revelations that would be mind-numbing if we weren’t so used to reading about how taxpayers have been fleeced in the meltdown.

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