Goldman Back on Top, Thanks to Uncle Sam

Geithner, Paulson face grilling over 'backdoor bailouts' for AIG clients

(NEWSER) - Two Federal Reserve governors expressed their unease about the Fed's rejection of a plan to force big banks to return $30 billion in cash they received from AIG before its bailout in late 2008. The officials warned that the decision to let the banks, including Goldman Sachs, keep the collateral they paid AIG on credit insurance contracts might be "a gift" to the firms, according to documents obtained by the New York Times. More»

James Stewart on the week that Lehman failed, and meltdown loomed

(NEWSER) - James Stewart’s reconstruction of the 8 nail-biting days, a year ago, in which the federal government stepped in to stop the collapse of the world financial system—published in the New Yorker this week, just as Fed chief Ben Bernanke was declaring the recession officially over—makes riveting, tense reading. “I don’t think I can take another day of this,” one banker says getting out of the Goldman Sachs car on Day 4. “You’re getting out of a Mercedes to go to the New York Federal Reserve,” snaps Bernanke. “You’re not getting out of a Higgins Boat on Omaha Beach.” Not quite, at least. More»

Ex-Goldman exec coddled firm as Treasury sec, critics say

(NEWSER) - As a former Goldman Sachs exec, Henry Paulson vowed to avoid any potential conflicts of interest when he was appointed President Bush’s Treasury secretary. But seven months after he left office, the nagging questions surrounding Paulson’s tumultuous term in office suggest he may not have succeeded, Gretchen Morgenson and Don Van Natta Jr write in the New York Times. Critics remain suspicious of Paulson’s role in engineering a bailout for Goldman creditor AIG and dozens of conversations with his successor at Goldman. More»

(NEWSER) - The recession has been good to Goldman Sachs: The world’s most powerful investment bank snatched $10 billion in TARP funds, reclaimed $13 billion from AIG, watched archrival Lehman Brothers disintegrate, and found alumni spearheading Washington’s economic rescue effort. But this isn’t new, Matt Taibbi writes in a scathing Rolling Stone explainer, since Goldman “has engineered every major market manipulation since the Great Depression.” More»

Scandal isn't bonuses, it's payments to influential debtors

(NEWSER) - Eliot Spitzer is mad about AIG, and not because it’s giving out bonuses. No, the real scandal, he writes for Slate, is the tens of billions of taxpayer dollars going to pay back AIG’s counterparties. The decision to bail out AIG was made by Henry Paulson, Timothy Geithner, Ben Bernanke—and Lloyd Blankfein, CEO of Goldman Sachs. Which happens to be an AIG counterparty. More»