The notes before the embedded podcast are my own. A full transcript is available below the podcast.
The core problem in the financial sector: The root cause of the problems remains the same, and that is unchecked fraud. We have widespread massive fraud in our financial system that has acted as a potent neurotoxin.
So Goldman wasn't just a beneficiary of its own deals; it was the side beneficiary, because SocGen and Kelion might have sued Goldman for those deals. And they had gotten their deals protected with AIG. So it wasn’t just Goldman; it was Goldman and Goldman’s cronies who were bailed out in the AIG debacle.
None of it was investigated, and none of it has really been put in context in the mainstream media. And it didn’t end there; There were other financing and securitization contracts that AIG was involved with, and for which SocGen and Goldman were also given payments. And so AIG had multiple business lines, and when AIG unwound some of their contracts – this is after the crisis – their counterparties on unwinds of other derivatives, who were resolving some of AIG’s problems in other areas, got windfall gains because there was basically no bid in competition when AIG was unwinding those deals. If you look at the bad deal that the taxpayer got in the AIG debacle, it was a bad deal for taxpayers and it was a wonderful deal for all of AIG’s cronies.
Any competent liquidator would have clawed back from Goldman and SocGen and Kelion all of the money that AIG paid out to them before 2008, and it would have investigated them for fraud. And none of that happened.
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