If it talks like a scam, walks like a scam and smells like a scam – then it must be a scam. I can't get past the smell in the deal between Goldman Sachs and A.I.G., and it is Goldman Sachs that seems to be the source of the biggest stench. The more I read about Goldman, the more I believe someone needs to go to jail.
The way I read this article, Sachs stacked the deck for its profit from every angle. It knew before hand that the mortgage securities it bought were over-the-top inflated and it knew that AIG would fail by insuring, those Credit Default Swaps, the securities against loss and it knew that a global economic crisis would occur when the mortgage bubble burst. And, it didn't care. It hedged its bets in the dark backroom and let the nation falter on the brink of disaster. It made record profits on the securities. It made record profits from AIG payments when the securities went south. And, it made record profits when the tax payers bailed AIG out because AIG had to use the bailout money to pay off the insurance policies Sachs bought. Sachs paid record bonuses and stock options to the people who schemed the best. It even schemed to launder money through the French Societe Generale Bank to its coffers.
If some (many?) at Goldman Sachs don't go to jail, I will be very, very disappointed.