Rolling Stone's Matt Taibbi Puts It All Together

Still reeling from the IRS bill that our family has to pay, today I received a link to Matt Taibbi's latest article for Rolling Stone. It will make your blood boil! Essentially the country, and perhaps the world, has been taken over by Goldman Sachs. And they aren't very good at it, this ruling the world thing.

Current Treasury Secretary Timothy Geithner, former Treasury Secretary Henry Paulson, and the guy who is allegedly overseeing the TARP payments, Neel Kashkari, well, they are all Goldman Sachs alum. It appears that the CEO of Goldman Sachs, Lloyd Blankfein, was in the room when the decision was made to bail out AIG. The reason: Goldman was the largest purchaser of the "financial products" devised by Joe Cassano at the AIG London office. If AIG failed, then Goldman would have no coverage for the credit default swaps they had bought.

"Goldman Sachs, it turns out, was Cassano's biggest customer, with $20 billion of exposure in Cassano's CDS [credit default swap] book. Which might explain why Goldman chief Lloyd Blankfein was in the room with ex-Goldmanite Hank Paulson that weekend of September 13th, when the federal government was supposedly bailing out AIG."

This is much more than bonuses, although surely it was greed and arrogance that propelled these insane risks. The entire banking system must be overhauled. Credit card companies have to be reined in from charging usurious fees.

Read The Big Takeover with a large martini in hand and then wonder: how the hell do we get ourselves out of this mess? It isn't by propping up the banks and insurance companies that got us here with their greed. But I don't know what to do. Do you?

Post script: The New York Times in its Deal Book blog, edited by Andrew Ross Sorkin (who will be on Bill Maher tonight), posted that Goldman disputes it had AIG exposure.

Further Post Script: Add Larry Summers to the list of Obama advisers who have a lot of hide in the financial crisis. According to Frank Rich in his NY Times column this morning, "An even dirtier secret is that a prime mover in keeping that stuff legal was Summers, who helped torpedo the regulation of derivatives while in the Clinton administration. His mentor Robert Rubin, no less, wrote in his 2003 memoir that Summers underestimated how the risk of derivatives might multiply “under extraordinary circumstances.”

"Given that Summers worked for a secretive hedge fund, D. E. Shaw, after he was pushed out of Harvard’s presidency at the bubble’s height, you have to wonder how he can now sell the administration’s plan for buying up toxic assets with the help of hedge funds. It will look like another giveaway to his own insiders’ club."