Did you know that Henry Paulson, George Bush's Treasury Secretary, was the ex CEO of Goldman Sachs?
Did you know it was Paulson who led a team of regulators and bankers in early September 2008 to determine what to do with the most severely wounded financial institutions and that one of the participants in those meetings was Lloyd C. Blankfein, Paulson's successor at Goldman Sachs?
It was this team of advisers who recommended that Lehman Brothers, a competitor of Goldman Sachs, be allowed to fail.
The same team of advisers recommended that AIG be bailed out with taxpayer funds. It is alarming to learn that with the first $85 Billion AIG received from the Fed, $12.6 Billion was used to pay a debt owed to Goldman Sachs.
In effect the "Goldman Sachs People" advised the Fed to bail out a company that owed them money (AIG) and advised the Fed to allow their competitor (Lehman Brothers) to fail.
In 2006 when Bush nominated Paulson to become Treasury Secretary, Paulson owned over 4.5 Million shares in Goldman Sachs, estimated to be worth over $700 Million. Obviously Paulson was extremely well connected and had many friends who had a vested interest in seeing Goldman Sachs stay afloat, and if that meant keeping AIG afloat, then so be it.
According to Bloomberg.com, "While he (Paulson) invested $10 billion in Goldman Sachs in October (2008), twice as much as Buffett did the month before, Paulson gained certificates worth one-fourth as much as the billionaire." Obviously Warren Buffet made a far better deal to acquire Goldman stock than Paulson did, using taxpayer's money.
As per an article on Bloomberg.com: "Paulson’s warrant deals may give taxpayers less profit from any recovery in financial stocks than shareholders such as Goldman Sachs Chief Executive Officer Lloyd Blankfein." (Remember Blankfein was one of the participants in the "bailout meetings".) Buffett received 43.5 million Goldman Sachs warrants valued at $82.18 a piece on the date of the transaction, or $3.6 billion, Bloomberg analytics show. Paulson, who served as the New York- based bank’s chief executive officer until 2006, injected twice as much taxpayer money into Goldman Sachs a month later and got 12.2 million warrants worth $72.33 each, or $882 million.
If the Treasury had received the same terms as Buffett, taxpayers would have become the biggest investors in most of the bailed-out banks and existing stakes would have been diluted, according to data obtained by Bloomberg.
Despite this unbelievable conduct, management at Goldman (and AIG) continue to treat taxpayers with utter contempt while receiving additional bailout funds.