Mind Over Market

On December 9, C-Span's Washington Journal interviewed Janet Tavakoli, a Chicago-based structured finance analyst. She was in Washington to attend a conference sponsored by the Federal Housing Finance Administration. She talked about Fannie Mae, Freddie Mac, private label mortgage-backed securities, Wall Street fraud, and derivatives. See the entire 39:43 minute interview at this link: http://www.c-spanvideo.org/program/FannieMaean

Goldman Sachs was a chief potential counterparty beneficiary of AIG's federal bailout after its brush with bankruptcy in September 2008, according to structured finance analyst Janet Tavakoli. Goldman held credit default swaps with AIG against toxic derivatives it had underwritten and held. AIG was exposed to other Goldman-underwritten toxic derivatives held by other counterparties. All this was kept a secret as Goldman successfuly persuaded the Feds to pay 100 cents on the dollar for AIG's contracts, when they were worth far less in the market. By Robert Stowe England November 10, 2009 At the time AIG faced collapse in September 2008, the insurer's largest exposure was $20 billion in transaction contracts with Goldman Sachs on mortgage derivatives undewritten by Goldman. This represented one third of AIG's $62 billion in credit derivatives exposure to market pricing risk. Indeed, AIG's exposure to Goldman Sachs was the key contributor to the systemic risk posed by ...