Hank Paulson and the Government Sachs.

Treasury faces, from left: Steve Shafran (formerly of Goldman), Kendrick Wilson III (formerly of Goldman), Henry Paulson Jr. (former Treasury Secretary), Edward Forst (another Goldman vet and adviser to Paulson) and Neel Kashkari (Goldman and played main role in the emergency sale of Bear Stearns to JPMorgan Chase last year).

Written by Biloxi

Amazing how Goldman Sachs, an investment firm, that had more subprime loans than other banks such as JP Morgan Chase, Bank of America, and so on would be one of the surviving investment banks in this financial crisis thanks to the former CEO of Goldman and then Treasury Secretary Hank Paulson.

And thanks to Joshua B. Bolten, a former Goldman executive and former chief of staff under former President Bush, helped recruit Paulson to the Treasury Secretary post in 2006. With friends like that, who needs enemies?

In January of this year, Congress's oversight panel for the TARP funds confirmed in a report that Paulson's Treasury Department essentially had no clue what banks have done with the substantial sums they've been handed. Congress nor the media never asked those questions to why the then Treasury Secretary and former Goldman CEO wasn't minding the store.

And I saw this piece of information from the NY Times that needs to be explore:

Former Lehman Brothers CEO Richard S. Fuld Jr. begged to the regulators to turn his investment bank into a bank holding company This would had allowed the company to receive constant access to federal funding. But, Timothy F. Geithner, former president of the Federal Reserve Bank of New York and now current Treasury Secretary told Fuld at the time no due to the ongoing investigation into Lehman. Lehman later filed for bankruptcy in mid-September of last year.

One week later after Lehman's bankruptcy, Goldman and Morgan Stanley were designated bank holding companies. Read Federal Reserve Bank statement on September 21, 2008.

Former senior Lehman exec said: “That was our idea three months ago, and they wouldn’t let us do it,” said a former senior Lehman executive who requested anonymity because he was not authorized to comment publicly. “But when Goldman got in trouble, they did it right away. No one could believe it.”

Was Goldman Sachs positioning itself to be a bank holding company? After all, Goldman and Morgan Stanley were the last two independent investment banks. On September 16, 2008, Federal Reserve Bank approved of 85 billion for a bailout for failing company AIG. According to Federal Reserve board minutes, [click here], that Goldman and Morgan Stanley submitted applications to be bank holding companies on September 19,2008:

Participating in these determinations and voting for these actions:


Chairman Bernanke, Vice Chairman Kohn, and
Governors Warsh, Kroszner, and Duke.


Background:


Implementation: Resolution, press releases, and Federal Register documents
(Docket Nos. R-1331 and R-1332), September 19, 2008.


GOLDMAN SACHS, MORGAN STANLEY, and MERRILL LYNCH -- Applications by
Goldman Sachs and Morgan Stanley to become bank holding companies and
authorizations to increase liquidity support for certain securities subsidiaries of
Goldman Sachs, Morgan Stanley, and Merrill Lynch.

Discussed.
Approved.
Issuance of orders authorized.
September 21, 2008.

Too many pitchforks out for Geithner since he was the former NY Federal Reserve Bank President involved in the failed banks in the financial crisis and not enough focus on the decision maker and overseer of the failing banks. And since Ben Bernanke was Geithner's boss at the time, Bernanke warned Paulson that of the funding differculties of AIG and recommended Congress to control the financial crisis of the failing bank. But, in the end, Congress gave Paulson control of the TARP funds and stabilize the financial crisis while Goldman Sachs became a bank holding company. What are the advantages of being a bank holding company? Gave Goldman easier access to credit, gain access to liquidity and funding, and help them survive the financial crisis. More importantly, bank holding company is broadly defined as any company that has control over a bank. And that is what Goldman Sachs wanted: control. Goldman Sachs becomes one of the most powerful investment firms as well as a bank holding company bankrolled by a former CEO of Goldman and former Treasury Secretary. As the actor Michael Douglas in the movie, "Wall Street" said it best: "Greed is Good."