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Wall Street Firms Tried to Take Advantage of--Each Other

The Wall Street firms weren't content to take advantage of the general public. They even tried to take advantage of the weaker of their brethren.And not in a small way. One firm would push another to within an inch of the latter's life, thereby pushing into the charity of the American taxpayer.  

The most egregious example of these was Goldman Sachs. Goldman took the financial detritous that was being manfactured by subprime mortgage originaators, and packaged them into collateralized debt obligations (CDOs). Then it forged the final link of this daisy chain by buying "default insurance" from AIG.

Now AIG isn't exactly a shrinking violet. In its dealings with the general public, it can be considered a "shark." But relative to other sharks like Goldman, it is a mark. After AIG sold the default insurance to Goldman, the latter aggressively bid down the CDOs, forcing the insure to post more collateral. Talk about biting the hand that feeds you. In real life, it would be like buying fire insuranceon your house, and then setting the house on fire to collect the insurance.

It was quite a "game." The winners would make huge profits. The losers would be pushed to the brink of failure, but be too big to fail. The American public would pick up the tab for the losses..