Henry Paulson ran Goldman Sachs, when the investment bank originated massive numbers of the collateralized debt obligations (CDOs) that have brought the banking system to its knees. When the CDOs went bust, Goldman Sachs was not holding the CDOs. Goldman Sachs remains a highly profitable investment bank.
The CDOs would be subject to buy-back at face value if they were proven fraudulent, which they most certainly would be in court. Goldman knew the CDOs were toxic, as is evidenced by the fact that they were not holding them when they went bust. This would come out in discovery. Paulson would be under oath. A buy-back would bankrupt Goldman and subject it’s leaders to personal legal liability. Possibly criminal.
Paulson was installed as Treasury Secretary around the time that the nature of the CDOs was discovered. He was installed, in my opinion, to prevent the lawsuits. If the taxpayers picked up the tab, Goldman would not be sued by the other investment banks. That’s the deal as far as I can tell.
If the man is successful, he may end up taking down the global economy. Which may or may not be a good thing.
Henry M. Paulson.