Why did Goldman thought it was necessary to take out protection against investment-grade mortgage securities it was selling by purchasing insurance-like contracts known as credit-default swaps. FCIC Commission chair Phil Angelides likened it to selling a car with knowledge it had faulty brakes and then taking out an insurance policy on the buyer.
“There seems an unwritten premise that Wall Street, exactly how it exists today, is necessary for the economy to work. That’s not true. … Wall Street has done an incredible job at pulling the wool over the eyes of the American people.”