Predicting the Meltdown

" Today we learned that Goldman Sachs made a fortune before the recession of October 2008 by anticipating that collapse of the housing market. Long before it happened. Now in its management of its own money and its clients' money Goldman Sachs has an obligation. To buy low sell high and anticipate losses. It it did so three from fraud there is no wrong here in fact if there was no fraud. Goldman should be praised for accurately anticipating what was about to happen. On the other hand -- Goldman represented securities as sound and solid that it knew or should have known were not. Then it committed fraud and it could be exposed to criminal and most certainly several liability. And of Goldman's dealings -- of the housing bubble to burst what now well now we've learned that CIT the large factor in house. It's going into bankruptcy. But it has agreed to pay one of its creditors in advance you guessed it Goldman ahead of all of the other creditors. Will Goldman get a billion dollars back from CIT. Even though it apparently never told the treasury. Which alone Goldman billions about this are you confused. Joining me now to discuss all of this is the co host of Fox Business -- happy hour."

" Cody Willard I thought of your personal welcome to prevent -- we've always a pleasure to interview this morning. As soon as I read this because you when I talked many many times about the chicanery of Hank Paulson as Treasury Secretary the former. Chairman of Goldman and of the manner in which the goal of the federal government has -- Goldman out so a couple of questions one. Did Goldman as far as you can tell. Anticipate the housing bubble by selling. Mortgage backed securities well in advance is there evidence of that and if it did so was -- fraud involved didn't know that these things it was selling worthless."

" I think so I mean on the one hand well into 2007. Non. 2008. Goldman was packaging those derivative type of products and selling them to investors around the world. At the same time as they are selling those products to other people to invest in Goldman's own proprietary capital many different -- had. Again it's fungible with many different facets of the company. They were out there policing outsized bets. On the idea that the economy would collapse when you hear that Goldman got twelve billion dollars. Straight through AIG and by the way who orchestrated the AIG bailout. Not Hank Paulson but another former head of Goldman Sachs Stephen Friedman who -- ahead of the New York fed at that time. In cahoots with. Treasury Secretary. Geithner point being that when they are -- Goldman got twelve billion dollars through the AIG reality that we the first twelve billion of the eighty. Five billion in federal dollars that went to bail out AIG went to go correct -- so you tell me what was why go why -- Goldman owed twelve billion dollars from AIG. Goldman placed twelve billion dollars worth -- that housing would collapse. As Goldman was on the other hand out of the other -- selling those very derivatives and very products to other investors."

" Now we learn that this enormous factory has CIT. Which is headquartered in the very building and which received in the island and in which we work. Is about to go bankrupt and it's part of what's called -- prepackaged. Bankruptcy that's where they get together with creditors and debtors and the court. And decide ahead of time how everything is gonna be paid out won't be all I can't imagine a Prodi will it surprised -- But sex is getting the first. What is it about Goldman. That they are able to manipulate their way to triumph. With federal money without or for all of these crises in situation."

" So he's a I think Goldman's trading off of inside information a lot of the time the last three or six months and we see that they're trading profits each quarter have been through the roof. We know that they -- every day -- CEO and other heads inside of Goldman are talking to the treasury talking to the Federal Reserve. And are able to know what the Federal Reserve is going to actually be doing in the markets before the -- before the Federal Reserve is doing. I think there's clear front running happening comes from Goldman Sachs. By Goldman Sachs in those cases but the answer your question. When you're looking at in this case this is six months before TARP build out CIT settlement before and CAT recognized that they were insolvent. They needed some cash seriously they went Goldman Sachs and ask for a loan from Goldman Sachs. Goldman Sachs but very onerous terms on that loan and guaranteed that. Made of write me a contract with CIT that's that if you guys go bankrupt before you pay us back we get one billion dollars out right. Goldman Sachs then -- bottom bunch derivatives from AIG Bear Stearns Morgan Stanley a bunch of other companies that would be insolvent without taxpayer money to pay off the -- They Goldman Sachs placed and they are indeed profiting. Before anybody else both almost derivatives which are only paid because the companies that wrote them were bailed out. And -- the actual CIT before taxpayer gets any of the two billion dollars that we went CIT and taller. Goldman gets a billion dollars I."

" They thought I'd thought of you this morning on the radio show that I issue with rank -- and we had John McCain. And after he's talking about how the government is to being the government is too fat on the stimulus is the -- on the government isn't everybody's face incentives senator. You having second thoughts about voting in favor of the TARP thank you for asking him and love your campaign last year. Thank no I did it because that we just my president my secretary of the treasury asked me to it's as if the big government Republicans have learned nothing."

" You know -- and the fact that Republicans like John McCain can sit there and look you in the eyes and say listen the a -- not beat the guys who connected behind closed doors told me I had to send them billions of dollars and it was for the good of the country and I listen to them I believed them. That tells you all you know about John McCain and Republicans and Democrats in power today."

" Cody -- so it was a pleasure thanks for joining us in freedom watch thanks don't think you can catch today's show on foxnews.com slash freedom march and serious 145 XM 168. Or online at Fox News talk dot com at 6 PM eastern Saturdays from New York defending freedom. Until the next times -- free America."