WATCH LIVE: AIG Execs Including Joseph Cassano Testify Before Financial Crisis Commission (Happening Now)

Video:  The Role of Derivatives in the Financial Crisis -- FCIC Hearing on AIG & Goldman Sachs -- Happening Live

I figured out an alternative way to embed the video so you can watch it here -- just click play above.  Joe Cassano and Martin Sullivan are testifying now.

• Hearing Schedule (includes prepared statements from everyone)

• Statement from Joseph J. Cassano

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The Financial Crisis Inquiry Commission has begun a two-day hearing on The Role of Derivatives in the Financial Crisis.  They will hear testimony from current and former executives from AIG and Goldman Sachs including former AIG executive Joseph Cassano and Goldman Sachs President Gary Cohn.

The congressionally appointed panel is looking into the ties between the two companies and how their derivatives transactions may have contributed to the financial crisis.

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Related links:

• Daily Bail archive of Joe Cassano stories

• In U.S. Bailout of A.I.G., Forgiveness for Big Banks (Brand New NYT Article)

• Goldman admits it had bigger role in AIG deals (NEW McClatchy Investigation)

• Goldman makes nice with financial crisis panel

• Cassano emerges from the shadows to offer defense (Reuters)

• Reuters LIVE BLOGGING the hearings

• Goldman's Cohn Is Next on Hot Seat (WSJ Hearing Preview)

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More stories in comments below.

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[DailyBail]

When the government began rescuing it from collapse in the fall of 2008 with what has become a $182 billion lifeline, A.I.G. was required to forfeit its right to sue several banks — including Goldman, Société Générale, Deutsche Bank and Merrill Lynch — over any irregularities with most of the mortgage securities it insured in the precrisis years.

But after the Securities and Exchange Commission’s civil fraud suit filed in April against Goldman for possibly misrepresenting a mortgage deal to investors, A.I.G. executives and shareholders are asking whether A.I.G. may have been misled by Goldman into insuring mortgage deals that the bank and others may have known were flawed.

This month, an Australian hedge fund sued Goldman on similar grounds. Goldman is contesting the suit and denies any wrongdoing. A spokesman for A.I.G. declined to comment about any plans to sue Goldman or any other banks with which it worked. A Goldman spokesman said that his firm believed that “all aspects of our relationship with A.I.G. were appropriate.”

http://www.nytimes.com/2010/06/30/business/30aig.html?partner=rss&emc=rss

[DailyBail]

It’s pretty hard to make AIG a sympathetic character, but that’s the tone of this article, although it really is a commentary on the failure of the regulators, particularly the NY Federal Reserve Bank. We already knew that the NY Fed refused to give a haircut to the counter-parties owed money by AIG, paying them off instead at par. With Goldman Sachs, in particular, admitting this morning that they had a larger role in the AIG deals, including betting against the housing market on its own account and not on behalf of clients, this hearing should be explosive.

But in a way, that’s the problem. The FCIC has no real purpose, especially with the Dodd-Frank bill poised for passage in a matter of days. Their report won’t be coming out until December 15, and even then it will offer no recommendations, just “a public record of the historic event.” This makes the FCIC seem like a waste of time, despite the impressive roster of witnesses to which it has spoken in public. Today, they’ll add the mercurial Joseph Cassano to the list. I just wish they could do something with all this knowledge besides write a report that nobody will read.

http://news.firedoglake.com/2010/06/30/aigs-joseph-cassano-testifies-before-fcic-today/

[DailyBail]

Cassano Defends AIG Swaps, Lewis Says `We Were Wrong'

http://www.bloomberg.com/news/2010-06-30/cassano-defends-aig-s-swap-deals-as-lewis-says-at-hearing-we-were-wrong-.html

[DailyBail]

The Role of Derivatives in the Financial Crisis

http://www.fcic.gov/hearings/06-30-2010.php

[DailyBail]

For months, Goldman Sachs Group Inc. Chairman and Chief Executive Lloyd C. Blankfein has been the whipping boy for lawmakers and other critics of the securities firm's resilient paychecks, role in the credit crisis and mortgage-related bets.

Now it is Gary D. Cohn 's turn. Goldman's No. 2 executive, a longtime confidant of Mr. Blankfein, is testifying Wednesday before the Financial Crisis Inquiry Commission. The congressional panel wants to know more about how derivatives fueled the crisis, including the near-collapse of insurer American International Group Inc.

http://online.wsj.com/article/SB10001424052748703374104575337180461840038.html?mod=WSJEUROPE_hpp_LEFTTopWhatNews

[DailyBail]

Yes, AIG FP Took On Quite A lot Of CDS Protection But We Didn't Cause The Crisis

http://www.businessinsider.com/cassano-fcic-testimony-2010-6#ixzz0sMN2zrXb

[DailyBail]

Anyone else watching these hearings...just sent the story to clusterstock so hopefully that will bring some viewers...

[DailyBail]

WASHINGTON — Reversing its oft-repeated position that it was acting only on behalf of its clients in its exotic dealings with the American International Group, Goldman Sachs now says that it also used its own money to make secret wagers against the U.S. housing market.

A senior Goldman executive disclosed the "bilateral" wagers on subprime mortgages in an interview with McClatchy, marking the first time that the Wall Street titan has conceded that its dealings with troubled insurer AIG went far beyond acting as an "intermediary" responding to its clients' demands.

The official, who Goldman made available to McClatchy on the condition he remain anonymous, declined to reveal how much money Goldman reaped from its trades with AIG.

However, the wagers were part of a package of deals that had a face value of $3 billion, and in a recent settlement, AIG agreed to pay Goldman between $1.5 billion and $2 billion. AIG's losses on those deals, for which Goldman is thought to have paid less than $10 million, were ultimately borne by taxpayers as part of the government's bailout of the insurer.

http://www.mcclatchydc.com/2010/06/29/96779/goldman-admits-it-had-bigger-role.html#ixzz0sMNaZIwb