BECAUSE AMERICANS ARE STILL UNDER THE SPELL...

...of the Free Market Fairy, this story probably won't make a big splash but it should.

Secret AIG Document Shows Goldman Sachs Minted Most Toxic CDOs
By Richard Teitelbaum

Feb. 23 (Bloomberg) -- Representative Darrell Issa, the ranking Republican on the House Committee on Oversight and Government Reform, placed into the hearing record a five-page document itemizing the mortgage securities on which banks such as Goldman Sachs Group Inc. and Societe Generale SA had bought $62.1 billion in credit-default swaps from AIG.

The public can now see for the first time how poorly the securities performed, with losses exceeding 75 percent of their notional value in some cases. Compounding this, the document and Bloomberg data demonstrate that the banks that bought the swaps from AIG are mostly the same firms that underwrote the CDOs in the first place.