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September 20, 2018

Goldman Sachs Failed 10 Years Ago Today

Thursday, September 20, 2018
Contact: Nick Jacobs, 202-618-6430 or


Email shows Goldman admitted it was “toast” and only survived due to government bailouts


Washington, D.C. – On the tenth anniversary of Morgan Stanley and Goldman Sachs failing on Friday, September 20, 2008, Dennis Kelleher, President and CEO of Better Markets, issued the following statement:

“Goldman Sachs has relentlessly tried to rewrite the history of the 2008 crash, pretending that it was never at risk of failure.  That is simply false.  As proved by an email from ten years ago (reproduced below), Goldman Sachs was ‘toast’ and would have gone bankrupt but for being bailed out by the United States government and taxpayers.  Those bailouts saved the bank and the jobs, status and wealth of all the Goldman bankers.  For example, the astronomical wealth of CEO Lloyd Blankfein, former President Gary Cohn and all the other Goldman partners only exists today because they were bailed out.  Just like the shareholders in bankrupt Lehman Brothers, their stock and options would have been worthless, including the recently reported $3 billion ‘Goldman partners’ haul on crisis-era options.

“We know this because, ten years ago today, just five days after Lehman Brothers filed for bankruptcy, four days after the $85 billion bailout of AIG, and days after Treasury Secretary Paulson effectively nationalized the $3.7 trillion money market industry via a guaranty program, Morgan Stanley called New York Fed President Tim Geithner to inform him that it would not be able to open its doors on Monday and Goldman admitted that, if that happened, it was ‘toast,’ as reflect in an internal Fed email (reproduced below).

“While many are remembering the 10th anniversary of the collapse of Lehman Brothers and the onset of the worse financial crash since 1929, there is too much spin, self-congratulation and omission or denial of the actual facts.  As we have detailed, the crash had many causes, but a big one was the reckless and illegal activities of Wall Street’s too-big-to-fail firms, which were nonetheless bailed out without any accountability.  On this 10th anniversary, it is important to remember that Goldman Sachs and the other too-big-to-fail financial firms only exist today due to the generosity and decisive role of the U.S. government and taxpayers in stopping the crisis and saving those Wall Street giants with trillions of dollars in bailouts.  False narratives, forgetting or ignoring those facts and so many others may be comforting to those on Wall Street and their allies, but it blinds them to what is happening in the country and why.”

This email was from Michael Silva who was the chief of staff and senior vice president for the Executive Group at the New York Fed, and relates to a phone call from Morgan Stanley (MS) to Timothy F. Geithner (TFG), then President of the Federal Reserve Bank of New York, about it and Goldman Sachs (GS). 




Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit

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