Don't buy the assertions that banks like Goldman Sachs would have survived the financial crisis without a taxpayer bailout.
According to Too Big To Fail author and New York Times scribe Andrew Ross Sorkin, who sat down with Newsmax TV recently, the world was dangerously close to the "financial abyss" last fall. So close, in fact, that both Morgan Stanley and Goldman Sachs were very close to going belly up, Sorkin argues.
After Lehman Brothers collapsed, Sorkin says, there was a widespread fear on Wall Street that Morgan Stanley would be the next to go under. Goldman Sachs CEO Lloyd Blankfein was reportedly so spooked that he called up Morgan Stanley chief John Mack and urged him to "hang on, because I'm thirty seconds behind you."
Sorkin says that Hank Paulson, who was Treasury Secretary at the time, and then-New York Fed President Timothy Geithner -- nicknamed "e-harmony" for his matchmaking efforts -- spent the weekend brainstorming potential mergers for the vulnerable banks. One possibility called for the absorption of Goldman Sachs by Citigroup; another for the marriage of Morgan Stanley to JPMorgan.
At the time, Sorkin added, policymakers feared that if major financial institutions continued to domino into bankruptcy, even non-financial corporations like General Electric could be vulnerable.
WATCH Sorkin's interview: