Back in the summer of 2008, as the financial system teetered on the edge of collapse, no one knew what would happen to the debt-laden mortgage giants Fannie Mae and Freddie Mac—would they be allowed to go under, or would the government come to their rescue? What would become of the shareholders? Trillions rested on the answers to those questions. Oh wait, someone did know. Treasury Secretary Hank Paulson. And he told his hedge fund pals and former Goldman Sachs colleagues. He just didn't tell you. Because, really—who the fuck are you?

Hank Paulson's attempt to weasel out of an interview with the New York Times looks more comical every day. Now it's emerged that the book he was busy writing is being written by someone else.

The New York Times ran a big story last weekend about Hank Paulson's contacts with Goldman Sachs, but they couldn't get a quote from Paulson because he was too busy writing his memoirs. Really? No, not really.

Looks like those clever backdoor bailouts orchestrated by the plethora of carefully placed henchman throughout the highest levels of government has paid off—Goldman Sachs will pay out the biggest bonuses in its history after a "spectacular first half."

• BlackRock has reached a deal to buy Barclays Global Investors for $13.5 billion, making BlackRock the world's largest money management firm. [WSJ]
• Lawmakers grilled Bank of America chief Ken Lewis in Capitol Hill yesterday, although he defended his decision to go ahead with the acquisition of Merrill Lynch and placed blame on Ben Bernanke and Hank Paulson. [NYT, WSJ]
• John Paulson's hedge fund, which made $3+ billion betting the housing market would collapse, is now scooping up lots of distressed debt. [BN]
• Goldman was an investment bank before becoming a commercial bank. Now that it's free from the bailout, it may go back to being an I-bank. [Reuters]
• US households lost $1.33 trillion of wealth in the first 3 months of '09. [DB]
• Foreclosures fell during May, not that things have improved much. [CNN]

• AIG's Ed Liddy now says the company will need three to five years to carry out its restructuring plan and repay taxpayer bailout money. [NYT]
• Hedge funds actually saw returns rise more than three percent in April. [DB]
• Walter Noel's Fairfield Greenwich hedge fund is no more. The disgraced firm is handing over its remaining $2.5 billion to Sciens Capital. [NYP]
• The rich get richer: As financial firms raise capital and pay back TARP money, it's Goldman, Morgan Stanley and JPMorgan that are profiting. [Fortune]

• After a two-month wait, the nation's 19 largest banks will start to hear today how they did on those stress tests conducted by Washington regulators. [NYT]
• If the test indicates Citigroup will need more money to stay afloat, Vikram Pandit can probably kiss his job as the bank's CEO goodbye. [NYP]
• Andrew Cuomo is urging federal regulators to investigate allegations that Hank Paulson and Ben Bernanke applied pressure to Bank of America chief Ken Lewis to go ahead with the acquisition of Merrill Lynch. [WSJ, NYT, CNN]
• Chrysler is preparing to file for Chapter 11 as soon as next week. [WSJ]

• Bank of America CEO Ken Lewis testified under oath that Fed chairman Ben Bernanke and former Treasury Secretary Hank Paulson pressured him to keep quiet about BofA's plans to buy Merrill Lynch. [WSJ, CNN]
• Credit Suisse reported a profit of $1.7 billion for the first quarter. [BN]
• Executives from a bunch of credit card companies will face off against President Obama today over possible limits on fees and interest rates. [BN]

Remember Neel Kashkari, the government's workaholic bailout czar? We're guessing his job overseeing the nation's finances isn't keeping him that busy. He had time to return to his high school and give a speech!

• A half-dozen bidders have emerged for AIG's asset management unit, although efforts to sell it have been "complicated," not surprisingly. [WSJ]
• Congressman Dennis Kucinich has asked the SEC to determine if Bank of America violated the law by not disclosing Merrill Lynch's bonus plan. [DB]
• GM is speeding up preparations for a possible bankruptcy filing. [BN]
• Quadrangle Group has halted fundraising for its next fund. [Crains]
• The Tokyo office of Merrill Lynch Global Private Equity has been closed. [DB]
• RBS may eliminate an additional 9,000 jobs. [BN]
• It's never been a better time for a hostile takeover. [NYP]
• What's Hank Paulson doing with his money these days? He's backing his son's effort to bring Major League Soccer to Portland, Oregon, that's what. [BN]

We heard Hank Paulson will give you $25 billion if you come up with a name for his upcoming book (and you are a former Goldman guy). So let's all pitch in!

Mariah Carey turns 39 today. Quentin Tarantino is turning 46. Fergie is 34. Dance Theatre of Harlem founder Arthur Mitchell turns 75. British actor Michael York is 67. Wall Street Journal tech columnist Walt Mossberg is 62. Nancy Peretsman, investment banker to Oprah and Martha, is 55. And Talisa Soto, former model and current wife of actor Benjamin Bratt, turns 42 today. Weekend birthdays follow below.

If you're outraged about the current state of the economy and you need an outlet for your anger, you may want to catch a bus to Boston instead of taking one to visit the homes of AIG executives. Just a few of the names in the press these days who happen to be graduates of Harvard Business School: Former Merrill Lynch chiefs Stan O'Neal and John Thain, former treasury secretaries Bob Rubin and Hank Paulson, General Motors CEO Rick Wagoner, and Bernie Madoff enabler Ezra Merkin. [Clusterstock]

The New Depression rolls on and those overpaid AIG failures are this week's target for populist wrath. But do you hate them more than last week's villains? Embrace your hate and vote in our poll.

• The AIG mess rolls on. Lawmakers are up in arms. Voters are pissed. Tim Geithner is on the defensive. President Obama's agenda has been disrupted. And AIG chief Ed Liddy will get to see some of the emotion first hand when he turns up on Capitol Hill later today to face the music. [NYT, WSJ, BN]
• Billions used to bail out AIG may end up benefiting the hedge funds that made big bets that the housing market was going to crumble. [WSJ]
• As the pressure mounts on Tim Geithner, here's a roundup of all the things he's gotten wrong, just in case you need a little refresher. [BI]
• The State of New Jersey has filed suit against Lehman for fraud. [CNN]
• Citigroup's chief economist is leaving the bank to take a senior position at the Treasury Department. Somehow this is entirely fitting. [DBK]
• The fact that Citi has four new board members may not bode well for Vikram Pandit and his chances of remaining in charge of the bank. [NYP]
• Warren Buffett owns 20% of Moody's, so when he talks about the broken financial system, you won't hear him talk much about rating agencies. [NYT]
• In the FT, Hank Paulson says it's time to reform the financial system. Thanks for sharing. And thanks for coming to that conclusion just now. [FT]

• Some 3.6 million jobs have now been lost due to the recession. [WSJ]
• BofA chief Ken Lewis purchased 200,000 shares of the bank this week in an effort to convince the world he's bullish about BofA's future. [WSJ]
• Good work, Hank. The Treasury Department overpaid by about $78 billion when it handed over all that cash to big banks last year. [Reuters]
• A hedge fund manager, a brokerage trader and a financial adviser were charged on Thursday for taking part in an insider trading scheme. [DB]
• The feds have also accused two people in the M&A groups at UBS and the Blackstone Group of handing over info to an insider trading ring. [NYP]
• Fraud investigator Harry Markopolos, who testified on Capitol Hill yesterday, says he's turned over evidence of several other big frauds to the SEC. [CNN]
• The markets have been up amid speculation the grim unemployment numbers will force Congress to pass an economic stimulus package. [BN]

Men with unusually long ring fingers are more likely to be either a successful stock trader, or gay. So what does that tell us about the government's wise men patching up the economy?

♦ Stocks are poised to move higher today after yesterday's bloodbath. [CNN]
♦ Goldman Sachs may report a loss of as much as $5 billion this quarter, the firm's first quarterly loss since it went public in 1999. [WSJ]
♦ Credit Suisse and HSBC have announced another round of job cuts. [Reuters]
♦ Highbridge Capital, founded by Glenn Dubin and Henry Swieca and owned by JPMorgan, is the latest hedge to suffer a fall. More than a third of its investors are looking to withdraw cash and the flagship fund is down 25%. [WSJ]
♦ One hedge funder doing fine: John Paulson. His firm has already cleared profits of more than $1 billion this year betting that the housing market would crumble and banks would fail. [Bloomberg]
♦ What does the head of a new Congressional panel set up to monitor the bailout have to say about Hank Paulson's strategy? That it does appear Paulson has a strategy. [NYT]

At last night's opening night party for the New York City Ballet's David H. Koch Theater, guest of honor David Koch and wife Julia mingled with Candace Bushnell, Sarah Jessica Parker, Alicia Keys, Al Roker, Debbie Bancroft, Lisa Falcone, Mary Alice Stephenson, Alexandra Lebenthal, Zani Gugelmann, Annie Churchill, Peter Martins, Veronica Webb, Mark Indelicato, Blythe Danner, Valentino, Rachel Roy, Derek Lam, Peter Som, and Vanessa Williams, who all ate, drank, and danced to inaugurate the new Lincoln Center venue. [Wireimage, PMc, Style.com]

We're not sure if this is a sign that the bailout is doomed, or just a signal that Treasury Secretary Hank Paulson really is contemplating endorsement deals to revive the economy, but this morning Bloomberg News squeezed a brand name in the headline of a story about the frantic, behind-the-scenes work involved in rescuing Citigroup this past weekend: "Citigroup's $306 Billion Rescue Fueled by Pizza From Domino's."