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Is it GS fault that AIG was doing securities that it couldn't collateralize? No.. why does GS care. Yes the government could have forced them to eat their los
by vlod 17y ago
Is it GS fault that AIG was doing securities that it couldn't collateralize? No.. why does GS care.
Yes the government could have forced them to eat their losses, but the point of the bailout was to stabilize the market. The government didn't want anyone (not just GS) to lose money, as that would have caused a cascade effect. (In their mind)
I think your suggesting (as far as I can tell) is that GS forced the government to give out money (through their political connections).
I really don't think that's true. I think the government was super concerned (and super scared) that the flow of money would stop and the whole US economy would fall. Not just investment banks but everything.
- deleted 17y ago[deleted]
- codexon 17y agoI think your suggesting (as far as I can tell) is that GS forced the government to give out money (through their political connections). This is very much the case. To open an account at Goldman Sachs, you must invest at least $10 million. Averages Joes are not investing with Goldman Sachs. If they wanted to stabilize the market, the government could have chosen to invest it in banks that did not overextend themselves, or to directly purchase toxic assets instead of doing it through a middleman: letting GS skim a profit. Instead, they predictably saved the assets of the super rich instead of mainstreet America.