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If what you say is true, and Goldman hedged their hedge by purchasing CDS on AIG and/or outright shorting them, it should be trivial for a prosecutor to show th
by gills 18y ago
If what you say is true, and Goldman hedged their hedge by purchasing CDS on AIG and/or outright shorting them, it should be trivial for a prosecutor to show that they entered a contract with AIG knowing fully that it could never be satisfied (who knows, there may even be a side letter to be found somewhere to that effect...) -- making the contract void and requiring a clawback of any payment made through AIG by Treasury.
- op12 18y agoHow does purchasing CDS insurance on a counterparty imply that they knew full well it could never be satisfied? If I purchase hurricane insurance on my home do I know full well a hurricane is going to destroy my house? It was a precautionary measure for an amount that was the difference between what they were owed and how much collateral was pledged. It indicates nothing of the sort that they knew full well the world was going to blow up and AIG would default And what I say is true, there are many many public disclosures on exactly what their positions were.