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They wouldn't have survived? Based on what evidence? They had already liquidated the majority of their bad debt and hedged away more of the risk onto their own
by wheaties 12y ago
They wouldn't have survived? Based on what evidence? They had already liquidated the majority of their bad debt and hedged away more of the risk onto their own clients by the time TARP came around.
- autokad 12y agogoldman bought tons of insurance on bad loans (loans it didnt own). it was gambling they would go bad, but part of that gamble was that the issuer (AIG for example) could pay up. they couldnt, until the government stepped in and made sure that 100 cents to the dollar was paid on those gambling notes. without that, goldman would have failed
- inthewoods 12y agoThe key question is why it was at 100 cents on the dollar - most cases would have required a haircut.