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Except Goldman didn't eat the remainder. They told the government to bailout AIG, and AIG used that money to pay 100% of their obligations to Goldman Sachs. Ho
by codexon 17y ago
Except Goldman didn't eat the remainder. They told the government to bailout AIG, and AIG used that money to pay 100% of their obligations to Goldman Sachs.
However, note that the folks selling the insurance in these cases included pension funds, small cities in Australia, and the like. I'm perfectly happy with them losing everything (especially since the alternative is US taxpayers paying to make Goldman whole), but are you?
Yup. My investment in GS is 0 and I live in the US.
- anamax 17y agoRight about now, someone is typing that the AIG pass-through wasn't a subsidy/payoff to Goldman because Goldman was owed that money and had bought "insurance" from third parties. My response to that argument should be obvious.
- codexon 17y agoAccording to what authority? Just because you can buy insurance on debt both parties don't even own (simply ridiculous), doesn't mean that the contract wasn't between AIG and Goldman. Every news article and writeup has said that there were many CDOs between AIG and Goldman. http://www.reuters.com/article/newsOne/idUSN1548789520090316 http://www.reuters.com/article/newsOne/idUSN1548789520090316
- anamax 17y agoHey - I didn't say that I agreed with the argument. I even implied that I strongly disagreed. I just pointed out that there are folks who make that argument whenever someone says that the govt covered Goldman's potential losses.
- codexon 17y agoWell you'll have to excuse me because I haven't heard that one before.