No doubt they benefited from the bailout, but having exposure to the web of CDS does not mean they were the main culprit that caused the problem. None of this would have mattered if the housing/subprime market hasn't fell off a cliff.
No. I think it will be a good idea if a third party (e.g. the government) is holding the collateral of any deal. The reason why we are in this mess is because AIG were writing CDSes without the collateral to back it up. So basically they were making money out of thin air and part of the "profits" lined AIG execs' pockets.
Sure does help when your Program Trading can manipulate a market. Someone stole the code to their program and this statement is just about an admission that their program can manipulate the markets in unfair ways. So with the admitted ability to manipulate markets, with all the money we gave to AIG that in turn gave to Goldman, and then with all the money they are able to get from changing their status to a "Bank" to get TARP money. Along with the former Treasury Secretary, Hank Paulson, being a former CEO of Goldman and the current Treasury Secretary, Tim Geithner, having been accused of being "too close to Goldman" even before he was nominated as the Treasury Secretary it's no wonder they are making records amount of money and giving out records amount of bonuses to their employees. http://www.bloomberg.com/apps/news?pid=20601087&sid=axYw_ykTBokE
AIG was leveraged 11-1 and had no possible way of paying the CDS mess. If AIG had been dissolved and liquidated in bankruptcy it would have triggered the armegeddon chain reation that Hank Paulson crapped his pants over when he said "In a week's time, there will be no financial system left for us to salvage." Honestly, the fat cats GS, Barclay, Societe Generale, BOA, and Citigroup should all payback the money to the government on behalf of AIG. Without that bailout, many of these companies would be bankrupt right now. So to Goldman, I say good you made a ton of cash now give it back to the taxpayers who saved your ass both directly and indirectly through AIG.
They wouldn't hedge with one single counterparty, they can hedge with many different counterparties and different instruments. From the WSJ on March 21, 2009: "Goldman Sachs Group Inc. still has $6 billion in trading bets outstanding with American International Group Inc. but had adequately protected itself from problems at the insurer before AIG nearly collapsed last fall, according to a senior executive. In a conference call Friday, Goldman Chief Financial Officer David Viniar described how the bank took steps to hedge its exposure to the insurer from July 2007 through late 2008. Goldman pried billions in cash collateral from AIG and bought large amounts of credit derivatives that would pay out if AIG defaulted on its obligations or filed for bankruptcy, he said."
Yes! The American taxpayer needed the profit on this TARP repayment, because AIG is insolvent. We won't get a dime back from AIG.
so we give them 13 and they give us 1 back for a good gesture. How come I can't get that deal with the government.
No. We gave Goldman 10 billion...and they paid back 11.418 billion. The taxpayers got 23% on their money in 9 months. Would you prefer they lose your money????
23% interest loans are pretty readily available if you really want one. They are called credit cards.
After seeing many of his posts, you got to realize he is joking. He knows the government got a 23% return. He's not that dumb.
No you just don't understand how you got robbed. GS got 13 bil from AIG. AIG got all its money from the government, therefore 13bil went from tax payer through AIG to GS. But you will think we got a great return on our taxpayer investment while GS is robbing us blind. I couldn't get past the 1st round of the GS interviews so I am clearly not as smart those guys, but I wish I was.
Because GS collected money on a legal contract, therefore they must have being robing people. Using this logic, all the GM's suppliers must be robing us as well since we bailed out GM. So you'd rather GS not pay the interest back then?
Saw these on Taibbi's blog. Thought it was entertaining. <object width="425" height="344"><param name="movie" value="http://www.youtube.com/v/VSwWy4E6I04&hl=en&fs=1&"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/VSwWy4E6I04&hl=en&fs=1&" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="425" height="344"></embed></object> Elliot Spitzer is more coherent. <object width="320" height="303"><param name="movie" value="http://eplayer.clipsyndicate.com/cs_api/get_swf/2/&va_id=1019966&wpid=0&csEnv=p"></param><param name="allowfullscreen" value="true"></param><embed src="http://eplayer.clipsyndicate.com/cs_api/get_swf/2/&va_id=1019966&wpid=0&csEnv=p" type="application/x-shockwave-flash" allowfullscreen="true" width="320" height="303"></embed></object>
