"All we did is call for the collateral that was due to us under the contracts. So I don't think there's any guilt there whatsoever." Mr. David A. Viniar, CFO of Goldman Sachs, quoted by Peter Edmonston, "Goldman Insists it Would Have Lost Little if A.I.G. Had Failed" p. B5, col. 1 (New York Times Nat'l Ed., Saturday, March 21, 2009).
Goldman Sachs in 2007 reportedly recognized that the value had gone south on Collateralized Debt Obligations underlying AIG's Credit Default Swaps or credit insurance. See id.
AIG asked Goldman Sachs to take less than 100% of the face value of the CDS's which AIG had issued. These Credit Default Swaps, for all or the most part, did not involve AIG's ultimate inability to pay its obligations, but instead involved AIG's soon-to-be-demoted credit ranking instead. In the event of a lowered credit rating, AIG would face collateral calls it could not meet.
Goldman Sachs refused. Id.
The Federal Government asked Goldman Sachs to take less than 100% -- for the good of the country, presumably. Goldman Sachs refused, again.
AIG's credit rating was lowered. Collateral calls were made by counterparties (read: "insureds" or "policyholders") under the terms of AIG's Credit Default Swaps. Goldman Sachs was one.
Goldman Sachs was paid 100% of the face value of the AIG CDS's in question. With Federal Taxpayer Money. The total payment of these AIG CDS's to Goldman Sachs alone is a reported $12.9 Billion. Id.
Goldman Sachs in addition has received more Monies from the Federal Treasury as a part of the overall Bailout, separate and apart from the $12.9 Billion Goldman Sachs received from the Federal Taxpayers by way of their monies that were given to AIG. Id.
More to come? Goldman Sachs holds insurance totaling another $4,400,000,000.00 in cash collateral on more "complex securities" insured by AIG and valued (by an unknown, unidentified someone) at "about $6 billion". See Christine Harper, "Goldman Sachs Still Has $6 Billion in AIG Exposure (Update 1)" (Bloomberg.com, Friday, March 20, 2009).
Nothing personal, it's business. Business as usual, no matter what. As this post began, so it shall end.
"All we did is call for the collateral that was due to us under the contracts. So I don't think there's any guilt there whatsoever." Mr. David A. Viniar, CFO of Goldman Sachs, quoted by Peter Edmonston, "Goldman Insists it Would Have Lost Little if A.I.G. Had Failed" p. B5, col. 1 (New York Times Nat'l Ed., Saturday, March 21, 2009).
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