Goldman Sachs may have been able to save AIG (and $170 billion (so far) of taxpayer money). Goldman Sachs would not take a discounted price to settle trades. Then AIG fails and ex Goldman CEO and U.S. Treasury Secretary Hank Paulson bails out AIG and Goldman gets billions that they would have lost if AIG went Chapter 11. It's nice to have friends in high places. -Lou
Goldman rejected settling of AIG trades at discount
NEW YORK (MarketWatch) -- Goldman Sachs Group rejected overtures from American International Group to settle trades with the troubled insurer at a discount, instead holding the company to the letter of its contracts, the investment bank's chief financial officer said Friday.
CFO David Viniar also said that Chief Executive Lloyd Blankfein had no meetings with former Treasury Secretary Henry Paulson about AIG.
Goldman and other large firms that were counterparties to
American International Group In have come under criticism in recent weeks because a lot of the government money that was initially loaned to the insurer was paid back out to these trading partners.
AIG almost collapsed in September after credit rating downgrades made it impossible for the insurer to meet obligations on derivative-based contracts it had sold to protect against losses on complex mortgage-related securities known as collateralized debt obligations, or CDOs.
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http://www.marketwatch.com/news/story/Goldman-rejected-offers-settle-AIG/story.aspx?guid=%7bD7078A9C-86CD-482E-A977-D5FCB0A0F827%7d&print=true&dist=printMidSection
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