A goodie from the link at #16....

Note: The latest profits posted by banks aka Wells Fargo are based on listing toxic derivatives as being worth 85 cents on a dollar when they are actually worth less than half a cent.

21 posted on 04/21/2009 11:40:59 AM PDT by Ernest_at_the_Beach (Support Geert Wilders)

To: FromLori; SeekAndFind; Czar

Back to the original topic...related thread:

Goldman Sachs : Big Profits, Big Questions

22 posted on 04/21/2009 11:47:01 AM PDT by Ernest_at_the_Beach (Support Geert Wilders)

Dang... I always miss the good ones!

LLS

23 posted on 04/21/2009 12:18:16 PM PDT by LibLieSlayer (hussein will NEVER be my President... NEVER!!!)

To: All; NormsRevenge; Grampa Dave; SierraWasp; FromLori; Czar

Searching onU.S. dollar counterparty derivatives...leads to this:

**************

Who Are The AIG Counterparties? Here Are Some...

***************************EXCERPT****************************

Over at TPM, Josh has been doggedly highlighting the refusal of both AIG and the federal government to reveal the identity of AIG's counter-parties in its disastrous credit default swaps. And several lawmakers have in recent days pressed Tim Geithner and Ben Bernanke on the issue.

The question matters, of course, because AIG needed to make its most recent multi-billion dollar trip back to the public trough (that's over $160 billion in all for AIG, if you're counting) in order to pay back its creditors on those disastrous swaps -- and thereby, we're told, prevent a wider financial collapse. So identifying who those swaps were made with will tell us, in effect, who this latest portion of our money is ultimately going to.

It's worth noting, then, that, thanks to some great reporting from the Wall Street Journal and the New York Times, we do in fact have some preliminary information about who AIG's partners were on the swaps.

This Journal story from October 2008 names the following nine American and foreign banks as having bought swaps from AIG: Goldman Sachs; Merrill Lynch; UBS of Switzerland; Credit Agricole SA of France; Deutsche Bank of Germany; Barclays, and Royal Bank of Scotland Group, of Britain; and CIBC, and Bank of Montreal, of Canada.

Merrill is described by the Journal as a "big client" of the AIG unit that did the swaps.

By the end of 2007, with the value of the underlying assets plummeting, many of these banks had asked for collateral on the swaps, according to the Journal.

For instance, the paper reports that Goldman held swaps that insured about $20 billion of securities. In August 2007, Goldman demanded $1.5 billion in collateral from AIG. It ultimately got $450 million, then another $1.5 billion last October. At that point, says the Journal:

Goldman hedged its exposure by making a bearish bet on AIG, buying credit-default swaps on AIG's own debt.

That picture of Goldman's exposure jibes with a New York Times story from September 2008 about the credit default swaps, which reported that Goldman was AIG's "largest trading partner," and likewise gave a figure of $20 billion for Goldman's exposure to AIG.

The Times also implicates another domestic firm: JP Morgan (now JP Morgan Chase). In fact, it recounts that it was derivatives traders from that company that a decade ago, first brought to AIG's London-based financial products unit, run by Joseph Cassano, the ill-fated idea of doing credit default swaps.

It reports:

Ten years ago, a "watershed" moment changed the profile of the derivatives that Mr. Cassano traded, according to a transcript of comments he made at an industry event last year. Derivatives specialists from J. P. Morgan, a leading bank that had many dealings with Mr. Cassano's unit, came calling with a novel idea.
Morgan proposed the following: A.I.G. should try writing insurance on packages of debt known as "collateralized debt obligations." C.D.O.'s. were pools of loans sliced into tranches and sold to investors based on the credit quality of the underlying securities.

It's not 100 percent clear, then, that JP Morgan Chase is a current counter-party of AIG on the swaps -- but it certainly wouldn't be surprising.

That same Times story offers another hint, albeit a vague one, about the identity of the counter-parties.

While clients and counterparties remain closely guarded secrets in the derivatives trade, Mr. Cassano talked publicly about how proud he was of his customer list.
At the 2007 conference he noted that his company worked with a "global swath" of top-notch entities that included "banks and investment banks, pension funds, endowments, foundations, insurance companies, hedge funds, money managers, high-net-worth individuals, municipalities and sovereigns and supranationals."

What to make of all this? Well, here's one thing.

24 posted on 04/21/2009 12:38:13 PM PDT by Ernest_at_the_Beach (Support Geert Wilders)

From the test at post #24 just above...which would be exceedingly interesting:

Goldman hedged its exposure by making a bearish bet on AIG, buying credit-default swaps on AIG's own debt.

25 posted on 04/21/2009 12:42:36 PM PDT by Ernest_at_the_Beach (Support Geert Wilders)

To: Ernest_at_the_Beach

test....should be ...text

26 posted on 04/21/2009 12:44:44 PM PDT by Ernest_at_the_Beach (Support Geert Wilders)

To: Ernest_at_the_Beach

I was reading some of Armstrong’s stuff the other day on a recommendation from Jim Sinclair. ( www.jsmineset.com )

Armstrong’s a fascinating character.

27 posted on 04/21/2009 1:59:17 PM PDT by ovrtaxt (We are not to expect to be translated from despotism to liberty in a feather bed. -Jefferson)

This is the #1 read piece on the Marketwatch website at the moment...and pulled this out of the comments section:

Government Sachs is in control

**********************EXCERPT****************************

DAVID WEIDNER'S WRITING ON THE WALL

Government Sachs is in control

Commentary: Investment bank has strengthened its position through bailout

He leads one of the Street's biggest bailed-out firms, but unlike other companies propped up by taxpayers, Blankfein's Goldman Sachs Group Inc. is far more profitable. And it's poised to become a more influential force with greater market share.

Different from American International Group Inc or Citigroup Inc Goldman hasn't had to forfeit an ownership stake in its firm, and its shareholders -- many of them management and employees -- have benefited. Goldman shares trade above $100. That's less than half of where Goldman shares traded at their peak, but far better than the $1 and $3 that AIG and Citigroup shares trade for, respectively.

Since the fall of Bear Stearns Cos. a little more than a year ago, Goldman has taken more than $20 billion in taxpayer cash through loans, payments and backstops. Goldman's latest bailout coup was a $12.5 billion paid out of AIG's $180 billion government cash infusion.

Until it was fully extricated, Goldman always characterized its exposure to AIG as "immaterial," and that its $20 billion notional exposure to AIG was hedged. Turns out that it was -- through government bailouts that didn't exist when Goldman entered the contracts.

Even former New York Luv Guv Eliot Spitzer told journalist Fareed Zakaria on Sunday that he thinks something smells.

"The web between AIG and Goldman Sachs is something that should be pursued," Spitzer said. "Why did [those payments] happen, what questions were asked, why did we need to pay 100 cents on the dollar for those transactions if we had to pay anything, what would have happened to the financial system had it not been paid?"

But the AIG-Goldman affair is just the beginning, under the policy enacted by former U.S. Treasury Secretary Henry Paulson, Goldman's chief executive until 2006. Major competitors have failed or been diminished. Goldman already seems, if not just poised, to be dominating what's left of the investment banking landscape.

28 posted on 04/21/2009 2:06:08 PM PDT by Ernest_at_the_Beach (Support Geert Wilders)

I know nothing about him....

29 posted on 04/21/2009 2:07:30 PM PDT by Ernest_at_the_Beach (Support Geert Wilders)

To: Ernest_at_the_Beach

I forget where I read it but one giy said the rst of AIG is as toxic as it’s financial products division. That for years AIG has been pulling re-insurance scams where the re-insurer it uses is just another AIG sub-company

THe whole idea of re-insurance is to back up what you insure with more reserves. It has similarities to CDS because they back up your insurance bets with reserves (that are mythical but reserves none the less until last years blowup))

30 posted on 04/21/2009 2:21:36 PM PDT by dennisw (Your action becomes your habit. Your habit becomes your character, that becomes your destiny)

To: Ernest_at_the_Beach

I hang out on MW too! What’s your handle, I will send you a friend request.

31 posted on 04/21/2009 3:50:33 PM PDT by TenthAmendmentChampion (Be prepared for tough times. FReepmail me to learn about our survival thread!)

To: Ernest_at_the_Beach

32 posted on 04/21/2009 3:53:22 PM PDT by TenthAmendmentChampion (Be prepared for tough times. FReepmail me to learn about our survival thread!)

To: Ernest_at_the_Beach

Oh oops, that’s the source article. However, there are a bunch of comments on it.

33 posted on 04/21/2009 3:58:25 PM PDT by TenthAmendmentChampion (Be prepared for tough times. FReepmail me to learn about our survival thread!)

To: Ernest_at_the_Beach

34 posted on 04/21/2009 9:17:07 PM PDT by AmericanArchConservative (Armour on, Lances high, Swords out, Bows drawn, Shields front ... Eagles UP!)

To: TenthAmendmentChampion

i just look there ,...don’t have an id...

35 posted on 04/21/2009 10:27:17 PM PDT by Ernest_at_the_Beach (Support Geert Wilders)

To: Ernest_at_the_Beach

Thank you so much for the great finds!

36 posted on 04/22/2009 4:55:46 AM PDT by FromLori (FromLori)

Going back to the MW forum...found this link...haven't done anything with it though:

Goldman Matrix of holding companies

37 posted on 04/22/2009 9:26:56 AM PDT by Ernest_at_the_Beach (Support Geert Wilders)

To: Ernest_at_the_Beach

38 posted on 04/22/2009 9:30:38 AM PDT by FromLori (FromLori)

Yikes....just got into the first link...been busy following the CIA Interrogation Memo release and what appears to be Obama’s plan to prosecute past Bush officials over that....could Paulson be next in line....might be more justified....

39 posted on 04/22/2009 9:43:37 AM PDT by Ernest_at_the_Beach (Support Geert Wilders)

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