Posted on 06/22/2009 10:26:10 AM PDT by FromLori
Well, kind of.
Goldman Sachs (GS) Group Inc. and Societe Generale SA extracted about $11.4 billion from American International Group Inc. before the insurer’s collapse as the firms demanded to hold cash against losses on mortgage-linked securities, according to regulatory filings.
Goldman Sachs got $5.9 billion and Societe Generale received $5.5 billion of about $18.5 billion in collateral paid by AIG in the 15 months before the September bailout. The payments helped settle AIG’s obligations on $62.1 billion of credit-default swaps that the Federal Reserve later removed from the New York-based insurer as part of the rescue. Officials at AIG, Goldman Sachs and Societe Generale declined to comment.
So Goldman and Soc Gen decided (smartly) to skip to the head of the line, and demand cash before the whole thing fell apart, though in all likelihood they would've been bailed out anyway, given the policy of paying AIG (AIG) counterparites in full.
That being said, Goldman didn't really kill AIG. AIG did. The company's been bailed out to the tune of hundreds of billions of dollars. While Goldman may have had a hand in turning the screws to the company, they obviously aren't the prime factor here. Far from it. And considering the mess that the rest of AIG appears to have been, all we can say is that Goldman's demands may have been the inciting incident, but far from the real story.
(Excerpt) Read more at businessinsider.com ...
Even as we speak, some other behemoth is busy digging its own hole that the taxpayers will have to fill.
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