[SK in CV]

[quote=Allan from Fallbrook]SK: Except, in this instance, that is not how collateral works. In this instance, Goldman was well within their rights to step in and seize the collateral and not have to wait in line. [/quote]

Can you give a quick explanation on this? Thinking it through, it makes sense that the collateral wouldn’t be the impaired assets, but I don’t understand how counter-parties to the contract would have anything other than an uncollateralized obligation. What assets exactly would they be asserting their ownership? They certainly didn’t have the right to sieze the TARP money.

[SK in CV]

[quote=Allan from Fallbrook]SK: Except, in this instance, that is not how collateral works. In this instance, Goldman was well within their rights to step in and seize the collateral and not have to wait in line. [/quote]

Can you give a quick explanation on this? Thinking it through, it makes sense that the collateral wouldn’t be the impaired assets, but I don’t understand how counter-parties to the contract would have anything other than an uncollateralized obligation. What assets exactly would they be asserting their ownership? They certainly didn’t have the right to sieze the TARP money.

[SK in CV]

[quote=Allan from Fallbrook]SK: Except, in this instance, that is not how collateral works. In this instance, Goldman was well within their rights to step in and seize the collateral and not have to wait in line. [/quote]

Can you give a quick explanation on this? Thinking it through, it makes sense that the collateral wouldn’t be the impaired assets, but I don’t understand how counter-parties to the contract would have anything other than an uncollateralized obligation. What assets exactly would they be asserting their ownership? They certainly didn’t have the right to sieze the TARP money.

[SK in CV]

[quote=Allan from Fallbrook]SK: Except, in this instance, that is not how collateral works. In this instance, Goldman was well within their rights to step in and seize the collateral and not have to wait in line. [/quote]

Can you give a quick explanation on this? Thinking it through, it makes sense that the collateral wouldn’t be the impaired assets, but I don’t understand how counter-parties to the contract would have anything other than an uncollateralized obligation. What assets exactly would they be asserting their ownership? They certainly didn’t have the right to sieze the TARP money.

[SK in CV]

[quote=Allan from Fallbrook][quote=SK in CV]
Speaking of the AIG counterparty payment, what’s your take on that? Nearly all of my information on that comes from former brokers, so I might be somewhat biased, but I don’t see any major problems with Goldman having received that payment (in that it was collateral they already held, so they were getting the money one way or the other).

[/quote]

The problem that I had with it is that it was basically a gift to GS. AIG owed GS (and others) tons of money because of their derivative liabilities. I remember providing some defense for the bailout, as to the need for injecting liquidity into the market. All the connections between the fed and the SEC and Treasury (those designing the bailout) and GS were pretty well known and bothersome. (If you haven’t read Matt Taibbi’s piece in Rolling Stone about GS, you should.) But it didn’t appear that Goldman Sachs would have their hands out. What I didn’t know, but I suspect all those creating TARP did know, is that GS would be by far the biggest beneficiary by way of those derivatives.

I don’t think that GS would have got all the money otherwise. AIG would have gone bankrupt. They would have been in line like other creditors. (the collateral, if indeed those derivatives are secured, which I’m not sure they are, would have been severely impaired.) It would have been full employment for BK attorneys for a decade. I have an attorney friend that does that kind of work for one of the giant law firms, and you better believe when there was talk of AIG going down, his erection lasted much longer than 4 hours.

So while they may have been legally entitled to the payments (the current charges against them notwithstanding), I’m not sure the payments they collected were really the intent of the bailouts. At least not superficially. I have little doubt those designing the bailout plans knew exactly where the money would go. Not exactly where I wanted my tax dollars going under the circumstances.

[SK in CV]

[quote=Allan from Fallbrook][quote=SK in CV]
Speaking of the AIG counterparty payment, what’s your take on that? Nearly all of my information on that comes from former brokers, so I might be somewhat biased, but I don’t see any major problems with Goldman having received that payment (in that it was collateral they already held, so they were getting the money one way or the other).

[/quote]

The problem that I had with it is that it was basically a gift to GS. AIG owed GS (and others) tons of money because of their derivative liabilities. I remember providing some defense for the bailout, as to the need for injecting liquidity into the market. All the connections between the fed and the SEC and Treasury (those designing the bailout) and GS were pretty well known and bothersome. (If you haven’t read Matt Taibbi’s piece in Rolling Stone about GS, you should.) But it didn’t appear that Goldman Sachs would have their hands out. What I didn’t know, but I suspect all those creating TARP did know, is that GS would be by far the biggest beneficiary by way of those derivatives.

I don’t think that GS would have got all the money otherwise. AIG would have gone bankrupt. They would have been in line like other creditors. (the collateral, if indeed those derivatives are secured, which I’m not sure they are, would have been severely impaired.) It would have been full employment for BK attorneys for a decade. I have an attorney friend that does that kind of work for one of the giant law firms, and you better believe when there was talk of AIG going down, his erection lasted much longer than 4 hours.

So while they may have been legally entitled to the payments (the current charges against them notwithstanding), I’m not sure the payments they collected were really the intent of the bailouts. At least not superficially. I have little doubt those designing the bailout plans knew exactly where the money would go. Not exactly where I wanted my tax dollars going under the circumstances.

[SK in CV]

[quote=Allan from Fallbrook][quote=SK in CV]
Speaking of the AIG counterparty payment, what’s your take on that? Nearly all of my information on that comes from former brokers, so I might be somewhat biased, but I don’t see any major problems with Goldman having received that payment (in that it was collateral they already held, so they were getting the money one way or the other).

[/quote]

The problem that I had with it is that it was basically a gift to GS. AIG owed GS (and others) tons of money because of their derivative liabilities. I remember providing some defense for the bailout, as to the need for injecting liquidity into the market. All the connections between the fed and the SEC and Treasury (those designing the bailout) and GS were pretty well known and bothersome. (If you haven’t read Matt Taibbi’s piece in Rolling Stone about GS, you should.) But it didn’t appear that Goldman Sachs would have their hands out. What I didn’t know, but I suspect all those creating TARP did know, is that GS would be by far the biggest beneficiary by way of those derivatives.

I don’t think that GS would have got all the money otherwise. AIG would have gone bankrupt. They would have been in line like other creditors. (the collateral, if indeed those derivatives are secured, which I’m not sure they are, would have been severely impaired.) It would have been full employment for BK attorneys for a decade. I have an attorney friend that does that kind of work for one of the giant law firms, and you better believe when there was talk of AIG going down, his erection lasted much longer than 4 hours.

So while they may have been legally entitled to the payments (the current charges against them notwithstanding), I’m not sure the payments they collected were really the intent of the bailouts. At least not superficially. I have little doubt those designing the bailout plans knew exactly where the money would go. Not exactly where I wanted my tax dollars going under the circumstances.

[SK in CV]

[quote=Allan from Fallbrook][quote=SK in CV]
Speaking of the AIG counterparty payment, what’s your take on that? Nearly all of my information on that comes from former brokers, so I might be somewhat biased, but I don’t see any major problems with Goldman having received that payment (in that it was collateral they already held, so they were getting the money one way or the other).

[/quote]

The problem that I had with it is that it was basically a gift to GS. AIG owed GS (and others) tons of money because of their derivative liabilities. I remember providing some defense for the bailout, as to the need for injecting liquidity into the market. All the connections between the fed and the SEC and Treasury (those designing the bailout) and GS were pretty well known and bothersome. (If you haven’t read Matt Taibbi’s piece in Rolling Stone about GS, you should.) But it didn’t appear that Goldman Sachs would have their hands out. What I didn’t know, but I suspect all those creating TARP did know, is that GS would be by far the biggest beneficiary by way of those derivatives.

I don’t think that GS would have got all the money otherwise. AIG would have gone bankrupt. They would have been in line like other creditors. (the collateral, if indeed those derivatives are secured, which I’m not sure they are, would have been severely impaired.) It would have been full employment for BK attorneys for a decade. I have an attorney friend that does that kind of work for one of the giant law firms, and you better believe when there was talk of AIG going down, his erection lasted much longer than 4 hours.

So while they may have been legally entitled to the payments (the current charges against them notwithstanding), I’m not sure the payments they collected were really the intent of the bailouts. At least not superficially. I have little doubt those designing the bailout plans knew exactly where the money would go. Not exactly where I wanted my tax dollars going under the circumstances.

[SK in CV]

[quote=Allan from Fallbrook][quote=SK in CV]
Speaking of the AIG counterparty payment, what’s your take on that? Nearly all of my information on that comes from former brokers, so I might be somewhat biased, but I don’t see any major problems with Goldman having received that payment (in that it was collateral they already held, so they were getting the money one way or the other).

[/quote]

The problem that I had with it is that it was basically a gift to GS. AIG owed GS (and others) tons of money because of their derivative liabilities. I remember providing some defense for the bailout, as to the need for injecting liquidity into the market. All the connections between the fed and the SEC and Treasury (those designing the bailout) and GS were pretty well known and bothersome. (If you haven’t read Matt Taibbi’s piece in Rolling Stone about GS, you should.) But it didn’t appear that Goldman Sachs would have their hands out. What I didn’t know, but I suspect all those creating TARP did know, is that GS would be by far the biggest beneficiary by way of those derivatives.

I don’t think that GS would have got all the money otherwise. AIG would have gone bankrupt. They would have been in line like other creditors. (the collateral, if indeed those derivatives are secured, which I’m not sure they are, would have been severely impaired.) It would have been full employment for BK attorneys for a decade. I have an attorney friend that does that kind of work for one of the giant law firms, and you better believe when there was talk of AIG going down, his erection lasted much longer than 4 hours.

So while they may have been legally entitled to the payments (the current charges against them notwithstanding), I’m not sure the payments they collected were really the intent of the bailouts. At least not superficially. I have little doubt those designing the bailout plans knew exactly where the money would go. Not exactly where I wanted my tax dollars going under the circumstances.

[SK in CV]

Right Allen, they had a very temporary cash crunch. But never an equity crunch. They didn’t need, nor get any TARP money directly. But as counter-party, they got almost $13 billion in cash from AIG. Compared to Lehman, Bear Stearns or GM, they were never in danger.

[SK in CV]

Right Allen, they had a very temporary cash crunch. But never an equity crunch. They didn’t need, nor get any TARP money directly. But as counter-party, they got almost $13 billion in cash from AIG. Compared to Lehman, Bear Stearns or GM, they were never in danger.

[SK in CV]

Right Allen, they had a very temporary cash crunch. But never an equity crunch. They didn’t need, nor get any TARP money directly. But as counter-party, they got almost $13 billion in cash from AIG. Compared to Lehman, Bear Stearns or GM, they were never in danger.

[SK in CV]

Right Allen, they had a very temporary cash crunch. But never an equity crunch. They didn’t need, nor get any TARP money directly. But as counter-party, they got almost $13 billion in cash from AIG. Compared to Lehman, Bear Stearns or GM, they were never in danger.

[SK in CV]

Right Allen, they had a very temporary cash crunch. But never an equity crunch. They didn’t need, nor get any TARP money directly. But as counter-party, they got almost $13 billion in cash from AIG. Compared to Lehman, Bear Stearns or GM, they were never in danger.

[SK in CV]

[quote=Allan from Fallbrook]
Do a little research on what investment bankers call the “overnight repo” market. All the major houses survive on these type short-term lending facilities. Bear Stearns was scuttled, and within a few days, when the Street lost confidence in them and their repo facilities dried up. Lehman and Goldman also found themselves in this same situation and Goldman came periously close to foundering , just like Bear and Lehman. Ever wonder why they didn’t go under, too? The answer is right there in front of you.[/quote]

No, Goldman Sachs never came perilously close to foundering. They were ahead of the curve. Hell, there is evidence that they helped create the curve both on the way up and pushed it along on the way down, betting against the mortgage market (part and parcel to the fraud charges). Unlike almost every other large investment bank, they haven’t had a losing year through the recent past. Like all other finacials, their stock lost value, but regained most of it.

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