Thursday, November 6, 2008
CDS's and Vulture Capital
If the swaps held to maturity are worth more than nil as the pundits proclaim why aren't the troubled banks selling them to vulture capital firms?
Wednesday, November 5, 2008
Goldman and AIG
John Paulson, Secretary of the Treasury bailed out AIG which lost 80% of its equity to the government and is paying close to 14% interest for the $85billion accommodation. The interest is about $1billion per month. The government gave the other banks billions at 5%. Of the $85billion money, all of it went to Wall Street firms including Goldman (John Paulson's old firm) and the rest to other firms to shore up the AIG guarantees that the other banks bought to package and invest in sub-prime loans. The new AIG CEO, Liddy, and appointed by Paulson, was on the board of Goldman. AIG took in the cash and then had to give it to Wall Street. None of the money really stayed in AIG. Was this really a way to soften the charge that the government was pandering to Wall Street and merely using AIG's position as a conduit? Could it be a bit of sharp practice by the Goldman, et. al. gang? Lets see what if any assets Goldman buys form AIG.
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