http://www.ritholtz.com/blog/2009/07/goldman-primed-to-benefit-from-aigs-woes-again/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 23:17:23 +0000 hourly 1 http://wordpress.org/?v=3.0.5 http://www.ritholtz.com/blog/2009/07/goldman-primed-to-benefit-from-aigs-woes-again/comment-page-1/#comment-189841 toblerone Sat, 04 Jul 2009 14:32:18 +0000 http://www.ritholtz.com/blog/?p=30903#comment-189841 Although Cohen wrote an interesting book, you have to question his understanding of the market after reading the article. Credit default swaps aren't flood insurance. There's no secondary market for flood insurance after you buy it. Once you spend the premium, its gone. With credit default swaps, there's daily two way liquidity in the over the counter market. If Goldman Sachs didn't need the AIG credit protection anymore, it probably sold the credit default swaps back to the market to recoup some of the original costs. This appears to be an populist piece with a populist title that's poorly researched if not ignorant. Shame on you for posting it. You should know better. Although Cohen wrote an interesting book, you have to question his understanding of the market after reading the article. Credit default swaps aren’t flood insurance. There’s no secondary market for flood insurance after you buy it. Once you spend the premium, its gone. With credit default swaps, there’s daily two way liquidity in the over the counter market. If Goldman Sachs didn’t need the AIG credit protection anymore, it probably sold the credit default swaps back to the market to recoup some of the original costs. This appears to be an populist piece with a populist title that’s poorly researched if not ignorant. Shame on you for posting it. You should know better.

]]> http://www.ritholtz.com/blog/2009/07/goldman-primed-to-benefit-from-aigs-woes-again/comment-page-1/#comment-189777 impermanence Sat, 04 Jul 2009 00:35:00 +0000 http://www.ritholtz.com/blog/?p=30903#comment-189777 Don't waste your time with this one. Don’t waste your time with this one.

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