Posts filed under “Bailout Nation”
The NYT is reporting that A.I.G. has dismissed Goldman Sachs as an advisor:
“A.I.G., the insurance giant that planned to retain Goldman to help reorganize its businesses, has replaced Goldman as its main corporate adviser, according to three people with knowledge of the matter, which was not intended to be public. Instead, the insurer is turning to Citigroup and Bank of America.
The move is the first in what some analysts warn could be a series of defections among Goldman’s clients after accusations — vigorously denied by Goldman — that it defrauded customers in a complex mortgage investment.”
I don’t buy into the Goldman defections — yet — due to the fraud allegations.
This smells like a little payback for Goldman’s role in the AIG collapse.
Don’t get me wrong, Goldie didn’t kill AIG, the insurer committed suicide. They were were reckless in their embrace of derivatives and had horrific risk management. As noted in Bailout Nation, the head of AIG FP, Tom Savage, actually said “The models suggested that the risk was so remote that the fees were almost free money. Just put it on your books and enjoy.”
So I don’t want anyone to think I am blaming Goldie for AIG’s demise.
But they were the first vulture to arrive at the site of the wounded body, and they began tearing at AIG’s flesh before it was even carrion. Almost $20 billion in transfers took place from AIG to GS — BEFORE their collapse, BEFORE the bailouts. The rest of the taxpayer gift — at 100 cents on the dollar — was simply free money.
So, if you were in AIG’s shoes, and you had an opportunity to kick Goldie when they are stumbling around a bit — why wouldn’t you give them a swift knee to the groin?
Payback is a bitch . . .
A.I.G. Said to Dismiss Goldman
LOUISE STORY and ERIC DASH
NYT, May 6, 2010
I have regularly trashed Robert Rubin in this blog for quite some time. And while I further tarnish the name of Rubin in Bailout Nation — he is between Hank Paulson and Larry Summers in our blame list — I probably could have slapped him around even more had time and space pemitte.d No Matter….Read More
Wow, great new review of Bailout Nation in GQ: “If you read nothing else about money, read [this}: There has been no shortage of books to explain our recent recession, but to understand what the hell we all just lived through and how the fallout is going to affect us for a loooong time to…Read More
“I think they were wrong and I think I was wrong to take” their advice.” -President Bill Clinton, April 18, 2010 on on ABC’s “This Week.” > In Bailout Nation, I held Bill Clinton, and his two Treasury Secretaries, Robert Rubin and Larry Summers, responsible for signing the ruinous Commodity Futures Modernization Act that exempt…Read More
Here are the most up-to-date collection of reviews for Bailout Nation: USA Today: “Best books to make sense of financial crisis of 2009” Miami Herald: “Best business books of 2009” Marketplace Radio: The best business books of 2009 Stock Trader’s Almanac: “Investment Book of the Year” “Succeeds in laying out all that transpired in easy-to-understand…Read More
In his column titled An Irish Mirror, Paul Krugman notes “the most striking similarity between Ireland and America was “regulatory imprudence”: the people charged with keeping banks safe didn’t do their jobs.” (emphasis mine) The phrase “regulatory imprudence” is far to imprecise — and wimpy — to describe what took place. Imprudent, as defined by…Read More
Oh, goody, the status quo duo are leading the search for not one but three FOMC governors. These two are notable not only for their devotion to The Street, but for their acute lack of judgment in most matters financial. They are the reason Obama is quite possibly going to be a one term President….Read More
One of the cool things about Amazon is the ability to track what gets purchased when referred from the site. For privacy reasons, I only know what was purchased, not by who — so whoever bought Ginger Lynn’s The Pleasure Hunt video, your secret is safe). I find it intriguing to see which books were…Read More