You may remember me commenting on the anger in many circles about the funds that counterparties to the AIG credit default swaps were receiving. My basic point was that not just anyone was investing in these things. Contrary to popular belief (i.e. Congress), there are plenty of people that work at investment banks that know what the hell they're doing
Dealbreaker expands on this subject by stating that conspiracies theories spring up like mariujuana plants in a Santa Cruz closet when "AIG" is added to any otherwise normal settlement of these derivatives.
In other words, Goldman Sachs is making money hand over fist on the unwinding of these transactions with hedge funds but once AIG gets dropped in as the writer, the second gunman on the grassy knoll theories start coming out (including, as DB notes, Zero Hedge, read here).
The whole point is, when AIG starting unwinding these CDS's with taxpayer money, said money went to banks (JPM, BoA, GS, etc.). Does it suck? Of course but I'm not sure if deserves the Maxine Waters conspiracy theory treatment.
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Monday, March 30, 2009
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