Defaulting banks - where will it stop?

[Jan Klimkowski]

The bankers' coup d'etat continues.

Full speed ahead before taxpayers work out they've been screwed. :bike:

Goldman Sachs has amassed a war chest of $164bn (£110bn) in cash and liquid assets that could be used to buy distressed securities and loans as its rivals clear their balance sheets, Goldman’s chief financial officer said on Tuesday.

http://www.ft.com/cms/s/0/fa8701b2-2916-...ck_check=1

Karl Denninger spells it out at Market Ticker:

If in fact Goldman (or anyone else) was "hedged" against a possible credit loss from their CDS with AIG and they were able to collect on that hedge (no matter what it was) those payments through AIG need to be clawed back immediately as nobody is entitled to be paid twice for the same risk and reap what amounts to a windfall profit by quite literally engineering a multi-billion dollar transfer of funds from the Taxpayer to the firm!

Now I know that people speak "imprecisely" and reporters do not always get it right, but I think what was said in that Bloomberg article is:

Goldman got paid over time for their hedge (e.g. they bought CDS that went into the money, they were short the AIG equity as a hedge, etc.)
The "current" gain (in the last quarter) was basically zero on that hedge (if they were short the equity, for example, this would be expected, as the price of the stock is basically zero and has been all quarter.)
Ergo, they got paid previously on the hedge over the previous two years and change and as such the question still stands, and is in fact amplified: IT APPEARS GOLDMAN GOT PAID TWICE FOR THE SAME RISK AND THE SECOND PAYMENT CAME STRAIGHT OUT OF THE TAXPAYER'S HIDE.

If so, that transfer payment was improper as Goldman had already collected on the bet and thus must be clawed back.

http://market-ticker.org/archives/958-Go...s-So!.html

Insider financial elites can now cherry pick "distressed assets" for next to nothing, and they don't even have to risk their own money. They're using cash stolen from the taxpayer.