Regarding the Times front-page story this weekend, which alleged that the collapse of AIG was essentially caused by Goldman Sachs, because Goldman Sachs demanded AIG pay up on the credit default swaps AIG had willingly written and sold to them while not having the money to back it up, embattled-yet-still-sassy Goldman spokesman Lucas Van Praag had this to say:
“We requested the collateral we were entitled to under the terms of our agreements, and the idea that A.I.G. collapsed because of our marks is ridiculous.”
Well. We wouldn't say it is ridiculous, because Goldman demanding a few billion dollars at such an inopportune time clearly had an impact on AIG (as it would on anyone, few institutions, GS excepted, can take the loss of billions in stride). But does that make the collapse of AIG Goldman's fault? And if so, does that mean if we borrow money from someone who is a known jerk, such as Citigroup*, and then don't have the money to pay them back when they come after us with their scary phone calls, that is their fault, and not ours? Just curious, because that would be really handy.
Testy Conflict With Goldman Helped Push A.I.G. to Edge [NYT]
*Not saying this is going to happen! Check totally in the mail!