In case you were wondering where on earth all that money went that you shoveled into the black hole known as AIG, we now have a pretty good idea.
- $13 billion of it went to Goldman Sachs
- $12 billion went to Soc Gen
- $12 billion went to Deutsche Bank
- $9 billion went to Barclays
- $7 billion went to Merrill Lynch
- $5 billion went to Bank of America
And so on.
All these firms did business with AIG voluntarily. All these firms knew (or should have known) the risks of doing business with an unregulated firm in an unregulated part of the market. All these firms were willing to take the risk that AIG wouldn’t be able to make good on its commitments.
(Or, more accurately, all these firms were willing to take the risk the government would NOT bail out AIG if it were as dumb and reckless as it looked–and this proved to be a safe and smart bet.)
By now, however, one thing should be clear: The government’s decision to bail out AIG on the terms it did was a colossal mistake. All of the counterparties that were secretly bailed out via the AIG bailout could have and should have shared at least some of the loss. But because incompetence is clearly not confined to those who work in the financial services industry, the American taxpayer will, once again, foot the bill.
Here’s the full list of those who got secret bailouts via AIG, ranked in order of gift. Read it and weep:
And here’s the press release, which was no doubt timed to dilute the outrage over the $450 million in bonus payments AIG just made to the division that made all these idiotic commitments in the first place. A.I.G.’s Biggest Counterparties