Warren Buffet recently put $5b into Goldman (admittedly they issued him some new stock that comes loaded with all kinds of options and dividends), and amid reports that Goldman may have significant derivatives exposure via AIG, one would assume that Buffet (Mr. Anti-Derivatives, at least in name) required full transparency on the Goldman balance sheet before signing the check.Gretchen Morgenson digs around for some numbers in yesterday's IHT, nohing the Blankfein was the only CEO at the Fed AIG meeting, but she comes up short:
"Few knew of Goldman's exposure to AIG. When the insurer's flameout became public, David Viniar, Goldman's chief financial officer, assured analysts on Sept. 16 that his firm's exposure was 'immaterial,' a view that the company reiterated during an interview....Lucas van Praag, a Goldman spokesman, declined to detail how badly hurt his firm might have been had AIG collapsed two weeks ago. He disputed the calculation that Goldman had $20 billion worth of counterparty risk to AIG, saying the figure failed to account for collateral and hedges that Goldman deployed to reduce its risk....Regarding Blankfein's presence at the Fed during talks about an AIG bailout, he said: 'I think it would be a mistake to read into it that he was there because of our own interests. We were engaged because of the implications to the entire system.'"Given that Goldman was the only big bank to officially pull out of subprime crime crap ahead of the meltdown, I'm inclined to believe Blankfein, and take Buffet's investment as a vote of confidence.
