Well! Somebody obviously didn't get the memo! Congressman Elijah Cummings wants to probe why the bailout money we lent to AIG went to collateral calls from Wall Street firms such as Goldman Sachs. He also wants to know why we decided to take AIG's counterparties out at par on the assets underlying CDO credit default swaps. We're sorry Congressman but Goldman CFO David Viniar has already cleared this item up for us. He told us categorically that Goldman's exposure to AIG was immaterial. Isn't that enough? I mean he said it in the New York Times for Pete's sake (who is Pete by the way?) so it has to be true!
We here at Monkey Biz say "God speed Elijah Cummings!" But instead of the usual circus show trials that they have in Congress, just let Mr. Viniar tell you, with supporting documentation how Goldman managed to hedge their CDO exposure by purchasing credit default swaps from AIG and then how Goldman was able to "sterilize" this exposure to AIG. Let him show you who provided Goldman protection on AIG and then bring in an independent party to determine the probability that whoever provided Goldman with that protection could have survived an AIG default. Should be simple no?