VIDEO: Early Warning on AIG and Questions on Goldman's Role
Fox Business - March 18, 2009
Janet Tavakoli with Elizabeth MacDonald and Brian Sullivan

Janet Tavakoli explains that AIG had a lot of cliff risk in some of their credit derivatives linked to mortgage backed products, and she questioned these trades in August of 2007. Goldman Sachs was a key trading partner. Some of the mortgage products coming out of Goldman Sachs Alternative Mortgage Products looked dodgy. AIG seems to have done most of its trades with Goldman during Hank Paulson's tenure as CEO at Goldman, and tough questions should be asked about the nature of the risk that AIG put on with Goldman Sachs

The key question is whether Goldman asked AIG to insure mortgage backed products issued by Goldman or affiliates such as Goldman Sachs Alternative Products that were problematic.

Was the lack of disclosure at the time of the bailout to save Goldman from embarrassment?


See also: Did AIG Insure Dodgy Mortgage Products for Goldman Sachs?


Janet Tavakoli is the president of Tavakoli Structured Finance, a Chicago-based firm that provides consulting to financial institutions and institutional investors. Ms. Tavakoli has more than 20 years of experience in senior investment banking positions, trading, structuring and marketing structured financial products. She is a former adjunct professor of derivatives at the University of Chicago's Graduate School of Business. She is the author of: Credit Derivatives & Synthetic Structures (John Wiley & Sons, 1998, 2001), Structured Finance & Collateralized Debt Obligations (John Wiley & Sons, 2008), and
Dear Mr. Buffett: What An Investor Learns 1,269 Miles From Wall Street (John Wiley & Sons January 2009)

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