Last week, the bankrupt insurance giant AIG received an additional
$30 billion in bailout funds from the United States government, raising
its total take to $170 billion. The funds, however, aren’t going into
the benighted firms coffers to aid the liquidation and deleveraging
process.
Rather, the AIG bailout masks the bailing out of other firms
that AIG pays in order to maintain credit default swap guarantees
offered to investors who purchased them to hedge risk. These firms
include (according to the WSJ)
Goldman Sachs ($6 billion), Deutsche Bank ($6 billion), Merrill Lynch,
Société Générale, Calyon, Barclays, Rabobank, Danske, HSBC, Royal Bank
of Scotland, Banco Santander, Morgan Stanley, Wachovia, Bank of
America, and Lloyds Banking Group.
It appears that we all work for Wall Street, in one way or another.
Nonetheless, the convergence of capital markets and government must
stop if the institutions of a liberal international order (1, 2) are to be maintained.
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