A. I. G. bailout

The Federal bailout of AIG, the insurance giant, was not just for AIG, but for all of the banks that held their derivative securities.

"E-mail messages made public in recent days show that A.I.G. sought the New York Fed’s advice on the contents of its filings about the bailout to the Securities and Exchange Commission. The New York Fed crossed out certain passages, including references to the fact that A.I.G.’s trading partners would get 100 cents on the dollar on their soured derivatives trades." NYT 27 Jan 2010.

Goldman Sachs came out smelling like a rose and could pay back its direct grant from the government. Given the fact that they were not required to share any of the AIG losses, it is hard to believe that they were not favorably treated.