Sunday, March 15, 2009

Is AIG's major counterparty China?

The NYT summarizes the state of dispute about where AIG money is going. Who are the "counterparties"? Shouldn't they take a hit too?

Maybe, but we're beyond mere billions here. These are nation-sized hits.

I can imagine "counterparties" who we really don't want to disrupt.

China, for example.

America's in a tough spot, Europe's probably in a significantly worse spot, but China is spun glass on a cliff. If China goes, we all go.

So even though I'm sure Geithner is as human and imperfect as the rest of us, and even though there's been about as much fraud in the world as I'd imagined these past years, and even though people who earn vast millions still delude themselves that they have some sort of meretricious claims to their wealth, even given all of the above, I can imagine reasons why Geithner would want to keep quiet about AIG's counterparties.

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