NEW YORK ( TheStreet) -- In the world of financial conspiracy theories about Goldman Sachs' (GS - Get Report) connection to Berkshire Hathaway (BRK-B), this one can be debunked: Berkshire wasn't insuring the $20 billion that Goldman risked losing if AIG (AIG - Get Report)defaulted in September 2008 -- at least not all of it.
|Lloyd Blankfein, chairman and CEO of Goldman Sachs, testifies before the Senate Homeland Security and Governmental Affairs.|
In fact, even that $20 billion figure isn't entirely accurate, nor is the $13 billion figure often cited as Goldman's counterparty "bailout" via AIG.
First, a little background on how this article came to pass.A reader named Michael Folk sent an e-mail on Monday night, in response to an article I had written about Warren Buffett, who heads Berkshire Hathaway. Berkshire holds a $5 billion preferred stock investment in Goldman, and Buffett has been a vocal supporter of the firm and its CEO, Lloyd Blankfein, as Goldman faces high-profile scrutiny of a CDO deal it structured back in 2007. Besides a raft of negative media attention, the SEC has filed civil fraud charges against Goldman, and the Justice Department is reportedly investigating its behavior. In his e-mail, Folk brought up Blankfein's testimony last week before a Senate investigatory committee, related to AIG's $180 billion bailout in the fall of 2008. A healthy portion of those taxpayer dollars were funneled through AIG to make whole its counterparties on mortgage-related