It seems like only yesterday that the term billionaire replaced millionaire as the appropriate label for the rich. More recently we began to hear about trillions when speaking about national indebtedness. Now it seems even $10 billion can be immaterial, if you are Goldman Sachs.
In September last year Goldmans were upset by a story in the New York Times, which said that Goldmans had a substantial exposure to AIG. The story was primarily aimed at AIG ("It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing one dollar in any of those transactions.” - Joe Cassano, ex-AIG - ha, ha, ha ), but it said that Goldman was "A.I.G.’s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements". That kind of figures because when someone is on the losing side of a trade (in this case AIG), Goldman is more often than not on the winning side. That is how they make money.
After the NY Times report, Goldman issued a rebuttal statement which was carried by Reuters and other agencies, which said Goldman rejected as “seriously misleading” the report that said the Wall Street bank had as much as $20 billion of exposure to the troubled insurance giant American International Group Inc., adding that Goldman's “exposure to AIG was, and is, not material”.
We now know the identities of the counterparties who have been paid out under AIG’s government bailout. And guess which bank had the highest payout, owed a grand total of $12.9 billion by AIG and AIG FP? You guessed it.
Which puts a whole new meaning on the word “immaterial”.