Goldman Sachs (NYSE: GS) benefited greatly when the government decided to bailout AIG (NYSE: AIG), as it was paid in full on the collateral that AIG owned for various CDSs. Goldman Sachs has also maintained it was fully hedged against an AIG implosion, so it really wasn't motivated by fear of an AIG bankruptcy.

But based on some documents it was forced to turn over to Congress, it appears that many of Goldman's contracts to hedge against its AIG risks were with Lehman Brothers and Citigroup, among others. Lehman, of course, was destined to go belly-up, and Citigroup was destined to become a ward of the government.

So the New York Times suggests that Goldman' hedge was less solid than it let on. Perhaps that was why they were so reticent to reveal the counterparties. This suggests the counterparties--which also include JPMorgan Chase, Morgan Stanley, Credit Suisse and funds managed by PIMCO--had a rooting interest in the AIG drama. If the firms went belly-up, they would have had to pay out to Goldman Sachs to the tune of billions, notes The Atlantic. The bailout saved them all.

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