If CIT fails, Goldman wins -- with a $1 billion payoff

Goldman Sachs Group (GS) doesn't provide much detail on how it racks up billions of trading profits every quarter. But if you look at how it made out on American International Group's (AIG) failure -- a $12.9 billion check from taxpayers -- you start to get the idea. Goldman has engineered the world so it wins no matter what. That's why Goldman is also set to profit -- to the tune of $1 billion, according to Bloomberg -- from the failure of another borrower, CIT Group (CIT).

Before checking into Goldman's latest head-I-win, tails-you-lose deal let's review what happened with AIG, which the U.S. took over last fall because then-Treasury Secretary and former Goldman CEO Hank Paulson decided that the government needed to bail out Goldman's credit default swap (CDS) exposure to AIG at 100 cents on the dollar and keep it secret. Unfortunately, Paulson's efforts at secrecy failed, and we learned that Goldman got $12.9 billion and that foreign banks got billions more.