To wit, we didn’t write that Goldman provided financing to SocGen, as Lucas states. Rather, it is our understanding that Goldman purchased AIG insurance on mortgage positions from SocGen, insurance SocGen itself had purchased from AIG at an earlier point in time. When the US government bailed out AIG and reimbursed SocGen, Goldman and other firms at 100 cents on the dollar for their AIG contracts, it is our understanding that a portion of the amount paid to SocGen was then channeled to Goldman.

In a note to me, van Praag says it’s just not true that Goldman bought such insurance from SocGen.

I think Tim (and by extension Gretchen and Louise) is misinformed. He writes that “it is our understanding that Goldman purchased AIG insurance on mortgage positions from SocGen, insurance SocGen itself had purchased from AIG at an earlier point in time.” We didn’t, and the statement implies a lack of understanding of how credit default swaps work.

He adds:

The allegations they’ve made are damaging to us, because they further the negative sentiment generated around the subject of AIG and us…I don’t know who the two people claiming to have knowledge of the positions are, but they are wrong and appear to have misled the Times

At least things are clearer now. This is a fact dispute, not a murky fairness problem. The Times says its reporting found that Goldman bought such insurance from SocGen. Goldman says it’s not true.

O’Brien tells me the Times’s account will be borne out in time: “I’m happy to see how the reporting plays out on this one.”

At this point, though, we’re left with a factual assertion by two anonymous sources pitted against a flat denial, on the record. Readers can make up their own minds. Others might call it a jump ball, but for me the benefit of the doubt should go to the side on the record: Goldman.

A couple of thoughts:

First, though both sides say the facts eventually will vindicate them, the truth is, as a practical matter, we’ll never know. This dispute will be long forgotten by the time we find out for sure.

Second, we’re talking about 45 words out of a 2,600 word-story. This is lagniappe. As I say, the rest of the piece held up, as has almost all of the Times’s reporting on Goldman. The SocGen issue is subsidiary, nothing like the main premise of the story. Still, Goldman has the right to feel that it was hurt by reporting that it gained extra bailout money, and from a French bank, no less.

On the other hand, Goldman’s feelings really aren’t the issue, are they? For more on that, read this.

Third, it’s important to keep in mind that this heated and long-running collision between two iconic institutions—newspaper and bank—over where the bank fit into the AIG bailout has yielded huge dividends for the public’s understanding of the financial crisis. This should continue.

Fourth, O’Brien says that Goldman was offered a chance to knock down that part of the story for the record and didn’t. Without getting into who-said-what, those situations should be avoided.

Fifth, the paragraph in question was poorly written. If the Times meant that Goldman had bought AIG-issued insurance from SocGen, it should have just said so.

Finally, it’s well worth noting that despite the intensity and the obvious stakes, the institutional clash has remained remarkably civil. It should stay that way.

Dean Starkman writes and edits The Audit. He is CJR's Kingsford Capital Fellow.