Courtney Comstock at Business Insider took down a rough transcription:
Raj Rajaratnam: I called you because there's a rumor that Goldman might buy a commercial bank.
Rajat Gupta: There was a big discussion, a divided discussion, at a board meeting. More people were saying why, because it's a low return business... but it may be interesting to develop a deposit base which is a low cost source of funding. Not that we're having trouble raising funding...
Rajat Gupta: AIG was in the discussion mix... there's some value there, with AIG or Wachovia.
Goldman and AIG considered merging in the late 1990s. But it is certainly breaking news that Goldman considered buying AIG in 2008. In May of 2008, Goldman's analysts took AIG off their "buy" list, marking the first time in five years that AIG wouldn't be on that list. By the following September, AIG had failed and required a government bailout to stay in business.
Although initial reports don't date the conversation--Business Insider only says it took place after 2006--it's easy to determine that it took place in 2008. The government only got authorization to tap the phone of Rajaratnam in spring of 2008, so the conversation could not have taken place earlier. And by 2009, Wachovia would have already have been acquired by Wells Fargo. So the talk must have taken place in 2008.
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