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Author Topic: AIG & the 'F' Word  (Read 1527 times)
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WhiskeyGirl
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« on: December 26, 2009, 07:22:45 AM »

I heard someone on TV finally use the ‘F’ word.

Why did AIG need a bailout exactly?  Was there ever public disclosure of WHO would lose if AIG collapsed.

From my reading over more than a year, a few things stand out.  From memory -

AIG was largely profitable...except for a tiny piece that was wheeling and dealing in derivatives and Credit Default Swaps.

Why wasn't it allowed to go into bankruptcy?  Cut loose, sell the profitable, and let those unprofitable pieces go.  Who would have lost out?  Consumers?

Would public disclosure of the losers hurt someone’s image?

The U.S. Federal Reserve has refused to publicize a list of AIG's counterparties and what they have been paid since the bailout -- a move that has riled the U.S. Senate Banking Committee.

Where did the AIG bailout money go?  IIRC, to Goldman Sachs, and a number of foreign banks.

Quote
Federal Reserve Vice Chairman Donald Kohn testified before that committee on Thursday, saying that revealing names risked jeopardizing AIG's continuing business.

Senators are outraged by the lack of details about where the bailout money has gone, likening AIG's underwriting of credit default swaps as gambling with somebody else's money.

http://www.reuters.com/article/idUSTRE5270YD20090308

Where is the continuing feeding of taxpayer money going?  To make good on all those CDS and derivative losses?  Why are taxpayers getting stuck with the bill?

Why aren’t the counterparties taking a hair cut or losing? 

“European banks declined to discuss a report that they were beneficiaries of the $173 billion bail-out of insurer AIG…”

Quote
Goldman Sachs, Morgan Stanley and a host of other U.S. and European banks had been paid roughly $50 billion since the Federal Reserve first extended aid to AIG, the Wall Street Journal reported on Friday.
French banks Societe Generale and Calyon on Sunday declined to comment on the story, as did Deutsche Bank, Britain's Barclays and unlisted Dutch group Rabobank.
Other banks mentioned in the Journal's article include HSBC , Wachovia, Merrill Lynch, Banco Santander and Royal Bank of Scotland.

http://www.reuters.com/article/idUSTRE5270YD20090308

From my perspective, it looks like all these countries in the list are getting stronger, the US treasury is being looted, and US taxpayers are paying the price with Depression, higher debt, higher taxes, and loss of jobs, prosperity, and opportunity.

Where is the ‘FIDUCIARY’ responsibility?  Looking at emails doesn’t seem to be magic anymore.  What about the old fashioned idea of a ‘fiduciary relationship’?

Didn’t anyone notice that AIG was failing?  Anyone create or read reports?

AIG looks like it continues to be a giant taxpayer funded pass through. 

Why are US taxpayers stuck with all the debt from this global financial monstrosity?

Would it have been better for the leadership of this GLOBAL monstrosity to have faced the courts in a number of nations for the failure?

Instead, US taxpayers are on the hook for all the financial losses.

Something stinks in Washington.  What happened to fiduciary responsibility?  Congress?  The White House?  Treasury?  Federal Reserve?

jmho
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WhiskeyGirl
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« Reply #1 on: December 26, 2009, 07:33:23 AM »

From another thread, almost a year ago, the questions remain valid -

Quote
The Wall Street Journal, citing a confidential document and people familiar with the matter, reported that Goldman Sachs and Deutsche Bank each got about $6 billion in payments between the middle of September and December last year.


Quote
It's like taking insurance on your neighbor's house and even maybe contributing to blowing it up," he said at a panel sponsored by New York University's Stern School of Business.

http://ca.reuters.com/article/businessNews/idCATRE52624P20090307

I wonder who in the Treasury, Federal Reserve, and the Bush/Obama economic advisory teams have interests in any of the these banks bailed out by taxpayers?

Why bailout AIG?  Was the intention to create a mighty taxpayer funded pass through system?


All these healthy companies and nations, as they get better US taxpayers continue to get the bill.

Job losses, higher debt, ankruptcies, foreclosures...

Who's looking out for Americans?
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All my posts are just my humble opinions.  Please take with a grain of salt.  Smile

It doesn't do any good to hate anyone,
they'll end up in your family anyway...
WhiskeyGirl
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« Reply #2 on: December 26, 2009, 07:38:00 AM »

Another old thread http://scaredmonkeys.net/index.php?topic=4862.0#quickreply

Profit on the backs of future Americans?  Generational theft?

Quote
The Real AIG Scandal
It's not the bonuses. It's that AIG's counterparties are getting paid back in full.

Quote
...go back to the very first decision to bail out AIG, made, we are told, by then-Treasury Secretary Henry Paulson, then-New York Fed official Timothy Geithner, Goldman Sachs CEO Lloyd Blankfein, and Fed Chairman Ben Bernanke last fall.


Quote
...they feared a systemic failure could be triggered by AIG's inability to pay the counterparties to all the sophisticated instruments AIG had sold...

Some would call these 'sophisticated instruments' - 'simple gambling debts'. - mo

Quote
...who were AIG's trading partners? No shock here: Goldman, Bank of America, Merrill Lynch, UBS, JPMorgan Chase, Morgan Stanley, Deutsche Bank, Barclays, and on it goes. So now we know for sure what we already surmised: The AIG bailout has been a way to hide an enormous second round of cash to the same group that had received TARP money already.


Wow.  All those folks are suddenly profitable!!!  Who's paying the price?  The folks that made all the money on those profits?  Taxpayers.   

Quote
...aren't we in the midst of reopening contracts all over the place to share the burden of this crisis? From raising taxes—income taxes to sales taxes—to properly reopening labor contracts, we are all being asked to pitch in and carry our share of the burden. Workers around the country are being asked to take pay cuts and accept shorter work weeks so that colleagues won't be laid off. Why can't Wall Street royalty shoulder some of the burden? Why did Goldman have to get back 100 cents on the dollar? Didn't we already give Goldman a $25 billion capital infusion, and aren't they sitting on more than $100 billion in cash? Haven't we been told recently that they are beginning to come back to fiscal stability? If that is so, couldn't they have accepted a discount, and couldn't they have agreed to certain conditions before the AIG dollars—that is, our dollars—flowed?

Maybe Goldman and others have suffered more than the rest of us?

Quote
What is the deeper relationship between Goldman and AIG? Didn't they almost merge a few years ago but did not because Goldman couldn't get its arms around the black box that is AIG? If that is true, why should Goldman get bailed out? After all, they should have known as well as anybody that a big part of AIG's business model was not to pay on insurance it had issued.

http://www.slate.com/id/2213942/

Has AIG been set up as a "BAD BANK"?  A BANK sucking up the success and prosperity of future generations?  Is AIG profitable this quarter?  I'll guess it isn't, it's mostly owned by taxpayers.

Is there a transparency site on the web to show everyone in America where their tax dollars are going?  A site detailing all the transactions?  The selling off of assets?

Taxpayers being taken for a ride?  Setup to fail?

jmho

Are US taxpayers being set up as the GLOBAL bad bank?  Trillions in DEBT?

US taxpayers to fund all global development?  Fraud? Financial abuse by dictators and despots?

United States destroyed through greed and envy?

Why isn't Washington looking out for Americans?

Why isn't the Obama administration working FOR Americans?  I see lots of American money being spread around the globe...Americans are jobless, bankrupt, homeless in record numbers.

Who's on our side?
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All my posts are just my humble opinions.  Please take with a grain of salt.  Smile

It doesn't do any good to hate anyone,
they'll end up in your family anyway...
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