Posted on 10/29/2009 8:18:02 AM PDT by FromLori
When the historians finally finish sorting through the appalling decisions that have been made in the past two years, this one will probably be at the top of the heap.
Last fall, as AIG began to realize how screwed it was, it started negotiating with the counterparties to all the credit default swaps it had written. One of the AIG's goals was to persuade these counterparties-
These sorts of negotiations are exactly what should happen when a company gets in trouble. It goes to its creditors and says, look, we can't pay you everything, so here's your choice: Take something, or take your chances in banktuptcy court. (And, in this case, this wouldn't have been much of a choice, given the standing of CDS holders in the liquidation line).
But then Tim Geithner, head of the New York Fed, stepped in.
A few weeks later, the counterparties--all of whom voluntarily did business with AIG and understood the risks--were bailed out at par: 100 cents on the dollar.
Thus began the most nauseating giveaway in the history of the country.
By Sept. 16, 2008, AIG, once the world’s largest insurer, was running out of cash, and the U.S. government stepped in with a rescue plan. The Federal Reserve Bank of New York, the regional Fed office with special responsibility for Wall Street [run by Tim Geithner], opened an $85 billion credit line for New York-based AIG. That bought it 77.9 percent of AIG and effective control of the insurer.
The government’s commitment to AIG through credit facilities and investments would eventually add up to $182.3 billion.
Beginning late in the week of Nov. 3, the New York Fed, led by President Timothy Geithner, took over negotiations with the banks from AIG, together with the Treasury Department and Chairman
(Excerpt) Read more at businessinsider.com ...
LOL at the headline! Reminds me of a job application that was turned in once, the girl did not have enough space in box to finish her thought. “Reason for Leaving Prior Job: Got Laid”
So where was George Bush while this was happening?
Aided and abetted by O and his cronies.
I just loved it when Geithner blamed our current mess on last year's bank regulators. Remind me again what job Geithner held around this time last year?
I wonder if Geithner knows any Chinese cuss words? He’s fluent in Mandarin.
Delegating to others, as was his style. The delagatees screwed him on this one, which is his fault in the end. He was simply too hands off for his own good.
He is nothing more than scum him and his masters obama, goldman sachs, jpmorgan and now the plan is to give them more power and control and bailouts on our money forever!
http://www.washingtonsblog.com/2009/10/government-trying-to-create-permanent.html
Ah, yes. The Buck Stops Nowhere.
Every mention of Geithner should include photos of him. I think he is really creepy looking. THat sly countenance looks like ihe is hiding a big secret — like the cat who swallowed the canary.
Now that the crisis has past..there is no reason that money can’t be clawed back from the beneficiaries of those contracts.
Goldmann was the benefactor of our nations largesse.
Yes sweet how that worked wasn’t it the two major players who benefited the most home free with geithners/obamas blessings and help!
Benefactor of obama I look at is as payback for all they gave him through the years.
From Wiki:
On 10/27/09 it was reported by Bloomberg news[21] that while acting as president of the New York Federal Reserve Tim Geithner arranged for Goldman Sachs, Société Générale, and Deutsche Bank to receive full payment on credit default swaps they had purchased rather than 40 cents on the dollar insurance giant AIG proposed.
A Fed-run entity called Maiden Lane III was used to shunt these CDOs, which cost American tax payers at least $13 billion dollars at the time. It is currently estimated that due to a decline in value, the total costs for this bank favoritism case cost the American tax payers $35.6 billion total.
To quote Bloomberg: “the deal contributed to the more than $14 billion that over 18 months was handed to Goldman Sachs, whose former chairman, Stephen Friedman, was chairman of the board of directors of the New York Fed when the decision was made.”
!!!!!!!!!!!!!!!!!!!
Business Insider links to this:
www.bloomberg.com/apps/news?pid=newsarchive&sid=a7T5HaOgYHpE
add http in front and read -— it is amazing that they can do this, make millions, donate all those millions to whatever Dem pol they chose,
and never get indicted or even reprimanded !!!!!!!!!!!!!!!!
5.4 Million $$$$ on a single HIGHLY ILLEGAL trade !!!
Wow.
Sucks doesn’t it that we have to pick up the tab! No class warfare they have NO CLASS having robbed us the taxpayer!
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