Treasury Hid A.I.G. Loss, Report Says

The United States Treasury concealed $40 billion in likely taxpayer losses on the bailout of the American International Group earlier this month, when it abandoned its usual method for valuing investments, according to a report by the special inspector general for the Troubled Asset Relief Program.

“In our view, this is a significant failure in their transparency,” said Neil M. Barofsky, the inspector general, in an interview on Monday.

In early October, the Treasury issued a report predicting that the taxpayers would ultimately lose just $5 billion on their investment in A.I.G., a remarkable outcome, since the insurance company was extended $182 billion in taxpayer money in the early months of its rescue. The prediction of a modest loss, widely reported as A.I.G., the Federal Reserve and the Treasury rushed to complete an exit plan, contrasted with an earlier prediction by the Treasury that the taxpayers would lose $45 billion.

Members of Congress who have been critical of the federal bailouts jumped on Monday to commend the special inspector general and challenge the varying numbers.

“If a private company filed information with the government that was just as misleading and disingenuous as what Treasury has done here, you’d better believe there would be calls for an investigation from the S.E.C. and others,” said Representative Darrell Issa, the senior Republican on the House Committee on Oversight and Government Reform. He called the Treasury’s October report on A.I.G. “blatant manipulation.”

Senator Charles E. Grassley of Iowa, the senior Republican on the Finance Committee, said he thought “administration officials are trying so hard to put a positive spin on program losses that they played fast and loose with the numbers.” He said it reminded him of “misleading” claims that General Motors had paid back its rescue loans with interest ahead of schedule.

lol me too and let’s add this loss to our loss at CITI FRAUD

Taxpayers Lose $2.3 Billion with CIT Bankruptcy

http://www.propublica.org/article/taxpayers-lose-2.3-billion-with-cit-bankruptcy

and

U.S. taxpayers could be on the hook for up to another $215 billion in aid to housing finance giants Fannie Mae (OTC BB:FNMA.OB - News) and Freddie Mac (OTC BB:FMCC.OB - News) through 2013, their regulator said on Thursday.

The companies, which were seized by the federal government in September 2008 to save them from collapse, will likely have total capital needs of between $221 billion and $363 billion through 2013, the Federal Housing Finance Agency estimated.

http://finance.yahoo.com/news/Fannie-Freddie-may-need-215-rb-2323937639.html?x=0

Pretty soon all those lost BILLIONS will add up to real money

Two Sets Of Books: A Felony For Everyone But Timmy

Found in a 338-page release from SIGTARP (which, incidentally, is about as nasty a piece written about a Treasury Secretary by another government body as I’ve ever read - and is worth reading, if you can find the time for it) comes the following:

“While SIGTARP offers no opinion on the appropriateness or accuracy of the valuation contained in the Retrospective, we believe that the Retrospective fails to meet basic transparency standards by failing to disclose: (1) that the new lower estimate followed a change in the methodology that Treasury had previously used to calculate expected losses on its AIG investment; and (2) that Treasury would be required by its auditors to use the older, and presumably less favorable, methodology in the official audited financial statements.”

Oh really Turbo? Let me put this one in English for you.

In the civilian world it is illegal to present one set of books to your investors, and another to the IRS. That’s called tax fraud and, if you’re a publicly-traded company, securities fraud. It exposes you to a nice date with Bubba at the Graybar Motel, and it should.

But government does this sort of thing all the time. It also allows firms it controls to do this. Remember the infamous “GM” claims that “it had paid back all of the taxpayer money”? Well sure, technically - but they did so by borrowing other money - from the taxpayers! Only in Government is taking a $20 from your left pocket and putting it in your right pocket “paying off a loan.”

In the rest of the world we call this what it is: A scam.

Then there’s the view on HAMP. Treasury argues that every single modification (including trials) is a success, making the claim that “every single person who is in a temporary modification is getting a significant benefit.”

This is a bald lie. For those who are in temporary modifications but either fall out of the program or fail to qualify for permanent reductions, for any reason whatsoever, the entire amount they do not pay during the modification period is then past-due and payable, and worse, subject to late fees and charges.

In states and/or circumstances where there is a possibility of deficiency judgments delaying the inevitable loss of the home means that the homeowner will be exposed to a larger deficiency judgment than would otherwise be the case. This is not a benefit, it is a government-operated scam.

Barofsky makes his case well in these 300+ pages, and while the detail-level material is good reading, it is dry. The point - and the take-away - is that Treasury, contrary to their claims, has become part of the financial system asset-stripping schemes of Wall Street, and is now actively helping the banks screw the American people.

If Geithner had any sense of honor, he would commit Seppuku. If Obama had any sense of propriety or concern for the American People, he would fire Geithner this morning.

Clearly, neither is the case.

http://market-ticker.org/akcs-www?post=170317

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.