Not a single comment? If this is true, which the zerohedge link provides conclusive details suggesting it is...
Rome is burning, but the good citizens don’t even smell smoke?
Yep and the cattle cars are pulling into the station while the ovens are being stoked. Now I understand how 6,000,000 Jews stood by and allowed themselves to be exterminated.
What smoke, it’s too dark here and has been for decades.
More proof of the fraud!
Bernanke Bombshell: AIG Insurer Exposed to FP
In researching and think about AIG, I have been writing about them as if it were two separate companies: A well regulated Insurer, and a rogue derivatives products firm (FP).
The working assumption has been that the regulated insurer was run fairly conservatively, and the structured financial product side run like a giant hedge fund. The 32% net profit retention on the FP side is actually better than what most hedge funds see.
This dichotomy is mostly true, but with now has an interesting twist to it. In congressional testimony today, Ben Bernanke implied that had the Fed allowed AIG too fall, he detailed what might have happened had AIG been allowed to fail:
The Federal Reserve and the Treasury agreed that AIG’s failure under the conditions then prevailing would have posed unacceptable risks for the global financial system and for our economy. Some of AIG’s insurance subsidiaries, which are among the largest in the United States and the world, would have likely been put into rehabilitation by their regulators, leaving policyholders facing considerable uncertainty about the status of their claims. State and local government entities that had lent more than $10 billion to AIG would have suffered losses. Workers whose 401(k) plans had purchased $40 billion of insurance from AIG against the risk that their stable value funds would decline in value would have seen that insurance disappear. In addition, AIG’s insurance subsidiaries had substantial derivatives exposures to AIG-FP that could have weakened them in the event of the parent company’s failure.
If we are to take Bernanke at face value, he is saying that AIGFP had buried their own firm with junk paper. BB does not define what “substantial derivative exposure” meant — but given the $2.7 trillion dollars in derivatives exposure that FP had, even a tiny percentage might amount to an enormous sum.
That the collapse of AIG Financial Products would have damaged the other Insurance half of the firm is a frightening development.
Most Frightening indeed but what is even more frightening is The Resident continues to give them and his other Contributors so much of your money! When he moved on UP he brought a lot of baggage with him!
Lori
Source:
Chairman Ben S. Bernanke on American International Group
Before the Committee on Financial Services, U.S. House of Representatives, Washington, D.C.
March 24, 2009
http://bluelori.blogspot.com/2009/03/no-banker-left-behind.html