How the Fed Bungled AIG's Rescue, Enriched Bankers and Screwed Taxpayers (Tax CHEAT TIMMY!)

It is by now well known that the banks on the other side of credit default swaps sold by AIG got paid out at par when the government bailed out the insurance giant.

But what isn't as well known is that by deciding to pay AIG's counter-party in full, the Federal Reserve was reversing months of work AIG executives had done to convince the banks to take a haircut on their positions

Bloomberg reports that the documents were similar to those drafted by AIG, except for one crucial detail.

Part of a sentence in the document was crossed out. It contained a blank space that was intended to show the amount of the haircut the banks would take, according to people who saw the term sheet. After less than a week of private negotiations with the banks, the New York Fed instructed AIG to pay them par, or 100 cents on the dollar. The content of its deliberations has never been made public.

The New York Fed’s decision to pay the banks in full cost AIG -- and thus American taxpayers -- at least $13 billion. That’s 40 percent of the $32.5 billion AIG paid to retire the swaps. Under the agreement, the government and its taxpayers became owners of the dubious CDOs, whose face value was $62 billion and for which AIG paid the market price of $29.6 billion. The CDOs were shunted into a Fed-run entity called Maiden Lane III.

This story is gaining traction by the hour, and the implacations could be huge. The sitting TREASURY SEC of the USA may have conspired with Goldman Sachs to DEFRAUD the taxpayers of this country.

This could be a scandal which destroys the Obama Presidency. People need to ask themselves WHY Geithner had to be confirmed AFTER he was exposed as a tax cheat? Remember how the MSM and Obamacons said he was so intimately involved with the financial rescue as head of the NY Fed, that he was about the ONLY one up to the job?

Now we know the real reason, it was to try and have him cover his tracks at Treasury as Goldman had looted 13 billion in taxpayer money, and their former CHAIRMAN had bought MILLIONS of dollars of stock AFTE he found out GS was going to be paid 100cents on the $ for their claims against AIG. This guy sat on the BOARD OF THE NY FED while Tax Cheat Timmy screwed us. Then he engaged in INSIDER trading to line his pockets. When he was exposed ,was he led off in handcuffs like Bernie Madoff? No, he was jusr forced to resign from the Board of the NY FED.

Disgusting, criminal, corrupt to the core. Will the MSM follow up on this? I think maybe so, because it is just too juicy to pass up.

Still no sign of TAX CHEAT TIMMY’s signature on any money in my wallet. Plenty of Snow’s though.

Bills of all denominations are getting rattier and rattier.

Why is not the Fed pulling them from circulation?

Because this administration does not want Americans to have a daily reminder of the corruption in Washington by handling bills with TAX CHEAT stamped or written on every dollar bill bearing Timmy’s name.

Bush and Obama’s boy Geithner (Bush appointed him to the New York Fed) is probably no different than every other Free Trader Globalist that is involved with the government.

So many supported the Anti-American bailout of AIG...and still many on here want Taxpayer money to go to bonuses for their failed executives.

Economic Anti-Americanism....whether from the GOP or DNC....is killing this nation

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