Posted on 01/24/2010 5:05:33 PM PST by Jet Jaguar
U.S. securities regulators originally treated the New York Federal Reserve's bid to keep secret many of the details of the American International Group bailout like a request to protect matters of national security, according to emails obtained by Reuters.
CRISIS IN CREDIT
The request to keep the details secret were made by the New York Federal Reserve -- a regulator that helped orchestrate the bailout -- and by the giant insurer itself, according to the emails.
The emails from early last year reveal that officials at the New York Fed were only comfortable with AIG submitting a critical bailout-related document to the U.S. Securities and Exchange Commission after getting assurances from the regulatory agency that "special security procedures" would be used to handle the document.
The SEC, according to an email sent by a New York Fed lawyer on January 13, 2009, agreed to limit the number of SEC employees who would review the document to just two and keep the document locked in a safe while the SEC considered AIG's confidentiality request.
The SEC had also agreed that if it determined the document should not be made public, it would be stored "in a special area where national security related files are kept," the lawyer wrote.
(Excerpt) Read more at reuters.com ...
Strange.
The exposure of the European banks and the implication for runs on the major banks of Europe and thereby the stability of Western Europe.
People in the US understandably focus on whether Wall Street banks got special treatment in the AIG fiasco, but the exposure of the European financial system at the time is the bigger story in my view.
Soros and cover up?
I don’t see Soros as involved, although if there was an opportunity to trigger disaster and profit from it, and he knew about it, he would, as we saw in the UK currency attack many years ago. I have not heard of any links between Soros and AIG.
thanks.
Do you really think Geitner knows nothing? And are they just using this National Security as a cover?
I believe Geitner knows all.
This is going to end very very badly.
By the way, the whole thing was to my mind essentially a second Marshall Plan for Europe courtesy of the US government via the bailed-out AIG.
That aspect of the story has been completely missed by the liberal media, because of their usual institutional biases, in my view.
Why didn’t the US get any credit for saving the financial system of Europe? I think because the US government elite bought into the argument that the purchase of such an immense amount of dodgy mortgage-backed securities by the European banks was somehow all our fault, and not the fault of the Europeans for not doing even rudimentary due diligence to examine the merits of the securities they were buying, and blind reliance on ratings.
Bump
Both should be given the Jacksonian treatment.
The SEC was explicitly created to provide transparency for investors, not to foster "national security" secrets. From the SEC's website:
The Investor's Advocate:
How the SEC Protects Investors, Maintains Market Integrity, and Facilitates Capital Formation
...
Tempted by promises of "rags to riches" transformations and easy credit, most investors gave little thought to the systemic risk that arose from widespread abuse of margin financing and unreliable information about the securities in which they were investing. During the 1920s, approximately 20 million large and small shareholders took advantage of post-war prosperity and set out to make their fortunes in the stock market. It is estimated that of the $50 billion in new securities offered during this period, half became worthless.
When the stock market crashed in October 1929, public confidence in the markets plummeted. Investors large and small, as well as the banks who had loaned to them, lost great sums of money in the ensuing Great Depression. There was a consensus that for the economy to recover, the public's faith in the capital markets needed to be restored. Congress held hearings to identify the problems and search for solutions.
Based on the findings in these hearings, Congress — during the peak year of the Depression — passed the Securities Act of 1933. This law, together with the Securities Exchange Act of 1934, which created the SEC, was designed to restore investor confidence in our capital markets by providing investors and the markets with more reliable information and clear rules of honest dealing. The main purposes of these laws can be reduced to two common-sense notions:
- Companies publicly offering securities for investment dollars must tell the public the truth about their businesses, the securities they are selling, and the risks involved in investing.
- People who sell and trade securities – brokers, dealers, and exchanges – must treat investors fairly and honestly, putting investors' interests first.
Monitoring the securities industry requires a highly coordinated effort. Congress established the Securities and Exchange Commission in 1934 to enforce the newly-passed securities laws, to promote stability in the markets and, most importantly, to protect investors.
(From http://www.sec.gov/about/whatwedo.shtml).
There's not a blessed word in the Securities Exchange Act of 1934 that gives the SEC any power to create "national security" secrets, and in fact, such behavior is in direct contravention of its charter.
Both the Fed and the SEC are behaving in direct contradiction of their charters, and both should be ended.
The big money market capital run of 2008 is hardly a secret. We bailed out our bad debt to Europe. They knew the risk and yet we still pay for it. There is no-way in hell this will get any more press than it has.
Ah, but there is indeed plenty of precedent, most notably with the Economic Warfare Division of the Treasury Department during World War II, which maintained huge volumes of classified economic records concerning U.S. banks and corporations.
There is indeed so many faultline covered up. Reflating economy is a futile exercise indeed.
As you said, this will end very badly.
It’s National Security all right. For those whose nation is Wall Street, Goldman-Sachs and other To Big To Fail banks.
Were the details to get out angry mobs with pitchforks and burning torches might well remove the vampire squid that has locked onto America from our body politic.
this stinks
Well...Duh!!
AIG=CIA
Now you know.
On first blush and and a speed glance; it does seem odd.
I think more details would be helpful.
Thanks for the information & post. BTTT!
All should read this and look at where our money may have gone!
A member company of American International Group, Inc.
http://www.aigmemsa.com/aig/takaful/faqs.jsp
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