AIG

Don't Go There AIG!

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moneyhatThe most incredible headline flashed across the screen, AIG is thinking of suing the Federal Government for bailing them out. This is the company at the heart of financial contagion. AIG had created derivative dominoes where if one financial institution failed, that one institutional failure would trigger credit default swaps derivatives which in turn would collapse the entire global system.

Everything's #@%*ed Up and Nobody Goes to Jail

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Rolling Stone investigative Journalist Matt Taibbi has done it again, writing a knock down, drag out piece asking Why Isn't Wall Street in Jail? It becomes evident if you are rich, acting behind the cover of a corporation, you can get away with pretty much anything. Regular poor people, stealing a bike or a purse, you're going to jail with a felony conviction and a fine larger than your income.

 

Who Could Forget AIG? The U.S. Treasury Sure Wants To

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Who could forget AIG? The never ending bail outs, the fictional derivatives, the funneling of U.S. taxpayer money to foreign banks, the outrageous bonuses and most of all, TARP. Yet it seems the Obama administration wants you to do such that. It seems the Treasury department planning to dump off AIG by the end of the year. What they are not telling you is the total taxpayer losses.

Bloomberg:

The biggest part of that strategy is for Treasury to begin converting its $49 billion preferred stake into common stock for sales by the first half of next year.

Common stock means no dividend, coming in last in the shareholder pig trough and taking a financial bath.

The Wall Street Journal is reporting the deal consists of:

The U.S. Treasury converting some of its $49 billion in AIG preferred shares into common stock. Then the stock can be sold over time. The conversion, which could take place at about $35 an AIG share, is likely to occur in the first half of 2011.

Why is Treasury converting to common stock? Is it to extend TARP de facto, allowing them to hold on to 2011, all the while making it appear they got out of the AIG bail out biz by 2010?

TARP Money Helps Foreign Nations

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Yet another month, yet another report on how our money was used to bail out foreign banks, while we go without retirement and jobs.

The Congressional Oversight Committee has released a new report, The Global Context and International Effects of the TARP.

Guess what?

It appears likely that America‟s financial rescue had a much greater impact internationally than other nations‟ programs had on the United States.

Gets better. Of course the U.S. didn't bother to ask other nations to help...

if the U.S. government had gathered more information about which countries‟ institutions would most benefit from some of its actions, it might have been able to ask those countries to share the pain of rescue. For example, banks in France and Germany were among the greatest beneficiaries of AIG‟s rescue, yet the U.S. government bore the entire $70 billion risk of the AIG capital injection program. The U.S. share of this single rescue exceeded the size of France‟s entire $35 billion capital injection program and was nearly half the size of Germany‟s $133 billion program.

And even better. Of course to this day the U.S. Treasury isn't collecting data on our taxpayer dollars flowing overseas.

Treasury gathered very little data on how TARP funds flowed overseas.

What's a capitalist to do?

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AIG's Joe Cassano - An American Tragedy

By Numerian

What’s a capitalist to do when he loses $500 billion and almost single-handedly destroys the global economy? In Japan you would bow deeply in public and express the deepest possible remorse and shame, that is if you already had not committed seppuku. In America, where the Ayn Rand ethos of objectivism reigns supreme, you weasel your way out of any explanation or regret, while riding off in the sunset with your undeserved fortune.

Joe Cassano, former CEO of AIG Financial Products, could have chosen the Ronald Reagan Alzheimers defense: “I have forgotten everything that happened.” That was the route taken by AIG Chief Risk Officer Robert Lewis, when he along with Cassano appeared yesterday before the Financial Crisis Inquiry Commission. Lewis, unlike Reagan, had to act like he actually had Alzheimers to make this defense plausible.

Cassano could have used the “I was too dumb to know what I was doing” defense, which would have at least have been plausible. Instead he chose to brazen it out in front of the Commission, arguing that everything he did was perfectly correct and legal, and any losses were the fault of somebody else.

We know everything he did was perfectly legal, because both the SEC and the FBI have dropped any plans to charge Cassano with criminal activity, which was one reason he was able to appear before the Commission and be so openly unrepentant for what happened. We also know that nothing he did was correct, which even a cursory reading of the public record will reveal. Cassano built an untenable portfolio of credit default swaps, selling these insurance contracts to banks around the world anxious to protect themselves if the US housing market tanked. He earned billions in fees for AIG and $300 million in bonuses for himself, but when the housing market did indeed tank, his losses totaled half a trillion dollars and destroyed AIG in the process. AIG was taken into the bosom of the US Treasury, and the American taxpayer made good all the losses the banks would have experienced had AIG been thrown into the bankruptcy courts.

COP Report on AIG and Congressional Hearing with Geithner

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The Congressional Oversight Committee released a report on AIG last week. But before we get into those damning facts, check out the below video clip of Elizabeth Warren trying to confront Timothy Geithner on the failure of HAMP. Notice how 1 million people losing their homes goes in one ear and out the other as Treasury Secretary Geithner rambles on in response.

 

 

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