Gheitner To A.I.G.: "Keep It A Secret"

by **J.B.** on Thu 07 Jan 2010, 7:37 pm

How soon before the media quietly sweeps this bombshell under the rug, while pumping us with news about Lady Gaga or some other bullshit?

Geithner’s New York Fed Told AIG to Limit Swaps Disclosure

Jan. 7 (Bloomberg) -- The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.

AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100 cents on the dollar for credit default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008. The e-mails were obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.

The New York Fed took over negotiations between AIG and the banks in November 2008 as losses on the swaps, which were contracts tied to subprime home loans, threatened to swamp the insurer weeks after its taxpayer-funded rescue. The regulator decided that Goldman Sachs and more than a dozen banks would be fully repaid for $62.1 billion of the swaps, prompting lawmakers to call the AIG rescue a “backdoor bailout” of financial firms.

“It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information,” said Issa, a California Republican. Taxpayers “deserve full and complete disclosure under our nation’s securities laws, not the withholding of politically inconvenient information.” President Barack Obama selected
Geithner as Treasury secretary, a post he took last year.

Despite the blatant nature of this overt criminal behavior, somehow I lack the confidence that the media watchdog will be all over this...

http://www.bloomberg.com/apps/news?pid=20601087&sid=agWH9TNvdUCg

by **J.B.** on Thu 07 Jan 2010, 7:45 pm

by garyd on Fri 08 Jan 2010, 3:50 am

And thanks mostly to a contest started by Fannie And Freddie as to who could write the most really crappy home loans that were almost certainly going to default.

by **J.B.** on Fri 08 Jan 2010, 1:04 pm

Actually, those Fannie and Freddie guidelines (I was a mortgage broker back in the day) were written by the Clinton administration, with their "Social Justice" programs for minorities and low income families.

It all comes down to the concept of entitlement, and the idea that owning a home- much like health care- is a "right", rather than a "privilege".

The buck stops with Liberal Progressives.

by garyd on Sat 09 Jan 2010, 1:56 am

The same Clinton alles were running Fannie and Freddie at the time and also worked in the Obama campaign...

by **PhunkyPhishStyle** on Fri 15 Jan 2010, 3:21 am

Dam. I am shocked.

by patom on Sun 17 Jan 2010, 11:08 am

Actually Fannie and Freddie didn't write any loans. They were written by your local friendly bankers and mortgage companies, with the full knowledge that they were taking NO risks and that they would dump them in bundles onto Fannie and Freddie.

Please don't ask me to sympathize with the banks for their blatent thievery.

by garyd on Tue 19 Jan 2010, 1:54 am

What you are saying is technically true but the reality is that Fannie and freddie underwite those loans and guarantee them. And it is under their rules that such loans are approved or denied ergot ultimately the loan is Fannie and Freddies for all practical purposes.

by **J.B.** on Thu 28 Jan 2010, 1:14 pm

Tim Geithner, theUS Treasury Secretary (and former head of The New York Federal Reserve Bank) was running the Federal Reserve Bank of New York at the time when it orchestrated the bail out of AIG- a move that later fueled frenzied and extravagant bonuses and lavish retreats to upscale resorts, in a free-for-all money grab at the top of the failing insurance giant. AIG executives not only spent hundreds of millions of those taxpayer dollars on luxury furniture, rare art, and penthouse refurbishing, they also handed over a substantial amount of that money to other financial organizations (most of which promptly issued that money to its executives as well). For months, New York was an orgy of champagne, Rolex watches in gift boxes, private jet orders, and swollen paychecks... all on the taxpayer dime.

Immediately following the Geithner-orchestrated banker bailouts, the bonuses for year-end 2008 were some of the highest ever reported in the history of Wall Street. Over a year later, banks have not begun lending, but they have continued to prosper; it was reported that some 2009 year-end bonuses [size=9]topped 8 figures.[/size] Bankers are still putting down payments on private islands, while the US experiences 15% unemployment rates in some places, and well over 10% overall. Add to that the number of underemployed, and the number skyrockets to nearly 16% of the population.

Now it has emerged that, despite the tax evader's denials, Tim Geithner appears to have been directly responsible for instructing AIG to hide information from Congress and the the US citizens. Geithner is directly responsible for the secrecy surrounding AIG's actions in the earliest days of the "financial crisis". And we all know that bankers operating in secret, while handling billions of taxpayer dollars is an indicator of integrity and honesty.

• $182bn AIG bailout a tragic choice, says Timothy Geithner
• Congress furious at Geithner for repaying AIG's bank loans

The US treasury secretary Timothy Geithner was accused of incompetence, obfuscation and of making "lame excuses" during a furious hearing on Capitol Hill over the government's contentious bailout of the sprawling insurer AIG.

In an unusually ill-tempered confrontation, members of Congress from both parties rounded on Geithner over a decision to use taxpayers' money to pay out the full $62bn (£38bn) owed by AIG to banks such as Goldman Sachs, Merrill Lynch, Barclays and RBS. Geithner described the AIG bailout, which cost a total of $182bn, as a "tragic choice" at the height of the global financial crisis in September 2008 but said that at the time, there was a risk of "utter collapse" of the US economy.

"For the first time in 80 years, the United States risked a complete collapse of our financial system," said Geithner. "Americans were starting to question the safety of their money in the nation's banks, and a growing sense of panic was producing the classic signs of a *generalised run."

http://www.guardian.co.uk/business/2010/jan/27/aig-bailout-timothy-geithner

by garyd on Fri 29 Jan 2010, 2:52 am

Bonuses are how top sales people get rewarded, for every guy AIG had involved in the derivatives and other money making scemes of that sort (which would by the way have made money had the SEC properly rated those derivatives) they have ten people selling insurance. Insurance companies historically keep their rates down, in what is historically a very cuthroat business, by investing premiums heavily in stocks and bonds and various derivatives, which tends to make them extraordinarily vulnerable when the markets go south as they did in beginning in late 2007.

You don't reward your top people well they will find someplace that will.

by Night Stryker on Fri 29 Jan 2010, 3:24 pm

Indeed. Even beyond that, bonuses make up the vast majority of someone's pay in some industries (such as, surprise surprise, investment banking). Remember those 95-99% bonus taxes? Yeah, those were taxes on 90% of people's income for the year, people who weren't necessarily executives or even doing anything questionable.

by **J.B.** on Fri 29 Jan 2010, 3:52 pm

Night Stryker wrote:Indeed. Even beyond that, bonuses make up the vast majority of someone's pay in some industries (such as, surprise surprise, investment banking). Remember those 95-99% bonus taxes? Yeah, those were taxes on 90% of people's income for the year, people who weren't necessarily executives or even doing anything questionable.

Right. Defend the executives who spent

$1 MILLION on OFFICE REFURBISHING with OUR MONEY.

Do you know what kind of a waste of money it is, to spend A MILLION DOLLARS... and not on a house, not on an office complex... but on an OFFICE REFURBISHING PROJECT- a place where you go to work for a few hours a day, and you aren't even BUILDING it, you are outfitting it with golden toilets, and $15,000.00 garbage cans!

That was taxpayer money.

How about you, Night Stryker? Are you o.k. with AIG buying GOLD garbage cans for their executives with your personal taxpayer money?

http://www.trendhunter.com/trends/gold-garbage-bin
(NSFW)

by Night Stryker on Fri 29 Jan 2010, 4:04 pm

Strange, I thought you were better at reading comprehension than that. I didn't defend executive waste, or executive anything for that matter. My point, since you seem to be unable to figure it out, was that a lot of people that receive bonuses are middle managers and people in highly competitive positions such as salesmen and traders, not just C-level execs. Hell, back home, about half of what the local Wal-Mart store manager made was in bonuses. So with all these non-execs being paid via bonuses, it is unfair, unethical, and unAmerican to victimize them because you want to villainize their bosses.

Did wasteful spending happen? Sure, there are bastards in the private sector just like in the public, and I find execs comparable to Congressmen. However, there's no reason for a midlevel salesman to lose his pay for the year because the government took it with an ex-post-facto tax. Or do you support you losing your job because your boss's boss is an asshole?

by **J.B.** on Fri 29 Jan 2010, 4:12 pm

Right, but we don't give a shit about the measly $10K bonuses being issued to middle managers.

I've been a mid-level manager before, and my wife is now a director with a Fortune 100 company. We both know what it takes to earn a bonus. And neither of us have ever earned an 8-figure bonus. In fact, I'd venture to say that NO mid-level manager or banker earns an 8-figure bonus; probably a TINY handful of them have ever recieved even a 7 figure bonus. We aren't talking the rank and file that recieved $10K to $50K bonuses.

We're talking the ones at the top that willingly and knowingly orchestrated this HEIST with Tim Geithner.

And, I'll just remind you that I don't care about who earns what, so don't lecture me about "Anti-American" bullshit. I couldn't care less about how much someone gets paid; that's not what this is about.

This is about TAXPAYER MONEY getting used to throw lavish parties and pay for doeskin-appointed leather seated, mahogany & teak trimmed private jets for shitbags who ran their company into the ground.

They shouldn't get bonuses. They should be fired, arrested and tried for any one of a hundred different white-collar crimes.

All the garbage they bought should be sold and the money returned to We The People.

by garyd on Fri 29 Jan 2010, 7:17 pm

Given that the overwhelming majority of said bonus money went to midlevel managers who, in general get a crap load more than ten grand an ought to since they help generate most of the sales in a good year, So they spent a million bucks refurbishing there coporate office.

Yeah I want my penny back tight now.

Oh way my share isn't even a penny. And lets not forget that office redo probably generated more jobs than anything else the Obamanator has done in the last year....

Gheitner To A.I.G.: "Keep It A Secret"

Gheitner To A.I.G.: "Keep It A Secret"

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