| Billions of Taxpayer Dollars Wasted on AIG Bailout |
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| by Tom McGregor | Tue, Nov 17, 2009, 12:42 PM |
 Last fall, the Federal Reserve's initial emergency plan to save the then-failing American International Group was so frantically put together and poorly-structured that billions of additional taxpayer dollars were inerrently funneled to the insurance giant, as disclosed in a new report by a Treasury Department independent watchdog.
The Washington Times reports that, "the plan - coordinated by the then-head of the Federal Reserve Bank of New York (FRBNY) Timothy F. Geithner, who now serves as Treasury Secretary - allowed too much leverage to AIG counterparties, while significantly handcuffing the Federal Reserve's negotiating power, according to an audit released Tuesday by Neil Barofsky, special inspector general for the Troubled Asset Relief Program (TARP)." The audit said, "the decision to acquire a controlling interest in one of the world's most complex and troubled corporations was done with almost no independent considerations of the terms of the transaction or the impact that those terms might have on the future of AIG." The audit claims that even though the Federal Reserve's initial $85 billion credit line to AIG helped the corporation settle many of its outstanding contracts with outside parties, "it's terms were unworkable." According to the Washington Times, "the Fed failed to persuade most parties engaged in credit-default swaps with AIG to agree to certain concessions, forcing the Fed to pay full-market value of the swaps, an amount far above the going-rate at the time." The report said, "there is no question that the effect of the FBRNY's decision - indeed, the very design of the federal assistance to AIG - was that tens of billions of government money was funneled inexorably and indirectly to AIG's counterparties." To read the entire article from the Washington Times, link here: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
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written by Steve Heath , November 18, 2009 Recent reports show that some counter parties offered to accept less, but Geithner refused their offers. I guess if he accepted less from some, that would have out pressure on Goldman sachs to accept less than 100% of the $13 billion AIG money they received courtesy of the taxpayer. I guess we will get some of that back on personal tax receipts from the $20 billion plus Goldman has just announced they will pay their employees in 2009 bonuses. America is truly the land of opportunity - at least for the Banksters. Write comment
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