Foreign Bank Bailout (4.00 / 1)

I am surprised that very few people are upset that AIG is being used to funnel money to foreign banks.

STEPHANOPOULOS: So what's the problem with the public health option?
LANDRIEU: Well, many of us believe, George, that it will undermine the private insurance system.

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by: bang @ Thu Mar 19, 2009 at 09:30:31 AM CDT

"one of the biggest transfers of taxpayer wealth to Europe since the Marshall Plan" (0.00 / 0)

and to just a very few banks there, too --

on who really should be hauled before Congress -- http://www.slate.com/id/2214107/ -- They Got the Wrong Guy

... Congress should also hear from the many AIG counterparties who together have received billions of dollars of taxpayer funds so far through AIG. These folks bought insurance from or did business with a company that was unable, as it turned out, to make good on its financial commitments. And yet because the government didn't let AIG file for Chapter 11 bankruptcy protection, these counterparties have been made whole. I'd like to hear Goldman Sachs CEO Lloyd Blankfein tell Congress why it was appropriate for taxpayers to make a payment to Goldman of $5.6 billion in credit-default swaps, and why Goldman shouldn't eat at least a portion of the losses it would have suffered had the taxpayers let AIG fail. It would be nice to hear from the half-dozen German banks, including the state-owned Landesbank Baden-Wuerttemberg, who have benefited from one of the biggest transfers of taxpayer wealth to Europe since the Marshall Plan. Or from executives at Citadel, the beleaguered hedge fund that received $200 million in payments from AIG's securities-lending business. They should be duly sworn in and forced to explain why taxpayers should pay these claims just because their firms bought insurance without determining whether the insurer could pay the claims.  ...

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by: amberglow @ Thu Mar 19, 2009 at 12:49:18 PM CDT

[ Parent ]

Accountability (4.00 / 2)

and the lack thereof is what is driving people crazy about the bailout process.  The fact that Ken Lewis still has a job is outrageous.

The fact that Goldman Sachs got over $10 Billion from the AIG Bailout at the same time the Treasury Secretary was a former Goldman Sachs CEO is outrageous.

I don't doubt the bailouts were needed (I may be in a small minority here on that) but the obvious conflicts of interest in this process are simply way beyond the pale.  

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by: fladem @ Thu Mar 19, 2009 at 09:40:51 AM CDT

I used to agree with you (4.00 / 1)

"I don't doubt the bailouts were needed (I may be in a small minority here on that) "

On the issue of whether, or not, this bailout was actually necessary. Its the stories to the effect that the banks are sitting on the TARP funds and not lending them that begin to induce doubt in my mind. But the real kicker is when the Treasury tells us that they can't put too many restrictions on the TARP money because they are afraid that the banks won't participate in the program if they have to deal with the limits and requirements. I mean, excuse me, but I thought that the banks could not survive without the bailout, now it seems like only one option for them.  

Long story short, they are undermining my confidence (which I admit was in short supply, anyway) in the veracity of their words.  

"It sounds wrong...
     ...but its right."

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by: SpitBall @ Thu Mar 19, 2009 at 11:25:45 AM CDT

[ Parent ]

It is inconceivable to me (4.00 / 1)

that Obama has chosen -- yes, chosen -- to go down this path of opening up the nation's treasury to pay off the CDS traders.

For a guy who is allegedly not only smart and deliberate but also incredibly politically savvy, Obama is just bungling this entire process.

Obama gives the appearance of someone who simply takes at face value whatever Summers, Geitner, and his buddies at UBS and various hedge funds tell him.  His attitude is like "I've got these really bright guys here, but don't worry, I also bounced that latest Krugman editorial off of Summers before I decided to hand over 1% of our GDP to AIG."  I want to see a President AGONIZING over this.  The attitude should be "What is the bare minimum that American taxpayers should spend in order to keep the entire financial market from collapsing?"

Obama has also utterly failed to make legal and regulatory accountability for the meltdown of coequal importance with staving off financial disaster.  The public would not be nearly as outraged if, alongside with headlines of bailout money, Wall Street crooks were being frog-marched to prison.  Hell, Obama could act least act like he is outraged over the lax oversight provided by Bush's SEC.  Which leads me to...

Obama's failure to put any daylight between him and Bush.  Sure, we all know that it is ridiculous to blame Obama for a disaster that was created on Bush's watch.  And if Obama wanted to make that argument, he easily could.  But Obama has chosen -- again, chosen -- to jump into bed with Summers, Geithner, and Bernanke.  He has chosen to not criticize Paulson.  He has chosen to basically adopt the Bush position on the mess.  If Obama had been President the last 8 years a lot of things would have been better, but I now have no reason to believe that we would not be facing the exact same problem with the CDS-market meltdown and bailout.  

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by: space @ Thu Mar 19, 2009 at 09:50:49 AM CDT

to be fair (0.00 / 0)

We own ~80% of AIG at this point too.  We'll be recouping some of those costs as it's reprivatized.

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by: ccarollo @ Thu Mar 19, 2009 at 14:52:22 PM CDT