In a December New York Times op-ed, we called for the full public release of AIG email messages, internal accounting documents and financial models generated in the last decade. Today, a Bloomberg story revealed that under Timothy Geithner's leadership, the Federal Reserve Bank of New York told AIG to withhold details from the public about its payments to banks during the crisis. This information was discovered when emails between the company and the Fed were requested by representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.
The emails requested by Issa span five months beginning in November 2008. The Fed's request to suppress this information would not have come to light without the release of these emails. If five months of emails reveal information key to our understanding of the aftermath of the crisis, imagine what 10 years of emails could contribute to our understanding of its causes. We believe the AIG emails and other internal company documents are the 'black box' of the financial crisis -- if we understand the failure of AIG, we will more fully understand the crisis - what caused it and more importantly how to prevent it from happening again.
As such, today we are renewing our request for the full public disclosure of all AIG documents. We believe the government should put these documents on-line, thereby establishing an open-source investigation that would allow journalists and citizens the opportunity to piece together the story of what happened at AIG and in so doing more fully understand what happened in the broader financial collapse. AIG - and more specifically its credit-default swaps exposure - was an important contributing factor to the crash of the financial markets. What sets this company apart from others that played a role in the crisis is that we, the taxpayers, own it. As we noted in our original piece, US taxpayers bought 80% of AIG when they bailed the company out with $180 billion last year. As owners of the company, taxpayers are also owners of AIG. As owners of the company we can demand the release of these documents.
The taxpayer's stake in AIG is held by the A.I.G. Credit Facility Trust, whose three trustees are Jill M. Considine, a former chairman of the Depository Trust Company and a former director of the Federal Reserve Bank of New York; Chester B. Feldberg, a former New York Fed official who was chairman of Barclays Americas from 2000 to 2008; and Douglas L. Foshee, chief executive of the El Paso Corporation and chairman of the Houston branch of the Federal Reserve Bank of Dallas. We call on these three officials (interestingly all former Fed officials) to immediately release the documents we request.
The value of these documents, if it were ever in doubt, was certainly proved by today's revelations.
Release the emails.
The latest revelations about the New York Fed's actions in the AIG bailout make one thing clear: Treasury SecretaryTim Geithner must go.
Geithner must go not just because of the emails showing that his New York Fed ordered AIG to keep details of the bailout secret, but because of many other decisions and policies he has championed in the past two years.
These decisions and policies have consistently put the interests of Wall Street ahead of the interests of the taxpayer, and they have undermined the public's confidence in the government at a time when the country needs it the most.
Tim Geithner's defense of his actions continues to be, in effect, "We had to do it or the world would have ended." This isn't good enough. It is also, at the very least, debatable.
It is true that Tim Geithner made many of his decisions in the midst of a crisis, and I do not doubt that his intentions were good and that he was doing the best he could. But this does not rinse his hands of responsibility for his decisions or their ongoing ramifications.
For five reasons, Geithner must go:
Geithner was directly responsible for the most appalling corporate bailout in U.S. history, in which tens of billions of taxpayer dollars were secretly funneled to some of the richest corporations in the world. The terms of this bailout, and the associated cloak of secrecy under which it was conducted (the details of which continue to leak out) have hurt the public's confidence in the government.
Geithner's ongoing decision to save banks at any cost was predicated on the theory that this would keep the banks lending. This policy has failed: The banks have not continued to lend. What the banks HAVE done is coin billions of dollars of profits risk-free at taxpayer expense, fueling even more public outrage.
Geithner's policy of "too big to fail" has created a banking system whose bets are guaranteed by the US taxpayer, and it has distorted lending and market forces across the entire economy. This policy, which has now been all but written into the Constitution, is grossly unfair. Big banks can do whatever they want with no concern about the consequences; small banks have to hunker down or they'll get taken over and shut down.
Geithner's role in the AIG bailout, which the current administration bears no responsibility for, continues to destroy confidence in his current boss, PresidentBarack Obama. If AIG stays in the headlines, and Geithner does not accept responsibility for what happened. Obama's agenda and influence will continue to suffer.
Geithner's consistent decision to put Wall Street first has helped fuel a populist rage that will make it very difficult for the government to do anything more to help the financial system. If the recovery continues, such help might never become necessary. If it falters, however, Geithner's policies will have severely curtailed the government's ability to do anything about it.
Those who know him say that Tim Geithner is a very good guy. He made the decisions above in the midst of a panic, and I have no doubt that he was trying to do the right thing.
But contrary to the revisionist history now being promulgated, these actions were not the only way out. They were grossly unfair to taxpayers, and they have undermined public confidence in the government -- and our current President -- at a time when the country needs it most.
The Theft ( inside job)
Well, here is a quick reminder of how the theft of your money actually happened and in spite of what Obama says it was really, really simple. The government ie. the New York Federal Reserve Chairman agreed to pay the banks 100% of the price of the swaps that the banks including Goldman Sachs had bought from AIG.
Its simple really, Goldman Sacks bought the “swaps” ( don’t worry about what that means it doesn’t really matter) for 40 cents on the dollar and the Government gave them 100 cents on the dollar for them. That’s it, that’ s the brilliant “complicated” solution that Geithner’s brain belched out
This theft of your money was facilitated directly at by the then Chairman of the Federal Reserve Bank of New York just as Bloomberg reported after viewing the documents ,“Part of a sentence in the document was crossed out. It contained a blank space that was intended to show the amount of the haircut the banks would take, according to people who saw the term sheet.” (The term “haircut” is financial slang representing the discount to par that an assets sells for. Say you bought a stock for $10 and sold it for $6 you got a 40% “haircut”.)
Clearly the FED initially sought to not pay full price to Goldman Sachs and a few other banks but rather, rightfully, allow them to take responsibility for their mistakes. The Chairman of the New York Federal Reserve Bank himself intervened and with a magic marker blacked out that sentence and gave Goldman Sachs an instant 60% profit. The total price tag was $62 Billion dollars for assets that were bought for about $29.6 billion. Goldman Sachs got the lions share of that to the tune of $14 Billion of our money over a 14 month period. Isn’t high finance grand when you can steal from the public with the permission and backig of the government? Just buy any garbage you can and if you lose money, hey, no sweat, Obama and the libs will make sure you’ll have a profit.
Be the resistance
The Payoff
The reward that the Chairman of the New York Federal Reserve got for stealing your money and giving it to Goldman Sachs?
Well, well, well, you see, Goldman Sachs had just gotten a $5,000,0000,0000 ( five billion dollar) loan form Warren Buffet. We can’t possibly let Warren Buffet lose money just because you are unemployed can we? Of course not, if you are unemployed and can’t give Buffet any money, why that’s no problem, the government will just put your children and grand children in debt..while Obama, Buffet and Soros and Gorelick and Geitner fly around in Air Force One. ( When the hell are we going to see the pics from inside Air force One anyway?)
OK back to the reward given to the Chairman of the new York Federal Reserve Bank for taking your and your children and your grand children money? Well, he became the Secretary of the Treasury, Tim Geithner!
Remember how the lib crooks and their lackeys in the media howled like banshees whenever anyone questioned the logic of giving the treasury job to a crook who couldn’t even figure out his own taxes? Now you know why. It’s because he gave your money and your children and grandchildren’s money to Goldman Sachs, Warren Buffet, George Soros etc. They in turn give the money to Obama and ACORN and you and your family have become surfs indentured to the cronies in high finance.
Apropos, Buffet gets $500,000,000 ( five hundred million) dollars in interest alone, every year because they stole your money to bail out Goldman Sachs, but its OK because we get to hear how brilliant he is.
The Backlash?
Fast forward to now, Goldman Sachs announces that the bonuses will not be cash and the media hails it as the second coming of Christ. Truth is that the bonuses will be astronomical and will be in stock. The future recipients of these bonuses are not worried about losing money if the stocks go drop in price, they’ll hedge against that. What worries them is what your reaction will be once you find out how much they made and if the financial system collapse because of the plan to cause the “golden crisis”. For that too they are finding ways to hedge, they are buying guns. Yes that’s right Godman Sachs and co. are very concerned that blogs such as this one will put out the truth and you might have objections to quietly selling your children into serfdom so that Geithner can buy another Bently, and Jamie Gorelick can get another ten million dollar bonus or Soros and Buffet can buy another private jet. They are buying hand guns. I bet with all that money they can probably get a very nice set of sequentially numbered Les Baers. Oh and just for the record, unless you are a Goldman Sachs big wig, good luck buying a gun in Mayor Bloomberg’s NYC – that’s reserved for the elites not for the likes of us rednecks!
You can see some of the Goldman Sachs Directors here
