Rumor has it that Timothy Geithner is on his way out as Treasury Secretary, due to his involvement in the AIG scandal that is now unraveling in hearings before the House Oversight and Reform Committee. Bob Chapman writes in The International Forecaster:
Each day brings more revelations of efforts of the NY Fed and Goldman Sachs to hide the details of the criminal conspiracy of the AIG bailout ... This is a real crisis on the scale of Watergate. Corruption at its finest.
But unlike the perpetrators of the Watergate scandal, who wound up facing jail time, Geithner evidently has a golden parachute waiting at Goldman Sachs, not coincidentally the largest recipient of the AIG bailout. At least that is the rumor sparked by an article by Caroline Baum on Bloomberg News, titled "Goldman Parachute Awaits Geithner to Ease Fall." Hank Paulson, Geithner's predecessor, was CEO of Goldman Sachs before coming to the Treasury. Geithner, who has come up through the ranks of government, could be walking through the revolving door in the other direction.
Geithner has been under the House microscope for the decision of the New York Fed, made while he headed it, to buy out about $30 billion in credit default swaps (over-the-counter derivative insurance contracts) that AIG sold on toxic debt securities. The chief recipients of this payout were Goldman Sachs, Merrill Lynch, Societe Generale, and Deutsche Bank. Goldman got $13 billion, roughly equivalent to its bonus pool for the first 9 months of 2009. Critics are calling the New York Fed's decision a back-door bailout for the banks, which received 100 cents on the dollar for contracts that would have been worth far less had AIG been put through bankruptcy proceedings in the ordinary way. In a Bloomberg article provocatively titled "Secret Banking Cabal Emerges from AIG Shadows," David Reilly writes:
[T]he New York Fed is a quasi-governmental institution that isn't subject to citizen intrusions such as freedom of information requests, unlike the Federal Reserve. This impenetrability comes in handy since the bank is the preferred vehicle for many of the Fed's bailout programs. It's as though the New York Fed was a black-ops outfit for the nation's central bank.
The beneficiaries of the New York Fed's largesse got paid in full although they had agreed to take much less. In a November 2009 article titled "It's Time to Fire Tim Geithner," Dylan Ratigan wrote:
[L]ast November . . . New York Federal Reserve Governor Tim Geithner decided to deliver 100 cents on the dollar, in secret no less, to pay off the counter parties to the world's largest (and still un-investigated) insurance fraud -- AIG. This full payoff with taxpayer dollars was carried out by Geithner after AIG's bank customers, such as Goldman Sachs, Deutsche Bank and Societe Generale, had already previously agreed to taking as little as 40 cents on the dollar. Even after the GM autoworkers, bondholders and vendors all received a government-enforced haircut on their contracts, he still had the audacity to claim the "sanctity of contracts" in the dealings with these companies like AIG.
Geithner testified that the Fed's hands were tied and that the bank could not "selectively default on contractual obligations without courting collapse." But if it was all on the up and up, why all the secrecy? The contention that the Fed had no choice is also belied by a recent holding in the Lehman Brothers bankruptcy, in which New York Bankruptcy Judge James Peck set aside the same type of investment contracts that Secretaries Paulson and Geithner repeatedly swore under oath had to be paid in full in the case of AIG. The judge declared that clauses in those contracts subordinating other claims to the holders' claims were null and void in bankruptcy.
"And notice," comments bank analyst Chris Whalen, "that the world has not ended when the holders of [derivative] contracts are treated like everyone else." He calls the AIG bailout "a hideous political contrivance that ranks with the great acts of political corruption and thievery in the history of the United States."
If you tell a lie big enough and keep repeating it, said Joseph Goebbels, people will eventually come to believe it. The bailout of Wall Street initiated in September 2008 was premised on the dire prediction that if major counterparties in the massive edifice of derivative contracts were allowed to fall, the whole interlocking house of cards would collapse and take the economy with it. A hijacked Congress dutifully protected the derivatives game with taxpayer money while the real economy proceeded to collapse, the financial sector choosing to put their money into this protected form of speculative betting rather than into the more mundane and risky business of making loans to struggling businesses and homeowners. In the end, $170 billion of federal funds went to AIG and the banks feeding at its trough. Meanwhile, a survey of state finances by the Center on Budget and Policy Priorities think tank found that state governments face a collective $168 billion budget shortfall for fiscal 2010. If the money used to bail out AIG and the banks had been used to bail out the states instead, the states would not be facing insolvency today.
There is no law against gambling, but there is a law against fraud. In Watergate, a special prosecutor was appointed to bring criminal charges; but times seem to have changed.
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it's the equivalent of "Woodstein" getting wrapped up in what John Dean said to the grand jury instead of who was directing traffic from the white house. and watergate is the dereliction of duty equivalent of SC governor sanford's escapades in south america.
this investigation is a circus act. SCOTUS is and should be the focus of dealing with the corruption. there is direct correlation between maintaining the status quo and election reform. it all bubbles up to fixing the corruption there. the corruption in the legal system makes us a bona fide banana republic
Well, in the Cold War era both the Soviets and the NATO allies had a "crazy" policy called "Mutual Assured Destruction" in which each professed a willingness to annihilate the other even if it meant suffering annihilation themselves. It worked ... nuclear war never happened, and each side ultimately agreed to a stepped series of arms reductions that ultimately reduced tensions and restored peaceable relations.
The Wall Street bankers will visit upon the public whatever the public will bear. Frederick Douglass said "Power concedes nothing without a demand. It never did and it never will." Our demand is the one in Nehemiah 5:10 "leave off this usury" and the consequence we may visit upon them is the one I described in my previous post. If it's destructive, so be it. The country will get over it. Pre-WW II Germany got over it, before she pursued other policies that got her in big trouble.
No.
So what is the point? Simple. Somebody who has no apparent standard for evidence will just make stuff up.
The evidence will prove this fanciful nonsense to be false, and it will do it with ease.
However our whole culture is crooked with greed. The elite be they wealthy actors, MSNBC anchors paid millions, or pundits made wealthy and of course Timmy's GS banking pals taking home obscene amounts of money are all more worthy than tens of millions of poor Americans. Only the rich deserve to have private meetings with the president.
The Director of Avatar advises the president on NASA. Of course he is worthy. My views? Well what have I ever done? So eloquently posted as a reply to my criticism of Cameron's support of cutting NASA's budget. Yes indeed what have all us "retards" ever really achieved? Rahm is right we are nothing and should shut up obey and vote.
The reason why Arianna, Rachel Maddow, Keith Olberman, Krugman or any wealthy Liberal pundit will stir up our outrage to improve book sales or viewership but never advocate revolution is because they are wealthy and part of the culture or entitlement... greed.
Of course nothing will ever happen to Timmy. We're too busy watching millionaire actors in Avatar or video replays of multimillionaire sport stars playing football at the 2010 Rose Bowl.
Bernanke will not reveal the transactions, even the debt that rhe Fed has guaranteed upwards of 13 trillion dollars worth.
This is treason. And it is not even being investigated. The transfer of wealth will become evident as our economy crashes and our inflation goes through the roof and our joblessness doubles from our present dismal level.
The Obama Administration is another Hoover Administration without the moral underpinnings.
That's some harsh criticism, tml, but I do believe the facts, & nation-killing economic crisis, warrants the charges... even "treason."
I believe you were trying to say (MY EDITS)
< Bernanke and Geithner, on behalf of the THE BIG BANKS, bought [PURCHASED] banking fraudulent transactions to save the bankers and purchasers alike. It preserved a powerful oligarchy. It broke our country. >
President Obama has had a year to START to UNRAVEL this tragic, self-inflicted mess, but he is SO IN BED with those same mega-bankers
(GS, JPM-Chase, Citi, all with strong ties to the Robt Rubin school of "Democrat" (not!) financial deregulation and cooperation with PHIL GRAMM, DICK ARMEY, KEN LAY, and George Bush, et al Right-Wing Republicans)
... that instead of UNRAVELLING the mess, he has handed out MORE TRILLIONS of no-oversight, no accounting, much less, heavens forbid, forensic audits, to those very failed, fraudulent, corrupt bankers..
Obama has handed out some large portion of $20 TRILLION in taxpayer extorted bailouts since he became president in January 2009!
http://www.bloomberg.com/apps/news?pid=20601087&sid=aY0tX8UysIaM
AIG sold 'insurance products' called Credit Default Swaps. The problem was, they weren't required by regulators to hold sufficient reserves to pay off those 'insurance bets' if the housing market dropped more than a few percent.
When housing values fell AIG ended up owing over $170 Billion it could not pay to people who bought the 'insurance.'
Also, it was not 'insurance' in the traditional sense, because the buyer didn't have to actually own the assets being insured. Thus, they simply became bets, exactly like you place in Las Vegas, only in this case, AIG could place bets with IOU's rather than real money. If AIG won the bet, they got paid in real money and their traders got huge bonuses. If they lost the bet, the government paid it off. Pretty neat trick huh? Wouldn't you like that kind of a deal?
It's a shame, really - two of the most honourable public servants you have and how are they treated around here and everywhere else? With contempt!
If I wasn't such a big fan of not cutting off my nose to spite my face, I'd say Americans don't deserve to have Biden and Geithner working so hard on their behalf.
He is now almost 50 years old. By the end of his term as treasury secretary, he'll be almost 60 years old. By that time, after having endured eight years of abuse at the hands of a largely ungrateful nation, I should think he'll be ready to retire to some deserted south Pacific island!
And, besides, there is no love lost between Geithner and Goldman, rest assured.
No, he has not. The Federal Reserve is a private corporation, a consortium of private banks. It has stock, and pays dividends.
Tim Geithner received nearly a half million dollar severance package when he left the FRBNY to take Treasury secretary. Public sector jobs do not pay severance packages like that.
stop the madness sign my petition for congress, i will not be voting to bailout giant greedy companies.
1 . The Fed is a " quasi-government institution " .
Translation :
The Fed is a privately owned Corporation POSING as a " quasi-government institution " to cover the fact they are crooks who have usurped the Government's power to issue currency .
LARGEST HEIST IN WORLD HISTORY
What I don't see happening is a return to regulation. Regulation that is necessary to keep the system from blowing up again, and again and again. Then again, this cycle is extremely profitable for the oligarchs, so why bother regulating it? I realize this is a simplification, but it essentially parses how the rich get richer, and the middle class dissapears. In the end, it matters little which of the two illusions "runs" the nation, because the direction is inexorably the same.
You will forgive me for not praising this administration's lack of conviction. The rather effete actions so far smack of desperation, obfuscation, and an inability to make the hard decisions. I guess when the whole mess hits the wall it will be someone else's to clean up. The kicker is that prosperity has left America, and is not coming back in this generation or the next. Prolonging the lie only worsens the cut.