Read that almost all of these firms have paid back TARP money to get out of restrictions that was placed on it by this legislation (hence, the ability to keep salaries at present levels and avoid losing staff).
Again, a solution that allowed the markets to take the lead versus the government would have been preferable. The NY Fed and Treasury proved that they could not do it, and the taxpayers have to bear the brunt of these errors.
Fed should have allowed AIG to fail….company used taxpayer money to keep parent company afloat and insurance company was dependent upon parent. In addition, insurance company was underestimating reserves making the company appear more healthy than it was…
If the company went under, you’d probably see a healthier insurance market than today.
It all had to do with systemic risk. AIG owed a ton of money for credit default swaps they had insured. According to what’s been published, if AIG did not make good of paying back their insured’s for these swaps, a domino effect would have taken place of our entire economic system.
Meaning, we would have ended up trading chickens and cows as currency if we allowed everything to fail.
After this hearing it may be an opportunity to investigate Tax Cheat Geithner for perjury, even if it is on a different issue. He got away with one for tax evasion.The normal citizen would have never got away with what he did on his taxes.
The bulk of the money that went to AIG was passed onto banks on the brink of failure & distinction. If the money wasn’t given to AIG who in turn gave it to the banks for their great work on making one of the worst mortgage fiascos ever then most of the banks would have gone belly up.
If the FDIC tried to pay all the claims then the FDIC would have gone down the tubes which would have caused the gov’t to pay their claims which would have resulted in another great deprecion.
So if you follow the money trail at AIG you will see that the gov’t actually bailed out AIG so they could bail out the banking system. Loook at where the money went. It makes for some very interesting reading if your up for soome intense research.
Geithner is a Goldman/Sachs alumni and GS had the most to lose if AIG went kaput. So, Geithner saved his GS retirement. The banks that would’ve gone under still wouldn’t have cost the gov’t near what it has spent with the trillions devoted to the so-called stimulus.
Both W. and Obutthead were dummies on this one.
Had the banks gone under, then the $6T excess money in the world available for investment would’ve bought the banks and the recession in the US would be over today.
Remember, you two clowns, the only thing that the US gov’t did for the Great Depression was prolong it to, in fact, make it a ‘great’ depression in the US. Everywhere else in the world, the gov’ts did next to nothing and the depression lasted less than two years was just another econ downturn and isn’t referred to as a ‘great’ depression.
Remember Tacitus warning about gov’t during the Roman empire, to paraphrase: ‘The more a gov’t legislates, the more corrupt is it.’
If they could afford to hand out billions in bonuses they could have afforded to bail out themselves. At the VERY least their money should have been put to use to lower the amount of money some of you feel they should have been given.
They just didn’t want to spend their OWN money. Plus they knew that their friends of Goldman Sachs down at the Treasury Department would make sure their stocks were safe.
I still feel that they aren’t ‘saved’ they are just being handed a bucket to bail the sinking ship. All that taxpayer money did was stall the crash. Not stop it. Nothing will change for Main Street until Wall Street finds out their cannot walk on water and they will be forced to clean up their own messes.
This is exactly what Geitner, Obama, and the rest of the idiots wanted to happen because they don’t believe in capitalism
and the free market. This was the setup they were hoping for so us “dummies” would think they were doing great things just for us! Haha, the majority of Americans are smarter than they give us credit for.
Yes and the americans that felt it the most are still looking for jobs and ways to pay their bills.
I read one entry on IJ that suggested that AIG pay each of our federal taxes to the government instead of us, until their tab is paid. Sounds like a plan to me!
Um, Joe, Tim Geitner never was at Goldman/Sachs. That was Henry Paulson.
You mention that “Had the banks gone under, then the $6T excess money in the world available for investment would’ve bought the banks and the recession in the US would be over today.”
By who? Some other foreign government? Is that what you have wanted? Besides, what you say is all speculative.
The only thing you got correct in you post is the quote by Tacitus and your name.
Allan is wrong on this. The Fed (and Mr. Geithner) who was New York Fed Chief and Mr. Paulson (Treasury Secretary and Goldman Sachs alum) were the center point.
The credit default swaps would have horrific for the system, but the government should not have stepped in the way it did.
The government should have acted the way during the S&L bailout in the early 1980’s. They should have separated good assets and bad assets and allow bad assets to be taken off the companies financials. Government’s minimal involvement should have been would have been to put a backstop on private investor’s buying of risky assets that were viewed as toxic. Some of these risky assets have actually appreciated over the last year.
The government’s ineptness at handling this as lead to negotiating terms again and again (showing government’s incompetence) and providing a golden parachute to the Goldman Sachs executives (like Mr Paulson) who are free to engage in moral hazard.
Hey, I’m just repeating what cheif economists have reported and what was reported in documentaries. I’d of like to seen moral hazard take it’s place. Believe me. But, the government couldn’t let that happen due to systemic risk and collapse of the entire economy.
You have to remember who it was that nationalized the banks in the first place. Being pro free market with a deregulatory mindset that Henry Paulson was, I’m sure it was the last thing he or anyone wanted to have happen.
What documentaries? The banks have not been nationalized. The only other country that did this was Sweden. T
The only thing that was set place was TARP that is a good idea, but it was very badly planned and executed.
Bad assets are still not off the balance sheet, and private investors would have been interested in taking the risk with some government backstop.
If the market would have negotiated this, there would not be negotiation after negotiation. Also, this would be much easier on the taxpayer’s wallets.
As I mentioned, some of these toxic assets have increased in value making private investors and the government money.
Banks have fought to get out from TARP to increase paying their high salaries (that they could not do under TARP), and banks still engage in moral hazard.
The nations top 9 banks were forced to take TARP money. After what happened with Bear Stearns, Leahmen and AIG, Henry Paulson decided (along with Congress)to throw money at the problem so to speak.
In exchange, the government would take equity stakes in them.
Make sure you read the entire article when you’re quoting.
Goldman Sachs made out like the greedy thieves they are. Paulson intentionally allowed their biggest competitor to fall- making them (and himself) millions. And yes, they made damn sure that AIG paid GS for their credit default swap at 100% – again making sure they didn’t lost a dime and made millions when everyone else was falling.
AND, as far as TARP payback goes- check out the sweet deal CITI got- they aren’t paying TAXES because they wouldn’t be able to pay back TARP (or hand out big fat bonuses) if they had to pay those nasty old taxes as well. So they get yet one more free pass at our expense.
Follow the money. Dig into the Dot
Com bubble- again, Goldman Sachs. The Oil bubble – again, Goldman Sachs. Throw money at it, run up the price, bet against the clients and then dump it before it folds. Time and time again GS has made billions doing that and they are doing it again with our entire economy.
This was more about Goldman Sachs then anything else. They had to save their own stock options and retirement above anything and anyone else.
I love how the media creates a bad guy, broad brushes by reporting erroneous points and then sits back and fans the flame of self created discontent. For over a year we have heard about the “Insurance Giant, AIG…” but the truth of the matter is that of AIG’s 37,000 employees world wide, mayby 500 were in their Financial Products company (not even an insurance company) that created these unregulated and poorly understood financial bets.
The rest of AIG’s 36,500 employees and even most of the 500 in AIG FP are innocent consumers affected by this mess. We pay taxes, mortgages, have dreams and work hard. We are just as much a part of every community as the next person. These insurance employees are getting broad brushed and victimized by the media created evil empire syndrome even though the family that chose to sign a mortgage document for something they knew was too good to be true had, collectively, more to do with the financial implosion than any of these insurance employees did.
The insurance giant provides the protection that keeps businesses in business and jobs in place. While impossible to measure, the stagering possibility of the insurance part of AIG failing would topple almost any country in the world. And we would end up trading Chickens for Geese.
Read that almost all of these firms have paid back TARP money to get out of restrictions that was placed on it by this legislation (hence, the ability to keep salaries at present levels and avoid losing staff).
Again, a solution that allowed the markets to take the lead versus the government would have been preferable. The NY Fed and Treasury proved that they could not do it, and the taxpayers have to bear the brunt of these errors.
Fed should have allowed AIG to fail….company used taxpayer money to keep parent company afloat and insurance company was dependent upon parent. In addition, insurance company was underestimating reserves making the company appear more healthy than it was…
If the company went under, you’d probably see a healthier insurance market than today.
It all had to do with systemic risk. AIG owed a ton of money for credit default swaps they had insured. According to what’s been published, if AIG did not make good of paying back their insured’s for these swaps, a domino effect would have taken place of our entire economic system.
Meaning, we would have ended up trading chickens and cows as currency if we allowed everything to fail.
I’ll trade you two chickens and a duck for that opinion.
After this hearing it may be an opportunity to investigate Tax Cheat Geithner for perjury, even if it is on a different issue. He got away with one for tax evasion.The normal citizen would have never got away with what he did on his taxes.
The bulk of the money that went to AIG was passed onto banks on the brink of failure & distinction. If the money wasn’t given to AIG who in turn gave it to the banks for their great work on making one of the worst mortgage fiascos ever then most of the banks would have gone belly up.
If the FDIC tried to pay all the claims then the FDIC would have gone down the tubes which would have caused the gov’t to pay their claims which would have resulted in another great deprecion.
So if you follow the money trail at AIG you will see that the gov’t actually bailed out AIG so they could bail out the banking system. Loook at where the money went. It makes for some very interesting reading if your up for soome intense research.
Hey, fools, you’re wrong.
Geithner is a Goldman/Sachs alumni and GS had the most to lose if AIG went kaput. So, Geithner saved his GS retirement. The banks that would’ve gone under still wouldn’t have cost the gov’t near what it has spent with the trillions devoted to the so-called stimulus.
Both W. and Obutthead were dummies on this one.
Had the banks gone under, then the $6T excess money in the world available for investment would’ve bought the banks and the recession in the US would be over today.
Remember, you two clowns, the only thing that the US gov’t did for the Great Depression was prolong it to, in fact, make it a ‘great’ depression in the US. Everywhere else in the world, the gov’ts did next to nothing and the depression lasted less than two years was just another econ downturn and isn’t referred to as a ‘great’ depression.
Remember Tacitus warning about gov’t during the Roman empire, to paraphrase: ‘The more a gov’t legislates, the more corrupt is it.’
If they could afford to hand out billions in bonuses they could have afforded to bail out themselves. At the VERY least their money should have been put to use to lower the amount of money some of you feel they should have been given.
They just didn’t want to spend their OWN money. Plus they knew that their friends of Goldman Sachs down at the Treasury Department would make sure their stocks were safe.
I still feel that they aren’t ‘saved’ they are just being handed a bucket to bail the sinking ship. All that taxpayer money did was stall the crash. Not stop it. Nothing will change for Main Street until Wall Street finds out their cannot walk on water and they will be forced to clean up their own messes.
The terms are Interchangeable…
This is exactly what Geitner, Obama, and the rest of the idiots wanted to happen because they don’t believe in capitalism
and the free market. This was the setup they were hoping for so us “dummies” would think they were doing great things just for us! Haha, the majority of Americans are smarter than they give us credit for.
Yes and the americans that felt it the most are still looking for jobs and ways to pay their bills.
I read one entry on IJ that suggested that AIG pay each of our federal taxes to the government instead of us, until their tab is paid. Sounds like a plan to me!
Good job of explaining. You couldn’t be more right and the consequences of not doing it were unbelievable.
Um, Joe, Tim Geitner never was at Goldman/Sachs. That was Henry Paulson.
You mention that “Had the banks gone under, then the $6T excess money in the world available for investment would’ve bought the banks and the recession in the US would be over today.”
By who? Some other foreign government? Is that what you have wanted? Besides, what you say is all speculative.
The only thing you got correct in you post is the quote by Tacitus and your name.
Allan is wrong on this. The Fed (and Mr. Geithner) who was New York Fed Chief and Mr. Paulson (Treasury Secretary and Goldman Sachs alum) were the center point.
The credit default swaps would have horrific for the system, but the government should not have stepped in the way it did.
The government should have acted the way during the S&L bailout in the early 1980’s. They should have separated good assets and bad assets and allow bad assets to be taken off the companies financials. Government’s minimal involvement should have been would have been to put a backstop on private investor’s buying of risky assets that were viewed as toxic. Some of these risky assets have actually appreciated over the last year.
The government’s ineptness at handling this as lead to negotiating terms again and again (showing government’s incompetence) and providing a golden parachute to the Goldman Sachs executives (like Mr Paulson) who are free to engage in moral hazard.
Hey, I’m just repeating what cheif economists have reported and what was reported in documentaries. I’d of like to seen moral hazard take it’s place. Believe me. But, the government couldn’t let that happen due to systemic risk and collapse of the entire economy.
You have to remember who it was that nationalized the banks in the first place. Being pro free market with a deregulatory mindset that Henry Paulson was, I’m sure it was the last thing he or anyone wanted to have happen.
What documentaries? The banks have not been nationalized. The only other country that did this was Sweden. T
The only thing that was set place was TARP that is a good idea, but it was very badly planned and executed.
Bad assets are still not off the balance sheet, and private investors would have been interested in taking the risk with some government backstop.
If the market would have negotiated this, there would not be negotiation after negotiation. Also, this would be much easier on the taxpayer’s wallets.
As I mentioned, some of these toxic assets have increased in value making private investors and the government money.
Banks have fought to get out from TARP to increase paying their high salaries (that they could not do under TARP), and banks still engage in moral hazard.
The nations top 9 banks were forced to take TARP money. After what happened with Bear Stearns, Leahmen and AIG, Henry Paulson decided (along with Congress)to throw money at the problem so to speak.
In exchange, the government would take equity stakes in them.
http://www.cnbc.com/id/30745687
http://video.pbs.org/video/1082087546/chapter/4/
Make sure you read the entire article when you’re quoting.
Goldman Sachs made out like the greedy thieves they are. Paulson intentionally allowed their biggest competitor to fall- making them (and himself) millions. And yes, they made damn sure that AIG paid GS for their credit default swap at 100% – again making sure they didn’t lost a dime and made millions when everyone else was falling.
AND, as far as TARP payback goes- check out the sweet deal CITI got- they aren’t paying TAXES because they wouldn’t be able to pay back TARP (or hand out big fat bonuses) if they had to pay those nasty old taxes as well. So they get yet one more free pass at our expense.
Follow the money. Dig into the Dot
Com bubble- again, Goldman Sachs. The Oil bubble – again, Goldman Sachs. Throw money at it, run up the price, bet against the clients and then dump it before it folds. Time and time again GS has made billions doing that and they are doing it again with our entire economy.
This was more about Goldman Sachs then anything else. They had to save their own stock options and retirement above anything and anyone else.
I love how the media creates a bad guy, broad brushes by reporting erroneous points and then sits back and fans the flame of self created discontent. For over a year we have heard about the “Insurance Giant, AIG…” but the truth of the matter is that of AIG’s 37,000 employees world wide, mayby 500 were in their Financial Products company (not even an insurance company) that created these unregulated and poorly understood financial bets.
The rest of AIG’s 36,500 employees and even most of the 500 in AIG FP are innocent consumers affected by this mess. We pay taxes, mortgages, have dreams and work hard. We are just as much a part of every community as the next person. These insurance employees are getting broad brushed and victimized by the media created evil empire syndrome even though the family that chose to sign a mortgage document for something they knew was too good to be true had, collectively, more to do with the financial implosion than any of these insurance employees did.
The insurance giant provides the protection that keeps businesses in business and jobs in place. While impossible to measure, the stagering possibility of the insurance part of AIG failing would topple almost any country in the world. And we would end up trading Chickens for Geese.