The difference between what AIG was forsed to pay to the banks and a discounted value that it could have negotiated should be forgiven by the Fed in AIG’s outstanding debt to them. Otherwise, AIG shareholders should seek a class action status against the Fed .
Sure…this was a continuation of what was started by Former Secretary Paulson and the prior administration. We know the AIG bailout was directly related to keeping Goldman Sachs happy and afloat. The former Sec Tres (Paulson) was the former Goldman CEO. So, equal blame goes to him. The prior Pres had no idea of what was happening and he really could not be blamed for not knowing everything, given the speed in which it all occureed and the timing (he was on his way out and Obama was on his way in). All he could do is rely on what the “experts” were telling him. If Geitner is responsible, so is Paulson.
While I agree that a special prosecuter makes sense, I would suggest that, as this all happened during the Bush administration, they also look at Bush, Cheney, Paulsen, etal with respect to their role.
Read this (posted below in italics), it’s the DemonRatic Party that’s beholdened to Wall Street, big business, and the trial liars. The DemonRats don’t like the SCOTUS decision, because it breaks up the party’s monopoly to big bucks from big business. Now, other corps that oppose the DemonRats bailouts of Wall Street will be able to take to the public their point of view.
So, read:
“Can’t We At Least Get a Toaster? Ann Coulter
Wednesday, January 27, 2010
In the wake of the Massachusetts Miracle last week (“The other Boston Massacre”), President Obama adopted a populist mantle, claiming he was going to “fight” Wall Street. It was either that or win another Nobel Peace Prize.
Now the only question is which Goldman Sachs crony he’ll put in charge of this task.
If Obama plans to hold Wall Street accountable for its own bad decisions, it will be a first for the Democrats.
For the past two decades, Democrats have specialized in insulating financial giants from the consequences of their own high-risk bets. Citigroup and Goldman Sachs alone have been rescued from their risky bets by unwitting taxpayers four times in the last 15 years.
Bankers get all the profits, glory and bonuses when their flimflam bets pay off, but the taxpayers foot the bill when Wall Street firms’ bets go bad on — to name just three examples — Mexican bonds (1995), Thai, Indonesian and South Korean bonds (1997), and Russian bonds (1998).
As Peter Schweizer writes in his magnificent book “Architects of Ruin”: “Wall Street is a very far cry from the arena of freewheeling capitalism most people recall from their history books.” With their reverse-Midas touch, the execrable baby boom generation turned Wall Street into what Schweizer dubs “risk-free Clintonian state capitalism.”
Apropos of the Clintonian No-Responsibility Era, Goldman Sachs and Citibank became heavily invested in Mexican bonds after a two-day bender in Tijuana in the early ’90s. Any half-wit could see that “investing” in the dog track would be safer than investing in a corrupt Third World government controlled by drug lords.
But precisely because the bonds were so risky, bankers made money hand-over-fist on the scheme — at least until Mexico defaulted.
With Mexico unable to pay the $25 billion it owed the big financial houses, Clinton’s White House decided the banks shouldn’t be on the hook for their own bad bets.
Clinton’s Treasury Secretary, Robert Rubin, former chairman of Goldman, demanded that the U.S. bail out Mexico to save his friends at Goldman. He said a failure to bail out Mexico would affect “everyone,” by which I take it he meant “everyone in my building.”
Larry Summers, currently Obama’s National Economic Council director, warned that a failure to rescue Mexico would lead to another Great Depression. (Ironically, Summers’ current position in the Obama administration is “Great Depression czar.”)
Republicans in Congress said “no” to Clinton’s Welfare-for-Wall-Street plan.
It’s not as if this hadn’t happened before: In 1981, Reagan allowed Mexico to default on tens of billions of dollars in debt — Mexico claimed the money was “in my other pair of pants” — leaving Wall Street to deal with its own bad bets.
As Larry Summers expected, this led like night into day to the Great Depression we experienced during the Reagan years … Wait, that never happened.
At congressional hearings on Clinton’s proposed Mexico bailout a decade later, Republicans Larry Kudlow, Bill Seidman and Steve Forbes all denounced the plan to save Goldman Sachs via a Mexican bailout.
So the Clinton administration did an end run around the Republicans in Congress and rescued improvident Wall Street bankers by giving Mexico a $20 billion line of credit directly from the Treasury’s Exchange Stabilization Fund.
Relieved of any responsibility for their losing bets, Wall Street firms leapt into buying other shaky foreign bonds. Soon the U.S. taxpayer, through the International Monetary Fund, was propping up bonds out of South Korea, Thailand, Indonesia, then Russia — all to save Goldman Sachs.
The IMF could have saved itself a lot of paperwork by just sending taxpayer money directly to Goldman, but I think they’re saving that for Obama’s second term.
Throughout every bailout, congressional Republicans were screaming from the rooftops that this wasn’t capitalism. It was “Government Sachs.” As Rep. Spencer Bachus (R-Ala.) put it, the same rules that apply to welfare mothers “ought to apply to rich Greenwich, Conn., investors who are multimillionaires.”
But Wall Street raised a lot of money for the Democrats, so Clinton bailed them out, over and over again.
Before you knew it, once-respectable Wall Street institutions were buying investment products even more ludicrous than Mexican bonds: They were buying the mortgages of Mexican strawberry-pickers.
Why shouldn’t Wall Street trust in suicidal loans no sane person would ever imagine could be paid back? Time after time, when their bets paid off, they pocketed huge fees; when their bets failed, they sent the bill to the taxpayers.
With nothing to fear, the big financial houses bought, repackaged and resold investment products that included loans like the one issued by Washington Mutual to non-English-speaking strawberry pickers earning a combined $14,000 a year to purchase a $720,000 house.
But the financial wizards on Wall Street were trading these preposterous loans as if they were bars of gold. They may as well have bet the entire U.S. economy on a dice game in an alley off 44th Street.
Every mortgage-backed security bundle was infected with suicidal, politically correct loans that had been demanded by community organizers such as Barack Obama — as is thoroughly documented in Schweizer’s book.
On the off chance that mammoth mortgages to people who could barely afford food somehow went bad, Wall Street firms could be confident that their Democrat friends would bail them out.
Even the Republicans would have to bail them out this time: They had strapped the dynamite of toxic loans onto the entire economy and were threatening to pull the clip. Wall Street had infected every financial institution in the country, including completely innocent banks.
But now Obama says he’s going to “fight” Wall Street, which is as plausible as claiming he’ll “fight” the trial lawyers.
As Schweizer demonstrates, whenever the Democrats “regulate” Wall Street, the innocent pay through the nose, while Wall Street swine lower than drug dealers and pornographers end up with multimillion-dollar bonuses so they can run for governor of New Jersey and fund lavish Democratic fundraisers in the Hamptons.
Republicans should respond the way they always have: Support the free market, not looters and welfare recipients on Wall Street, especially the Democrats’ friends at Goldman.”
There was an article right here on IJ dated 3/16/09 detailing the timeline of the AIG bailout.
September 16, 2008 — US takes 79.9% stake in AIG
January 20, 2009 — Obama is inaugurated
Joe, you say never trust a DemonRat, but it was a Republican that signed the bill.
But I agree with most of what you say about the Democrats! It’s just that way more people need to realize it’s not JUST the democrats- it’s the whole lot of ’em.
We need truly viable third, fourth, and fifth political parties. And not a “tea party” funded and trumpeted by a bunch of Republicans — that’s like renaming Philip Morris as “Altria” — new name, but business as usual.
We need to amend the electoral process to give those parties a proportional share (kind of like how EU seats are determined). In fact, we need to talk a whole lot more about process in general.
We need to fundamentally change politics in America. But are we up for it or are we still too coddled by our material pleasures to concern ourselves with enacting real change?
Wow, what a messed up, to put it mildly, intertwined mess we’ve uncovered underneath the AIG bailout.
First, it seems to be true that Geitner was never a Goldman Sachs man. However, I’ll bet there are some ties in the midst of his time as President of the Federal Reserve Bank of New York. Back scrathing is virtually guaranteed, here.
You can check his resume on Wiki, and it’s very telling. How many perverted and communistic ideas were planted in young adult and early development between Bangkok, Thailand and studying Mandarin at Peking University. Not to mention Dartmouth. There must not be a masculine bone is his entire body, and that shows in his sweet photo on said wiki.
Nuff said about that, though.
I did read Ann Coulter’s posting with interest. While there is no question where Ann leans, you have to admit she’s pretty spot-on with most of her details in this post. What a trail.
Anyway, the fact of the matter is that George Bush turned out to be no more of a Conservative than his daddy. Hank Paulson was previously a Democrat, and without question he stammered and muttered his way through the guise of avoiding a world-wide catastrophic event (to use his terms) in order to keep him and his buddies at Goldman happy, in reality. And, with a bailout that big, billions can get lost and unaccounted for. Right?
What a farce that the free economic system could not have handled this mess from the beginning. This is as believable as the tooth fairy and global warming. Let’s face it, if the global warming crazies could access trillions of dollars to quote, fix the mess that’s unfixable in any other way, they would do it in a heartbeat. Oh wait, they are already cooking up that recipe as we speak.
Lord, help us! At nothing a few more trillion dollars won’t take care of, though.
Although your points are very balanced, I would like to point out the short term memory of all people. Remember back in 2002 and 2003 when Bush and McCain warned congress about the problems with Fannie and Freddie and they sought to regulate their lending practices via creation of an agency in the treasury? Well, the Dems shot this down declaring nothing was wrong with either institution.
Fast forward 5 years: Fannie and Freddie were the largest bailout recipients receiving in excess of $200B so far (yet no one is complaining that they pay it back like AIG should). Fannie and Freddie were also some of the largest contributors to Dodd, Kerry, Obama, Clinton, Kanjorski’s etc campaigns in 2008.
So if you want to look at where some of these bad loans originated and who was behind it look to Fannie and Freddie and the Democrats who thought it was the RIGHT, not the dream, of every american to own a house. The abusive lending practices of Fannie and Freddie definitely aided in the creation of the subprime crisis, but no one seems to care anymore…
Yep, this is true. Both congressional Democrats and some Republicans eventually killed a proposal for an agency within the Treasury Department to supervise mortgage giants Fannie Mae and Freddie Mac. It was the Federal Housing Enterprise Regulatory Reform Act of 2005.
Bush also seemed to retract his thoughts in a press conference on any economic crisis in either late 2007 or early 2008 when he denounced that the economy was in any trouble and called himself an optimist and remained confident that the markets are strong. He should have just come out and said “I told you so”.
He also said the same thing regaring fuel prices when it was suggested by energy analyist that gasoline would spike to nearly $4.50 – $5.00 a gallon by summer back in early 2007. We all know what happened with that.
I telling you it is high time we had a special prosecutor to look into the graft and corruption of these boys and the links to Clinton. (both of them)
The difference between what AIG was forsed to pay to the banks and a discounted value that it could have negotiated should be forgiven by the Fed in AIG’s outstanding debt to them. Otherwise, AIG shareholders should seek a class action status against the Fed .
You go that right! Timbo is another obama crook along with the rest of his and x Clinton appointees!
Sure…this was a continuation of what was started by Former Secretary Paulson and the prior administration. We know the AIG bailout was directly related to keeping Goldman Sachs happy and afloat. The former Sec Tres (Paulson) was the former Goldman CEO. So, equal blame goes to him. The prior Pres had no idea of what was happening and he really could not be blamed for not knowing everything, given the speed in which it all occureed and the timing (he was on his way out and Obama was on his way in). All he could do is rely on what the “experts” were telling him. If Geitner is responsible, so is Paulson.
While I agree that a special prosecuter makes sense, I would suggest that, as this all happened during the Bush administration, they also look at Bush, Cheney, Paulsen, etal with respect to their role.
Read this (posted below in italics), it’s the DemonRatic Party that’s beholdened to Wall Street, big business, and the trial liars. The DemonRats don’t like the SCOTUS decision, because it breaks up the party’s monopoly to big bucks from big business. Now, other corps that oppose the DemonRats bailouts of Wall Street will be able to take to the public their point of view.
So, read:
“Can’t We At Least Get a Toaster? Ann Coulter
Wednesday, January 27, 2010
In the wake of the Massachusetts Miracle last week (“The other Boston Massacre”), President Obama adopted a populist mantle, claiming he was going to “fight” Wall Street. It was either that or win another Nobel Peace Prize.
Now the only question is which Goldman Sachs crony he’ll put in charge of this task.
If Obama plans to hold Wall Street accountable for its own bad decisions, it will be a first for the Democrats.
For the past two decades, Democrats have specialized in insulating financial giants from the consequences of their own high-risk bets. Citigroup and Goldman Sachs alone have been rescued from their risky bets by unwitting taxpayers four times in the last 15 years.
Bankers get all the profits, glory and bonuses when their flimflam bets pay off, but the taxpayers foot the bill when Wall Street firms’ bets go bad on — to name just three examples — Mexican bonds (1995), Thai, Indonesian and South Korean bonds (1997), and Russian bonds (1998).
As Peter Schweizer writes in his magnificent book “Architects of Ruin”: “Wall Street is a very far cry from the arena of freewheeling capitalism most people recall from their history books.” With their reverse-Midas touch, the execrable baby boom generation turned Wall Street into what Schweizer dubs “risk-free Clintonian state capitalism.”
Apropos of the Clintonian No-Responsibility Era, Goldman Sachs and Citibank became heavily invested in Mexican bonds after a two-day bender in Tijuana in the early ’90s. Any half-wit could see that “investing” in the dog track would be safer than investing in a corrupt Third World government controlled by drug lords.
But precisely because the bonds were so risky, bankers made money hand-over-fist on the scheme — at least until Mexico defaulted.
With Mexico unable to pay the $25 billion it owed the big financial houses, Clinton’s White House decided the banks shouldn’t be on the hook for their own bad bets.
Clinton’s Treasury Secretary, Robert Rubin, former chairman of Goldman, demanded that the U.S. bail out Mexico to save his friends at Goldman. He said a failure to bail out Mexico would affect “everyone,” by which I take it he meant “everyone in my building.”
Larry Summers, currently Obama’s National Economic Council director, warned that a failure to rescue Mexico would lead to another Great Depression. (Ironically, Summers’ current position in the Obama administration is “Great Depression czar.”)
Republicans in Congress said “no” to Clinton’s Welfare-for-Wall-Street plan.
It’s not as if this hadn’t happened before: In 1981, Reagan allowed Mexico to default on tens of billions of dollars in debt — Mexico claimed the money was “in my other pair of pants” — leaving Wall Street to deal with its own bad bets.
As Larry Summers expected, this led like night into day to the Great Depression we experienced during the Reagan years … Wait, that never happened.
At congressional hearings on Clinton’s proposed Mexico bailout a decade later, Republicans Larry Kudlow, Bill Seidman and Steve Forbes all denounced the plan to save Goldman Sachs via a Mexican bailout.
So the Clinton administration did an end run around the Republicans in Congress and rescued improvident Wall Street bankers by giving Mexico a $20 billion line of credit directly from the Treasury’s Exchange Stabilization Fund.
Relieved of any responsibility for their losing bets, Wall Street firms leapt into buying other shaky foreign bonds. Soon the U.S. taxpayer, through the International Monetary Fund, was propping up bonds out of South Korea, Thailand, Indonesia, then Russia — all to save Goldman Sachs.
The IMF could have saved itself a lot of paperwork by just sending taxpayer money directly to Goldman, but I think they’re saving that for Obama’s second term.
Throughout every bailout, congressional Republicans were screaming from the rooftops that this wasn’t capitalism. It was “Government Sachs.” As Rep. Spencer Bachus (R-Ala.) put it, the same rules that apply to welfare mothers “ought to apply to rich Greenwich, Conn., investors who are multimillionaires.”
But Wall Street raised a lot of money for the Democrats, so Clinton bailed them out, over and over again.
Before you knew it, once-respectable Wall Street institutions were buying investment products even more ludicrous than Mexican bonds: They were buying the mortgages of Mexican strawberry-pickers.
Why shouldn’t Wall Street trust in suicidal loans no sane person would ever imagine could be paid back? Time after time, when their bets paid off, they pocketed huge fees; when their bets failed, they sent the bill to the taxpayers.
With nothing to fear, the big financial houses bought, repackaged and resold investment products that included loans like the one issued by Washington Mutual to non-English-speaking strawberry pickers earning a combined $14,000 a year to purchase a $720,000 house.
But the financial wizards on Wall Street were trading these preposterous loans as if they were bars of gold. They may as well have bet the entire U.S. economy on a dice game in an alley off 44th Street.
Every mortgage-backed security bundle was infected with suicidal, politically correct loans that had been demanded by community organizers such as Barack Obama — as is thoroughly documented in Schweizer’s book.
On the off chance that mammoth mortgages to people who could barely afford food somehow went bad, Wall Street firms could be confident that their Democrat friends would bail them out.
Even the Republicans would have to bail them out this time: They had strapped the dynamite of toxic loans onto the entire economy and were threatening to pull the clip. Wall Street had infected every financial institution in the country, including completely innocent banks.
But now Obama says he’s going to “fight” Wall Street, which is as plausible as claiming he’ll “fight” the trial lawyers.
As Schweizer demonstrates, whenever the Democrats “regulate” Wall Street, the innocent pay through the nose, while Wall Street swine lower than drug dealers and pornographers end up with multimillion-dollar bonuses so they can run for governor of New Jersey and fund lavish Democratic fundraisers in the Hamptons.
Republicans should respond the way they always have: Support the free market, not looters and welfare recipients on Wall Street, especially the Democrats’ friends at Goldman.”
Forever educatin’ simple-minded, DemonRatic fools,
Your pal and buddy,
Joe
There was an article right here on IJ dated 3/16/09 detailing the timeline of the AIG bailout.
September 16, 2008 — US takes 79.9% stake in AIG
January 20, 2009 — Obama is inaugurated
Joe, you say never trust a DemonRat, but it was a Republican that signed the bill.
But I agree with most of what you say about the Democrats! It’s just that way more people need to realize it’s not JUST the democrats- it’s the whole lot of ’em.
We need truly viable third, fourth, and fifth political parties. And not a “tea party” funded and trumpeted by a bunch of Republicans — that’s like renaming Philip Morris as “Altria” — new name, but business as usual.
We need to amend the electoral process to give those parties a proportional share (kind of like how EU seats are determined). In fact, we need to talk a whole lot more about process in general.
We need to fundamentally change politics in America. But are we up for it or are we still too coddled by our material pleasures to concern ourselves with enacting real change?
Joe – just yesterday you posted that Geithner is a Goldman/Sachs alumni. When in fact it was Paulson that came from Goldman.
Now, you post this insightful piece, by Ann Coulter of all people. It’s completely biased.
You have a very narrow mind and you make it look as if the Republicans poop smells like roses.
You can run, but you can’t hide (except behind the State controlled media)!
Ok Rush Limbaugh.
Wow, what a messed up, to put it mildly, intertwined mess we’ve uncovered underneath the AIG bailout.
First, it seems to be true that Geitner was never a Goldman Sachs man. However, I’ll bet there are some ties in the midst of his time as President of the Federal Reserve Bank of New York. Back scrathing is virtually guaranteed, here.
You can check his resume on Wiki, and it’s very telling. How many perverted and communistic ideas were planted in young adult and early development between Bangkok, Thailand and studying Mandarin at Peking University. Not to mention Dartmouth. There must not be a masculine bone is his entire body, and that shows in his sweet photo on said wiki.
Nuff said about that, though.
I did read Ann Coulter’s posting with interest. While there is no question where Ann leans, you have to admit she’s pretty spot-on with most of her details in this post. What a trail.
Anyway, the fact of the matter is that George Bush turned out to be no more of a Conservative than his daddy. Hank Paulson was previously a Democrat, and without question he stammered and muttered his way through the guise of avoiding a world-wide catastrophic event (to use his terms) in order to keep him and his buddies at Goldman happy, in reality. And, with a bailout that big, billions can get lost and unaccounted for. Right?
What a farce that the free economic system could not have handled this mess from the beginning. This is as believable as the tooth fairy and global warming. Let’s face it, if the global warming crazies could access trillions of dollars to quote, fix the mess that’s unfixable in any other way, they would do it in a heartbeat. Oh wait, they are already cooking up that recipe as we speak.
Lord, help us! At nothing a few more trillion dollars won’t take care of, though.
Happy trails.
@ Short Term,
Although your points are very balanced, I would like to point out the short term memory of all people. Remember back in 2002 and 2003 when Bush and McCain warned congress about the problems with Fannie and Freddie and they sought to regulate their lending practices via creation of an agency in the treasury? Well, the Dems shot this down declaring nothing was wrong with either institution.
Fast forward 5 years: Fannie and Freddie were the largest bailout recipients receiving in excess of $200B so far (yet no one is complaining that they pay it back like AIG should). Fannie and Freddie were also some of the largest contributors to Dodd, Kerry, Obama, Clinton, Kanjorski’s etc campaigns in 2008.
So if you want to look at where some of these bad loans originated and who was behind it look to Fannie and Freddie and the Democrats who thought it was the RIGHT, not the dream, of every american to own a house. The abusive lending practices of Fannie and Freddie definitely aided in the creation of the subprime crisis, but no one seems to care anymore…
Yep, this is true. Both congressional Democrats and some Republicans eventually killed a proposal for an agency within the Treasury Department to supervise mortgage giants Fannie Mae and Freddie Mac. It was the Federal Housing Enterprise Regulatory Reform Act of 2005.
Bush also seemed to retract his thoughts in a press conference on any economic crisis in either late 2007 or early 2008 when he denounced that the economy was in any trouble and called himself an optimist and remained confident that the markets are strong. He should have just come out and said “I told you so”.
He also said the same thing regaring fuel prices when it was suggested by energy analyist that gasoline would spike to nearly $4.50 – $5.00 a gallon by summer back in early 2007. We all know what happened with that.