I find it curious that IJ neglected to quote this rather interesting information from the NY Fed:
Today’s announcement on ML III follows the successful wind-down of Maiden Lane II LLC (ML II) in February 2012, which resulted in a net gain of approximately $2.8 billion for the taxpayer. It also follows the January 2011 termination of the New York Fed’s extension of credit to AIG, which produced approximately $8.2 billion in interest and fees. When taken together, the total net profit to taxpayers from the New York Fed’s assistance to AIG and AIG-related facilities was $17.7 billion.
Ending its ties? Really? A gain of $6 billion? Really?
What we know publicly is that instead of suffering the normal market consequence of its imprudent actions over the decades, AIG was rescued by the U.S. government, to the tune of not a few millions, not a few billions, but 180 BILLION in the form of all sorts of vehicles…loans, grants, you name it, who knows.
Now, apparently, the coast is clear, all’s forgiven, and hey, the taxpayer even got a profit! Really?
Where did all the money come from? Gee, was it 5% rate increases on a few P&C policies? How many policies are required to generate BILLIONS of dollars? Let’s be conservative and not require !480 BILLION. How about only $100 BILLION? Or, how about just $10 BILLION?
How many policies to raise $10 Billion? I don’t think so. I think we are seeing state of the 2012 art in smoke, mirrors, and financial wizardry. And we sit there and swallow it.
Sam the ML II and ML III portfolios have to do with credit default swaps and derivatives. They have nothing to do with standard insurance. Given the underlying assets of those securities has improved, and the NY FED was able to sell them for more than they paid and they were also able to collect interest and fees, it is no wonder that they turned a profit for them.
Regarding the rescue of AIG, you might want to do some research on the facts: the total package provided up to $182B in assistance; however, if you actually read about how much AIG used of that, it is closer to around $110-120B. It is still a big number but it is also 33-40% lower than what was available.
I find it curious that IJ neglected to quote this rather interesting information from the NY Fed:
Today’s announcement on ML III follows the successful wind-down of Maiden Lane II LLC (ML II) in February 2012, which resulted in a net gain of approximately $2.8 billion for the taxpayer. It also follows the January 2011 termination of the New York Fed’s extension of credit to AIG, which produced approximately $8.2 billion in interest and fees. When taken together, the total net profit to taxpayers from the New York Fed’s assistance to AIG and AIG-related facilities was $17.7 billion.
Ending its ties? Really? A gain of $6 billion? Really?
What we know publicly is that instead of suffering the normal market consequence of its imprudent actions over the decades, AIG was rescued by the U.S. government, to the tune of not a few millions, not a few billions, but 180 BILLION in the form of all sorts of vehicles…loans, grants, you name it, who knows.
Now, apparently, the coast is clear, all’s forgiven, and hey, the taxpayer even got a profit! Really?
Where did all the money come from? Gee, was it 5% rate increases on a few P&C policies? How many policies are required to generate BILLIONS of dollars? Let’s be conservative and not require !480 BILLION. How about only $100 BILLION? Or, how about just $10 BILLION?
How many policies to raise $10 Billion? I don’t think so. I think we are seeing state of the 2012 art in smoke, mirrors, and financial wizardry. And we sit there and swallow it.
Sam the ML II and ML III portfolios have to do with credit default swaps and derivatives. They have nothing to do with standard insurance. Given the underlying assets of those securities has improved, and the NY FED was able to sell them for more than they paid and they were also able to collect interest and fees, it is no wonder that they turned a profit for them.
Regarding the rescue of AIG, you might want to do some research on the facts: the total package provided up to $182B in assistance; however, if you actually read about how much AIG used of that, it is closer to around $110-120B. It is still a big number but it is also 33-40% lower than what was available.
I believe that most of the money came from the sale of statutes on the Morefar estate. “Prancing Stag” fetched over $45 Billion on its own.