TARP Audit Finds Geithner Gave Away The Farm
This post by Jill Schlesinger originally appeared on CBS' MoneyWatch.com.
Special Inspector General for TARP (aka "SIG TARP") Neil Barofsky said something we've all known for a while: the AIG failed.
If you recall, AIG's failure meant that the companies on the other side of all of its contracts (counterparties) were going to be left holding the bag. Under normal cases of bankruptcy, the court would impose haircuts to the amount of money due to counterparties, but because AIG didn't actually declare bankruptcy, the counterparties claimed that they were owed 100 cents of every dollar. The only bank that even considered taking a haircut was UBS - the Swiss, for goodness sakes - hard to imagine that a Swiss bank could make US banks look bad, but here's a case in point.
OK, so let's get this straight: the financial world is melting down, Uncle Sam had just saved the bankers' butts and now Tim Geithner the President of the Federal Reserve Bank of New York (FRBNY) was going to wimp-out? Yes, the Great Gazoo strikes again! (My friend pointed out that our current Treasury Secretary and former tax cheatbears a striking resemblance to this esoteric character from "The Flintstones" — Geithner has been the Great Gazoo since!)
(You Tube)
When Geithner/Gazoo says, "Hello Dumb Dumb," he's talking to us! The Great Gazoo shafted the US taxpayer in the AIG debacle and in the process, enriched the counterparties who dragged us into this mess. The SIG TARP reportnoted that "structure and effect of the FRBNY's assistance to AIG ... effectively transferred tens of billions of dollars of cash from the government to AIG's counterparties."
Oh, and remember all of those claims by Goldman Sachs brass that the firm had "perfectly hedged" its exposure to AIG? Not so fast, boys. According to the New York Times, "among its notable findings, the report challenged Goldman's position that it should not have been forced to bear losses on its dealings with A.I.G. because it had successfully hedged away any exposure. Mr. Barofsky said that Goldman's hedges were unlikely to have held up amid the market turbulence of late last year."
Barofsky seems to be one of the few officials that has to tell us what we already know: TARP is "almost certainly going to be a loss" for taxpayers and Geithner rolled over for Wall Street in the AIG negotiations.
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Jon Stewart often asks this question of his political guests, none of whom have given him a satisfactory answer: Instead of shoveling taxpayer money into the coffers of the big banks who are responsible for this whole depression we're sinking into, why didn't we just use all that money to pay down the principal of millions of peoples' mortgages? This "bottom-up" approach would have had the added benefit of taking all those toxic assets off the banks' books.
All 3 branches of our government (and BOTH parties) have been corrupted by corporate money, & I can't see any solution that doesn't involve fundamental structural upheaval.
it's CLASS WARFARE !
Prior to his appointment as czar of the Treasury's $700 billion financial bailout, by U.S. Treasury Secretary Henry Paulson, 35-yr old Neel Kashkari was a space engineer working on the James Webb Telescope. He had both bachelor's and master's degrees from the Univeristy of Illinois, Urbana-Champaign.
Kashkari had made an abrupt 'about face' in his career which surprised even his family. It wasn't clear who he had met, or what information, might have motivated him to do so.
Suddenly, at a time of seemingly great success, with a "major pattern interupt," Neel Kashkari enrolled in an MBA course of studies at the University of Pennsylvania's Wharton School. The article reveals how Neel and Henry Paulson became acquainted, and how Neel went to work for "Hank" in our Nation's Capitol. It's a wonderful success story!
Neel is one of many individuals on Capitol Hill who have had connections with Goldman Sachs, and is also one of the employees barry soetoro aka/alias barack hussein obama kept on in the Treasury Department - which may, at the moment, still be 'under-staffed.'
Geithner's journey into the U.S. Treasury was fraught with controversy, and still is. Where did his conflicts of interest begin? To whom, and where, will the path lead before this 'over-achiever' is dismissed from the Treasury, and relieved of his responsibilities? Will AMERICA ever regain the funds from "the farm that Geithner gave away?" How? When?
Of this we can be certain: With teleprompters everywhere, no man acts alone in this present administration.
Surely more details about Geithner's journey are about to unfold.
Clear evidence of that is their CEO's affirmation that they are doing God's work, so they must be doing the right thing. Right?
I mean, you don't really thnk there was some sort of conspiracy here, do you? Really? Duh.
They are all in on it and the same people who caused the destruction of the economy are still running the show so they can keep us down and buy up the country cheap.
No, they ALWAYS have to compare whatever is going on to Bush or one of his administration.
Why cant you guys just for once, go "hey, that aint right" without mentioning someone currently out of office. Try it!