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Ah, to see the day when various other Central Bankers see criminal charges filed against them for insubordination. Bernanke, Geithner, and Paulson being frog-marched in manacles? Could happen. Especially after today’s revelations about Geithner ordering AIG to ignore SEC regulations and keep secret that investment banks were repaid by the bankrupt AIG at 100% rather [...] This is all over financial blogs this morning. The chief beneficiary here was Goldman and the other investment banks. This latest revelation confirms the Fed’s commitment to secrecy and, although troubling, at this point should come at no surprise. The most important element is that AIG itself determined it should provide information about its swaps [...] As always, AIG and Goldman appear to be leading players. In this case, multiple federal investigations centering on just what happened with AIG. Government 'regulators' give up, promise Wall Street whatever it wants The federal pay czar recently said he would cut AIG execs salaries. The execs whined, saying they would quit. You guessed it. The pay czar then showed the spine of a jellyfish, meekly backed down, and exempted them from pay cuts. U.S. government’s wimpiness [...] In a report (pdf) titled “Factors Affecting Efforts to Limit Payments to AIG Counterparties”, Neil Barofsky, special inspector for TARP, wrote that the “negotiating strategy to pursue concessions from [AIG] counterparties offered little opportunity for success, even in the light of the willingness of one of the counterparty to agree to concessions”. He also concluded [...] Martha Stewart did five months for $44,000. That standard needs to be enforced now for everyone. During the collapse of AIG, their credit default swap unit was negotiating with banks who had bought $62 billion in CDS and CDOs from them. AIG wanted the banks to accept discounts of up to 40%. Instead, the [...] Michael Lewis profiles Joseph Cassano of AIG Financial Products, whose arrogance, stupidity, and greed directly led to the destruction of AIG and the cratering of the world financial system. That’s not an exaggeration. The feds are focusing on Joseph Cassano and others “focusing on a discrepancy between public statements of likely losses and the reality” Cassano lost hundreds of millions for AIG with his misguided trading, something which was directly responsible for the collapse of the company. Joseph Cassano Joseph Cassano bankrupted AIG. Yes, that’s right, he bankrupted it. Reports are the FBI is close to filing charges against him. I expect he’ll become as detested as Madoff. At which point insurance rates will automatically rise, quite possibly sharply. Is there anything that AIG did competently? |  | ||||
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