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The Real AIG Scandal

Tuesday 17 March 2009

by: Eliot Spitzer  |  Slate Magazine

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Former US Treasury Secretary Henry Paulson (pictured), then-New York Fed official Timothy Geithner, Goldman Sachs CEO Lloyd Blankfein and Fed Chairman Ben Bernanke made the initial decision to bail out AIG. (Photo: Elizabeth Dalziel / AP)

    It's not the bonuses. It's that AIG's counterparties are getting paid back in full.

    Everybody is rushing to condemn AIG's bonuses, but this simple scandal is obscuring the real disgrace at the insurance giant: Why are AIG's counterparties getting paid back in full, to the tune of tens of billions of taxpayer dollars?

    For the answer to this question, we need to go back to the very first decision to bail out AIG, made, we are told, by then-Treasury Secretary Henry Paulson, then-New York Fed official Timothy Geithner, Goldman Sachs CEO Lloyd Blankfein, and Fed Chairman Ben Bernanke last fall. Post-Lehman's collapse, they feared a systemic failure could be triggered by AIG's inability to pay the counterparties to all the sophisticated instruments AIG had sold. And who were AIG's trading partners? No shock here: Goldman, Bank of America, Merrill Lynch, UBS, JPMorgan Chase, Morgan Stanley, Deutsche Bank, Barclays, and on it goes. So now we know for sure what we already surmised: The AIG bailout has been a way to hide an enormous second round of cash to the same group that had received TARP money already.

Also see below:     
Hedge Funds May Be Getting a Bailout via AIG's Payments    β€’

    It all appears, once again, to be the same insiders protecting themselves against sharing the pain and risk of their own bad adventure. The payments to AIG's counterparties are justified with an appeal to the sanctity of contract. If AIG's contracts turned out to be shaky, the theory goes, then the whole edifice of the financial system would collapse.

    But wait a moment, aren't we in the midst of reopening contracts all over the place to share the burden of this crisis? From raising taxes - income taxes to sales taxes - to properly reopening labor contracts, we are all being asked to pitch in and carry our share of the burden. Workers around the country are being asked to take pay cuts and accept shorter work weeks so that colleagues won't be laid off. Why can't Wall Street royalty shoulder some of the burden? Why did Goldman have to get back 100 cents on the dollar? Didn't we already give Goldman a $25 billion capital infusion, and aren't they sitting on more than $100 billion in cash? Haven't we been told recently that they are beginning to come back to fiscal stability? If that is so, couldn't they have accepted a discount, and couldn't they have agreed to certain conditions before the AIG dollars - that is, our dollars - flowed?

    The appearance that this was all an inside job is overwhelming. AIG was nothing more than a conduit for huge capital flows to the same old suspects, with no reason or explanation.

    So here are several questions that should be answered, in public, under oath, to clear the air:

  • What was the precise conversation among Bernanke, Geithner, Paulson, and Blankfein that preceded the initial $80 billion grant?
  • Was it already known who the counterparties were and what the exposure was for each of the counterparties?
  • What did Goldman, and all the other counterparties, know about AIG's financial condition at the time they executed the swaps or other contracts? Had they done adequate due diligence to see whether they were buying real protection? And why shouldn't they bear a percentage of the risk of failure of their own counterparty?
  • What is the deeper relationship between Goldman and AIG? Didn't they almost merge a few years ago but did not because Goldman couldn't get its arms around the black box that is AIG? If that is true, why should Goldman get bailed out? After all, they should have known as well as anybody that a big part of AIG's business model was not to pay on insurance it had issued.
  • Why weren't the counterparties immediately and fully disclosed?

    •     Failure to answer these questions will feed the populist rage that is metastasizing very quickly. And it will raise basic questions about the competence of those who are supposedly guiding this economic policy.

        --------

        Eliot Spitzer is the former governor of the state of New York.

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    Hedge Funds May Be Getting a Bailout via AIG's Payments

    Wednesday 18 March 2009

    by: Dow Jones  |  Visit article original @ Dow Jones

        New York - The fact that some payments made by American International Group Inc. (AIG) to hedge funds are coming from government bailout money raises a question: Are hedge funds receiving a de facto bailout?

        If the answer is yes, it would signify the first taxpayer money yet to reach hedge funds since the financial crisis began back in late 2007. Hedge funds - investment pools made up primarily of high net worth individuals, pension funds and university endowments - have suffered like most during the crisis, but have pointed out with pride that as of yet their industry hasn't requested any government handouts.

        Officially, of course, any payments made by AIG to hedge funds wouldn't change that fact. It was AIG that requested the bailout, not the hedge funds. The insurance giant is now simply meeting its contractual obligations.

        In some cases, AIG has already paid out fairly hefty amounts to hedge funds with U.S. taxpayer funds. AIG said in a press release Sunday that it paid $200 million each in "public aid" to Citadel Investment Group and Paloma Securities. These payments were made to settle short-term trades last year in which the hedge funds loaned AIG cash in exchange for bonds.

        Also, as reported Wednesday in The Wall Street Journal, AIG reportedly may be paying out many different hedge funds for bets in which the hedge funds waged that the housing market would crater against AIG's bets that it would remain robust.

        It isn't clear how much in total that hedge funds stand to gain through the AIG payments, but the payments call into question the government's decision, whether out of haste or for any other reason, to allow the AIG bailout money to be dispersed to any counterparties, including hedge funds.

        "Taxpayer money is being paid to hedge funds by a Treasury that could have limited the payments to domestic banks but decided not to risk letting anyone big fail," said John Coffee, a professor of securities law at Columbia University. "In short, everyone of importance is being protected."

        Not all observers see a problem.

        While Edward Altman, a professor of finance at New York University's Stern School of Business, questions the use of taxpayer funds to pay huge bonuses to AIG executives (another controversy surrounding the AIG bailout), he doesn't see a problem with the hedge-fund payments.

        "The 'bailout' funds are doing exactly what they were intended to...pay off [ AIG's] bills on a timely basis so as not to cause any further harm to the system," he said. "Otherwise, what's the purpose of the bailout? It should have been clear that this involves [payments to] hedge funds."

        --------

        By Dan Molinski, Dow Jones Newswires; 201-938-2245.

      

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    Comments

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    It's all over folks. The

     Thu, 03/19/2009 - 00:02 β€” Anonymous (not verified)
    It's all over folks. The FED is printing up another Trillion dollars to buy MBS. Tranfer another trillion dollars to the wealthy. NO TAXES, just dilute our dollars. China is out of the game now. We have stolen two hundred billion from them and they aren't going to play any more. Obama won't recover from this. The domestic program of health care and energy will fall apart. Congress will say no more debt, treasuries won't sell. The world economy will continue to fail. The dye has been cast. Wall street got the life boats. They have already been set to sea, gone. Captain Obama has ordered the bar to give free drinks to the remaining people. The Titanic will soon slide to the bottom with all of us on board. The deals were cut long time ago. You don't get to be president without the weathies permission. Obama sold his soul. The dye is cast, no way to stop this ship from going down now. Greed destroyed America.

    Ask the GM employees who

     Thu, 03/19/2009 - 00:23 β€” David Butz (not verified)
    Ask the GM employees who are about to reopen their contract if "it was already in the contract so there is nothing we can do about it" is a valid answer. Better yet, ask your Congressman. If beyond the bonus issue there are other questions about the AIG bailout funds it only makes the GM workers case more poignant. How much do workers give up to support the elite? I think part of the problem here is that the smart people at AIG used models to price risk similar to Las Vegas gambling models. The problem is that outcomes of dice and card games are repeatable over long time frames and differing economic climates. Publicly traded stocks and securities are not. Fear and Greed yada-yada-yada deliver outcomes outside their poorly chosen models. The opportunity here is for regulators to identify the different risk models for free trade as opposed to gambling under controlled circumstances and make sure that the house (Wall Street?) can cover all their bets. If you sell instruments like short trades or credit default obligations, what if every one of them goes south in a down market? The answer should not be "bailout", the answer should be clearly defined as a risk to the selling agent that would still leave him solvent (not needing a bailout) in event all trades went "against the house". This would require repricing these things in a manner which would send the more adventurous folks to Vegas instead of Wall Street. Good for Vegas, good for America. Good for Wall Street? We probably need a few hundred lie detector test results to get to the bottom of that question. Edit Comment Please Join this Group to participate in Discussion.

    It is the same old sorry

     Thu, 03/19/2009 - 00:34 β€” Ann Wood (not verified)
    It is the same old sorry story; the overly wealthy elite have the power and the power protects themfrom any form of oversight. One day, perhaps far in the future, the citizens of the United States will be educated enough to think from cause to effect, and will demand a change in our sadly inefficient and skewed economic system. Our government and our economic system are one and the same. We are a wholly owned subsidiary of Corporate governance. Sad, is it not?

    The bonuses to AIG

     Thu, 03/19/2009 - 00:46 β€” Photonracer (not verified)
    The bonuses to AIG executives may indeed be excessive and I am pretty sure, a reward for failure, but so is the raise for our elected congress persons. Those fools were at the helm of the misguided ship of state. They have an automatic raise coming for not doing their job. Now our dearest congress persons are jumping on the bandwagon of the irate citizens. Fellow country men direct your ire where it will do the most good! A general election is not the only means of controlling congress. Get off your butts and make your wishes known. While you are at it take the time to educate yourself about what your are angry! This can be done in the unemployment line, the park, in school or heaven forbid and actual library! Have a wonderful revolution.

    Well, it just became

     Thu, 03/19/2009 - 00:53 β€” Anonymous (not verified)
    Well, it just became abundantly clear why Eliot Spitzer went down in flames a year ago. He'd had this Achilles heel for years but some people decided to call in the markers on him once it became clear that the things were about to hit the fan and he was someone who could make things blow in direction of the financial criminals who perpetrated the current meltdown. Wow. Kudos for Spitzer speaking out. His pecadillos seem trivial indeed compared to what is going on in financial circles. Spitzer's activities only impacted his family. The guys he could finger have impacted everybody. Keep speaking up, Eliot. You can redeem yourself.

    Time to End Our Feel-Good

     Thu, 03/19/2009 - 01:23 β€” David (not verified)
    Time to End Our Feel-Good Lies We Tell Ourselves. The first posting in the comments section is blunt and accurate. People, even progressives and liberals, have a natural tendency to lie to themselves. The fact is that the oligarchic elite bankers, militarists, politicians, government fascists and world resource owners have taken over the planet and stolen everything from us. As in another article where a clearly documented worldwide water shortage was greeted by comments that we can desalinate the ocean using nuclear fuel, so why worry, it's easy to see that just because progressiveS and liberals are on this site, that doesn't mean that people here are intelligent or honest. Fact is, capitalism and technoworship, along with human birth rates, has done in the planet and our human rights to oxygen, peace, quiet, good water, open space, birds, trees, rivers, lakes, safety, serenity, etc. Now we live in a sci-fi world of death, bulldozers and chainsaws. Time to build a new system, or at least please stop lying to yourselves, people!!

    Thank you, Mr. Spitzer! It

     Thu, 03/19/2009 - 01:26 β€” Gary in Minneapolis (not verified)
    Thank you, Mr. Spitzer! It appears that one of the main lines of business AIG has been engaged in is golden parachute insurance. I’d like to see the kind of reaction Geithner would get trying to market such junk β€œassets” to our Chinese lenders as collateral for more of their financial indulgence. One can imagine them smiling faintly, looking heavenward, and then down at the treasury notes they’ve bought as proxies for this folly, and scoff: β€œWe (ahem) assumed you knew what you were doing.”

    Why not call it as it is?

     Thu, 03/19/2009 - 01:30 β€” Anonymous (not verified)
    Why not call it as it is? Theft, plain and simple there are no toxic assets; they're all insured by AIG. If congress weren't so busy issuing tarp bucks and then paying for the same assets via AIG rescue money the banksters would not be laughing so hard it covers the sound of our money being sucked from our treasury. Wake up America we are being robbed.

    If we all think as "It's all

     Thu, 03/19/2009 - 01:39 β€” Ethel (not verified)
    If we all think as "It's all over folks" expresses, then s/he's right. I don't think so. When talented people like Elliott Spitzer are taken out of public service because of sexual activity (he should have been caught and chastised, but he shouldn't have been taken out of public service; we need his brains and commitment) and crooks stealing from the poor to give to the rich are not prosecuted, we are in trouble. But we can recover if U.S. citizens start paying attention! Re-take our government. Robert Reich's Supercapitalism is persuasive; we have to act. No, "It's all over folks," the die is NOT cast. Revolution NOW! Revolution against our corporatrocy and I'd add, against religious zealots imposing their ways/views on everyone.

    Its no conspiracy theory

     Thu, 03/19/2009 - 01:54 β€” Anonymous (not verified)
    Its no conspiracy theory now, made up by the fringe lunatics out there who are deeply afraid of the "new world order". Today I learned that the history of this mania may not be so far fetched. The same people who worked for Nixon for the last forty years including Kissinger, Rockefellar, Paulson, and the whole lot of both democrats and republicans have collectively sold the American people out and taken whatever we worked for as well as what our forefather's worked for. This banking, AIG, and other economic disaster was masterminded by the very people who now have left their walled condominiums and are booked for permanent flights to their chalets far away from the maddening crowd and the right of every American to demand that this nonsense stop. But I fear it is too late now for my country and it is too late for hope or for despair. It is what it is - the wealthy finally seizing total control of the planet which they wish to micomanage in cabals. The entire Government has failed us and we have sat by and watched while the world continues to fall into ruins.

    Elliot, come back, we need

     Thu, 03/19/2009 - 02:06 β€” Larry King (of Brooklyn) (not verified)
    Elliot, come back, we need you. All is forgiven!

    I too was wondering when you

     Thu, 03/19/2009 - 02:21 β€” Anonymous (not verified)
    I too was wondering when you might start putting your two cents in Eliot. The character assassination you had to endure and as a result the loss of your presence , cost all America dearly. No one has stepped in to fill your shoes either.

    Let them keystroke digits. A

     Thu, 03/19/2009 - 02:30 β€” Garrett Connelly (not verified)
    Let them keystroke digits. A trillion here and a trillion there, it doesn't matter. Our friendly young president is doing the best he can within the old growth paradigm. Just the other day he was able to draw on his years of experience and personally assure China their trillions are safe backing further US debt. Really,a trillion here or there is peanuts today and a simple delete keyboard stroke tomorrow. Sorta like buying Manhattan for beads. Face it, China has lots of extra cash because it doesn't have to clean up after itself and sends hundreds of millions of tons of plastic down it's rivers and on out to continental sized dead zones. Were all in this together. If China can grow fast enough to loan us more money so we can grow fast enough to pay them back,we'll be able to drive across the Pacific on Chinese floating plastic in hybrid Japanese cars using alcohol grown in former Amazon forests. This plan should work if we can just grow a little faster.

    I was pleased when Eliot

     Thu, 03/19/2009 - 03:13 β€” Peter Duveen (not verified)
    I was pleased when Eliot Spitzer was forced out of the governor's seat. I hate the idea of a prosecutor or DA lording over the state. Prosecutors abuse their positions and put innocent people in jail to promote their careers. Where was Spitzer when he found out about torture perpetrated by the Bush Regime? Where was he when Lynne Stewart, the attorney for the blind shiekh, was being persecuted by the government? Did he speak up? No. He should have. Now he is speaking up, and his efforts must be applauded. He is now in a position to take on a counter-culture stand, and break the legs of the elitist establishment that is grinding the Republic to a halt, and threatening the American people. Three cheers for Spitzer if he keeps it up.

    Thank goodness Eliot

     Thu, 03/19/2009 - 04:41 β€” peterjkraus (not verified)
    Thank goodness Eliot Spitzer's back. He and Bill Clinton were and are two of the most honest and capable political leaders we have, and both were castrated by the Republican screw machine .... the usual dirty trick when simple blackmail won't work. Watch them try the same smears on Obama

    Glad to hear Elliot Spitzer

     Thu, 03/19/2009 - 05:42 β€” Collage707 (not verified)
    Glad to hear Elliot Spitzer is back. In some ways, he's even more free now to give us some directional advice. What would he see as the next step? Halt any more bail out monies? A series of prosecutions might be an antidepressant to non-wealthy Americans. Which of Obama's advisers has convinced him that these monies must be given to the super corps without accountability. Do they really have enough power to call ALL the shots? If AIG is too big to fail, (I say this knowing little about the Wall St. gang) and the US owns the majority share--can't we break up this '800 pound gorilla' into manageable and productive parts before injecting more money? Didn't we do this before with Ma Bell? Then, (despite what AIG's CEO said today) we could rid ourselves of the hedge fund people, credit default swaps and other instruments (as well as the narcissists who love and exploit them), who have ruined our economy and demoralized our people. Eliot's fall from grace perhaps affords him the freedom to offer his always incisive advice on how to rid ourselves of the metastacised corporate culture of piracy.

    Just a quick followup.

     Thu, 03/19/2009 - 07:09 β€” Anonymous (not verified)
    Just a quick followup. Bernanke and Geithner decided to take the bailout "off balance sheet" to the FED. They knew they couldn't get any more money from Congress. Today Bernanke commited for 750 billion more toxic assests. These things will remain worthless. He's going to print money to do this. All last week both Geithner and Bernanke sent out signals that they would rescue the banks at any cost. The Chinese saw this and in an unprecidented move sent out a warning. They understand what printing money does to their Treasury Bonds. We are going to take a 5 Trillion dollar hit on our money. This is very dangerous. Worse we don't even have a say. Congress could stop it but out of sight out of mind. To big to fail, or systemic risk has Congress to scared to question all of this. Why this is all a lie is that the credit crisis could have been solved long ago by capitizing healthy regional banks. The political commitment was made to save Wall Street and the national banks like Citi and Wells Fargo who got into trouble at taxpayer expense. It's all a lie, but no one has the courage to challenge Wall Street who funds both parties. Biggest transfer of wealth ever, by Obama, Frank, Pelosi, Reed, Geithner and Bernanke. The Republicans will pick the Dems bones when all of this doesn't work.

    Welcome back Eliot. Thank

     Thu, 03/19/2009 - 10:14 β€” Anonymous (not verified)
    Welcome back Eliot. Thank G-d you are released from the ties of the machine. Give 'em HELL! They couldn't attack your policies or procedures. Bastards.

    If we were in the 1930's I'd

     Thu, 03/19/2009 - 13:05 β€” Genklag (not verified)
    If we were in the 1930's I'd say that all these shenanigans were a sure sign of an upcoming armed conflict....ruling that out, violence is being actively courted by the "men in/out of power. How it plays out on the world stage is the only imponderable part of this nightmare.

    The worst part is that there

     Thu, 03/19/2009 - 13:40 β€” Stefan Albrecht (not verified)
    The worst part is that there is still no real relieve at the housing front. Ordinary citizens need help too with their mortgages for their prime residence. Mortgages were pushed onto them by the same people that they, as taxpayers, bail out. This is the real scandal!!! I have written here for months that the Democrats will loose lots of political capital if they are not tough with the banks. Democrats can still not read the mood of their constituents! That's a real problem! All of this could have been avoided if the government (we the people) would have taken heavy equity stakes in all banks when they needed government help the most. With big government equity stakes the burden would be shared, since we the people would take part in the upside and were to get our money back. Goldman Sachs's stock price hit the $100 mark yesterday, up from below $80. Without government bailouts Goldman Sachs and all the others would be bankrupt by now. Because of the "very real" systemic risk we can not let them fail, therefore the AIG bailout was the right course of action, but we can take huge equity stakes. This would dilute the existing stake holders and punish them for their mistakes and greed. That's how Capitalism works and Capitalism is what they defend in the most feisty ways. But it is only Capitalism for ordinary people while corporate welfare and socialism is just fine! Democrats, take the gloves off and reign the banks in otherwise the voters will reign you out!!!

    Just because one set of

     Thu, 03/19/2009 - 15:00 β€” granny (not verified)
    Just because one set of agreements were inked doesn't mean the terms can't be changed. It's happening to all the American workers whose taxes are going to pay the bailout ransom moneys. Congress and the President need to rer-write the agreements, and READ EVERY PAGE OF THEM BEFORE SIGNING them into law. The obscenely fat cats on Wall Street and in the penthouses and fifth homes across the country, along with their obscenely rich spouses and children, need to paay for their greed and incompetence, the same way the rest of us are paying for THEIR greed and incompetence. And we deserve to know who they are and where they live. They can find us. We should ba able to find them.

    I agree with Elliot Spitzer

     Thu, 03/19/2009 - 15:02 β€” Anonymous (not verified)
    I agree with Elliot Spitzer that we should be more focused on the extent of the AIG bailout. However, even he wants to regard this whole mess as a bad business decision. Let's get real. The decision to slice and dice the mortgages into the now failing mortgage securities was really a very cynical attempt to defraud investors and the American public. Why should we, AIG, or anyone else pay insurance (for credit default swaps) to the perpetrators when the whole thing was an attempt to defraud in the first place?

    Nationalization is the only

     Thu, 03/19/2009 - 15:06 β€” Anonymous (not verified)
    Nationalization is the only way to clean the mess. Who created this mess in the first place ? Wall Street, and CEOs who've been lobbying Washington for deregulation and tax breaks for 30 years, no ? And we're supposed to believe these, according to themselves "talented", guys have the slightest clue how to clean their mess ? If so, they would have avoided this mess in the first place because it's much more difficult to clean the mess once it happened than to prevent it to happen. We're back in the 1930's when the happy few pulled all the strings always self congratulating. That's what the "talent" of these "talented" people is. That'why these "talented" have to be paid top dollars: they know, better than anybody else how to keep all the power for themselves. Those are the people this imperial elite needs. That's the "talent" they're always talking about. It's not of any use to anybody outside their restricted circles. Not good for you and me or for the average Joe.

    Equity stakes is the wrong

     Thu, 03/19/2009 - 15:10 β€” Anonymous (not verified)
    Equity stakes is the wrong way to go. It's the last thing you want to do. Forced restructuring is what's needed to be done and it should have been done from the start and especailly in September with AIG and Lehman. The CDS is what makes "too big to fail" work. We can't afford to pay all of these. Let the whole unregulated system go. All this is a transfer of wealth from taxpayers to Wall Street. Move-On sent our a equity stakes plea awhile back. All it does is confuse people. It's the wrong thing to do. AIG paid 100% SWAPS to everyone! Money gone. Stiglitz, S.Johnson,Krugman, Reich, Rubini all call for Nationalization (forced restructuring). Only solution to survive. Printing money is playing with fire and very unjust.

    This is a silly article.

     Thu, 03/19/2009 - 16:20 β€” mysterioso (not verified)
    This is a silly article. One of AIG's jobs is to provide insurance, to banks who buy it, against investment losses. They took their TARP money and did just that. Paid off on insurance policies like they were suppose to. That's what they are in the business of doing. This is separate from the bonus issue. Get it straight.

    To get things straight:

     Thu, 03/19/2009 - 18:16 β€” Stefan Albrecht (not verified)
    To get things straight: Nationalization is nothing else than a 100% ownership stake by the government. All the losses still need to be covered by the government, our tax dollars. In this case (100% ownership), we the people, have all the upside of a recovery. I think a total nationalizations is too harsh and not necessary but an ownership stake based on government rescue money/efforts is the right way to go. Another issue is if there shouldn't be a partial ownership of banks by the government/we the people in general. Since our money supply is, for good reasons, continually increased, banks as the distributor of money have the biggest advantage of this process. This validates the question if the government should not get a bigger share of profits from necessary monetary inflation through partial ownership in banks.

    yo, mysterioso... don't you

     Thu, 03/19/2009 - 23:13 β€” Herbert Browne (not verified)
    yo, mysterioso... don't you think that investment banks should actually OWN the assets they want to insure?.. instead of Insuring things that they sold to someone else?.. who can ALSO insure them? How many people/entities should be able to insure the same property/security? All of us? Why not... if it's LEGAL! (And, no... we Don't expect ETHICS to rear its unwanted Head- and wagging Finger- anywhere NEAR Wall Street.) ^..^

    Hurrah for Eliot Spitzer --

     Fri, 03/20/2009 - 03:12 β€” Bob Walters (not verified)
    Hurrah for Eliot Spitzer -- welcome back, Sir. Maybe I don't really understand CDSs, but as I get it, these are a cascading set of side bets between parties that something or other will succeed (pay off) or fail (not pay off) with firms like AIG betting on pay off, and insuring the bet. A basic principle of insurance is that the insurer has the money to pay the insured if the non-pay off event occurs. Car insurers bet you won't have a wreck, and essentially you bet that you will; the insurer is required (by law in most states) to maintain sufficient reserve capital to pay every insured if they all wreck at once. (Some states may allow a certain leveraged percentage of total risk exposure to be maintained -- less than the total risk amount.) If counterparties to AIG "bought" insusrance against their securities (mortgages, etc.) going sour, then in a "regulated" insurance environment, AIG would be required to maintain a certain level of liquid capital to pay off on those policies. Since we know the CDS "market" (casino) was unregulated, I suppose AIG was not REQUIRED to maintain a certain reserve capital. So were not the counterparties then obligated to do due diligence to determine if AIG could indeed pay off on the CDSs they wrote? If they didn't, and it turned out AIG couldn't pay, shouldn't that be "tough bahooties. buckaroos -- you lost?" So why should taxpayers bail out any of these gamblers? AIG was perpetrating a fraud, and the counterparties should have known it. I think the whole thing is a cover-scam to allow the fat-cats to loot the Treasury in broad daylight, and laugh all the way to their off-shore repositories for the stolen money. And they get a twofer: Obama is blocked from enacting the changes we, the people voted for, 'cuz there's no money. Rabid Ronnie Raygun's strategy all over again, promoted by that little fascist twit, Grover Norquist.

    Home ownership is

     Sat, 03/21/2009 - 06:21 β€” Anonymous (not verified)
    Home ownership is over-rated. Other comment: I support Mr E.S! I only wish he was a man who would have done to other woman that he would hope other men would do to his own daughters: treat with respect and honesty. I hope he learned. For a moment of....what pain he brought to others..

    I don't see anybody in sight

     Mon, 03/23/2009 - 22:12 β€” Anonymous (not verified)
    I don't see anybody in sight coming to ease the pain of my financial losses from the economic meltdown, It must be that membership in the middle class disqualifies one from equal treatment received by Wall Street, large bankers and the ultra-wealthy. Years ago Mr. H. L. Mencken wrote the following, 'Democracy is founded on the principle that the common man knows what he wants, therefore he deserves to get it good and hard'. It was true a century ago. Its certainly true now. I guess that I am too small and deserve to fail.

    Good to see spitzer back and

     Tue, 03/24/2009 - 17:47 β€” Anonymous (not verified)
    Good to see spitzer back and talking .I so angry about this whole mess and Obama is disappointing me daily.God how I wish truth would somehow enter the picture