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Darrell Issa Is In Possession Of AIG's Redacted Schedule A, Wants To Make List Public

Tyler Durden's picture


It appears America's taxpayers are finally about to find out just what worthless securities they received in exchange for 100 cents on the dollar, courtesy of Goldman, Soc Gen, ML et al. when Bernanke and Gaithner, or whoever, decided to pay the banks in full for multi-billion dollar portfolio. As a reminder, the list in question is the now infamous Schedule A, which was redacted across the board, and which the SEC gave its blessing for secret treatment well into 2018.

Shahien Nasiripour of the Huffington Post writes:

UPDATE: 12:40 p.m. - Rep. Issa Still Pushing For AIG Disclosures

Obama administration scourge Darrell Issa (R-Calif.) announced Wednesday that congressional investigators have in their possession one of the most sought documents in the New York Fed-AIG saga: A detailed list of the souring assets taxpayers purchased from the world's biggest banks for 100 cents on the dollar.

The Federal Reserve Bank of New York initially pressured AIG to keep the list hidden from investors, regulators and the public. When it was eventually filed with the Securities and Exchange Commission, the SEC allowed the Fed and AIG to keep the details secret. A heavily-redacted version was made public last March.

Now Issa, the ranking Republican on the House Committee on Oversight and Government Reform, wants to make the whole thing public.

The document is part of 250,000 pages of internal documents on the AIG deliberations subpoenaed by the oversight committee.

It lists the toxic mortgage bonds that Goldman Sachs, Merrill Lynch and other banks insured through AIG. Those insurance contracts, called credit default swaps, are what the New York Fed ultimately took off AIG's books, paying the banks 100 cents on the dollar for souring mortgage bonds -- home mortgages that were bundled together and securitized. The banks could never have gotten anywhere near such a generous deal on the open market, so the move served essentially as a direct subsidy to those banks from taxpayers.

But taxpayers still don't know exactly what they own. The public knows that it owns a certain amount of assets, but none of the details. Taxpayers don't know which bundles of mortgages it purchased from AIG; how the banks were valuing those mortgages; how much collateral they had demanded from AIG on those securities; or which bank bundled those mortgages into securities.

In short, if Issa is successful in getting the document entered into the public record taxpayers will finally know just how much they overpaid.



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Wed, 01/27/2010 - 14:09 | Link to Comment John McCloy
John McCloy's picture

Wonderful news.

Wed, 01/27/2010 - 14:16 | Link to Comment docj
docj's picture

I certainly hope Rep. Issa is employing the services of a food taster and a remote car starter these days.

Wed, 01/27/2010 - 14:17 | Link to Comment ptoemmes
ptoemmes's picture

Dear Mr. Issa,

Just "Pentagon Papers" it.  Sometimes you just have to break the law.  Ask Hank, Timmah, and Ben.

I am sure ZH will be glad to receive a copy and do the right thing with it.


Wed, 01/27/2010 - 20:43 | Link to Comment carbonmutant
carbonmutant's picture


Wed, 01/27/2010 - 14:24 | Link to Comment Chopshop
Chopshop's picture

this is huge news bc it is actual price discovery !!

2nd only to TD's heads up on MM funds, which is an epic shot over the collective bow.

Wed, 01/27/2010 - 14:29 | Link to Comment 10044
10044's picture

Future news:CNBC learns it has been reported that Rep Issa has died over a suspected suicide.

Wed, 01/27/2010 - 14:30 | Link to Comment ShankyS
ShankyS's picture

I'd say it is a matter of national security that this list be made public. Systemic risk clearly exists if this list is not released.

Wed, 01/27/2010 - 14:31 | Link to Comment glenlloyd
glenlloyd's picture

I can't wait to see it......

Wed, 01/27/2010 - 14:33 | Link to Comment Cistercian
Cistercian's picture

 Great news.Gee, I hope a staffer accidently e-mails it everywhere.

 This may be the beginning of the end for GS et al.When the public sees it, I pray the perp walks begin.

Wed, 01/27/2010 - 18:27 | Link to Comment Ripped Chunk
Ripped Chunk's picture

Keep praying.

We are dealing with a powerful cartel here. Not a few guys hiding, hoping they would not be found out.

Wed, 01/27/2010 - 19:54 | Link to Comment Cistercian
Cistercian's picture

 Prayers answered!!!!!!!

 At least the info release.


 Now for the perp walks.

 Of course, the information looks particularly bad for GS, the tapeworm of Wall St.

Wed, 01/27/2010 - 14:37 | Link to Comment Unscarred
Unscarred's picture

...the SEC gave its blessing for secret treatment well into 2018."

Are you fucking kidding me!?  This is going to be the Kennedy cover-up of my generation?  Amazing.

I guess now we really know how fucked up this whole mess really is.

Wed, 01/27/2010 - 16:13 | Link to Comment VegasBD
VegasBD's picture

Maybe for us, but not normal americans. Try to explain schedule A papers and what it means during commercial breaks of american idol....

Wed, 01/27/2010 - 14:45 | Link to Comment Anonymous
Wed, 01/27/2010 - 14:45 | Link to Comment Commander Cody
Commander Cody's picture

Government in the Sunshine baby!

Wed, 01/27/2010 - 14:51 | Link to Comment Anonymous
Wed, 01/27/2010 - 15:13 | Link to Comment Commander Cody
Commander Cody's picture

I guess someone had to believe the asset "profit" bullshit.  It was only natural that some made payments on their loans in the portfolio.  These tranches of mortgages are not referred to as "toxic" for nothing.  The real question is what did the Fed pay for the portfolio and what is it really worth?  From all appearances, what is suggested is that the Fed paid par (assuming all loans perform) for all mortgage-backed assets on its books so that the holders wouldn't have to take losses.  Oh, by the way, that means you and I are responsible for the losses on those "toxic" assets.  As taxpayers, we have that responsibility.  Happy?

Wed, 01/27/2010 - 15:16 | Link to Comment Anonymous
Wed, 01/27/2010 - 15:27 | Link to Comment Anonymous
Wed, 01/27/2010 - 18:29 | Link to Comment Commander Cody
Commander Cody's picture

The last two sentences in my above post were cynical.

I'm presuming the $trillion+ of MBS assets the Fed bought were bought at or near par. Why mess up the good thing they started with AIG?  The question then remains as to how they get rid of them?  Will the Fed get more than they paid?  Whose assets are they?  Who gained on the deals?  I'm thinking that the alleged "profit" so well publicized recently was simply loan payments from the portfolios.

Of course, I may not know my ass from my elbow and just go have an early cocktail.

Wed, 01/27/2010 - 15:45 | Link to Comment smalltownlawyer
smalltownlawyer's picture

Yes, yes, #208005 is absolutely right. If we are spending billions and trillions to put off the inevitable, but it is working for right now, by all means let's not upset the cart. Also, if you're hooked on crack but still have some applicances left in the house that you can sell for tomorrows fix, it makes no sense to put down the pipe yet.

Wed, 01/27/2010 - 15:10 | Link to Comment MainStMonkey
MainStMonkey's picture

To Anonymous,

That very well could be the reason the FRBNY did what they did, but it doesn't explaing why they didn't want the counterparty information to get out. If everyone was made whole and there was no more default issue then it would stand to reason that they (FRBNY) would want to thump their chest right then an there and not ex post facto as it were. I think it is clear that the FRBNY wanted to reduce it's appearance of "moral hazard" by getting the counterparty banks out at par. The real kicker here is that they allowed the counterparty banks to use their collateral and securities from Maiden Lane III as collateral for zero cost $ from the FED window. Also, it is even more stunning that the FRBNY allowed banks like SocGen access to the FED window without being a primary dealer. 

I personally hate conspiracies, but it is starting to look like their is an illuminati-esqe banking cabal that is colluding to their own personal betterment at the detriment of everyone else. Maybe I'm wrong (I probably am) but these people all look way too cozy for me.

Another question is why didn't this congressional pannel ask any of the counterparties or the froriegn (French) bank regulators, who apprently agreed initially to haircuts on this crap if the disclosure was public and transparent (Gee - I wonder why they wanted that stipulation?), to testify? 

Wed, 01/27/2010 - 15:12 | Link to Comment Yes We Can. But...
Yes We Can. But Lets Not.'s picture

When I saw the headline, I had a deja vu moment, a recalling of the times back in the 80's when I'd enter my apartment in a downtown Chicago crap-hole building, flick the light switch, and then see and hear the roaches scurrying for cover.

Darrell Issa, you are a can 'o RAID incarnate, and I mean that as a deep compliment....

Wed, 01/27/2010 - 16:18 | Link to Comment Anonymous
Wed, 01/27/2010 - 15:13 | Link to Comment Anonymous
Wed, 01/27/2010 - 20:01 | Link to Comment Zippyin Annapolis
Zippyin Annapolis's picture

Kanjo will not run again--if he does he will be defeated easily. Shopping for a job in the financial industry--dig?

Wed, 01/27/2010 - 15:13 | Link to Comment Anonymous
Wed, 01/27/2010 - 15:24 | Link to Comment bugs_
bugs_'s picture

NO.  We already know how much we overpaid!

What we don't know is to who it was paid!

Wed, 01/27/2010 - 15:33 | Link to Comment Anonymous
Wed, 01/27/2010 - 17:16 | Link to Comment DaveyJones
DaveyJones's picture

Why would you leverage against yourself? Nothing makes sense until you realize its simple corruption.   

Wed, 01/27/2010 - 18:28 | Link to Comment Ripped Chunk
Ripped Chunk's picture

Thank you

Wed, 01/27/2010 - 22:48 | Link to Comment Anonymous
Wed, 01/27/2010 - 15:40 | Link to Comment Anonymous
Wed, 01/27/2010 - 16:48 | Link to Comment Screwball
Screwball's picture

This won't matter, nothing will.  After watching that 5 1/2 hour debacle today - we are just screwed.  I haven't been this pissed off in a long time.  These people are incompetent, ignorant, and apparently bought off.  These people would fuck up a one car funeral.

Wed, 01/27/2010 - 18:30 | Link to Comment Ripped Chunk
Ripped Chunk's picture

Sadly, I am going to have to agree.  Kabuki theater taken to its highest level.

Wed, 01/27/2010 - 17:58 | Link to Comment Anonymous
Wed, 01/27/2010 - 18:27 | Link to Comment Anonymous
Wed, 01/27/2010 - 20:53 | Link to Comment carbonmutant
carbonmutant's picture

There is no way this will not be made public.

There are too many fingers in the pie.

However there may be some delay caused by a little light blackmail.

Thu, 01/28/2010 - 08:44 | Link to Comment Anonymous
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