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Neil Barofski's AIG Counterparty Payment Report Released; Demands Federal Reserve Transparency
The full SIGTARP report on AIG and its counterparty payments has been released. It contains all you need to know about the NYFED's bailout of Goldman Sachs. We are currently going through the report, and will post our findings as we have them.
Key timeline events:
AIG's collateral postings:
Total taxpayer subsidies:
Historical and current AIG CDS exposure:
And the most critical conclusion presented by Neil Barofsky: The SIGTARP blasts the Fed's ongoing desire to keep everything hidden and under a layer of opacity, as it keeps on lying to taxpayers that all is fine with the US economy, and urges investors to part with their hard-earned dollars and "invest" in toxic husks of zombie companies, when it knows full well that the entire financial system is constantly on the cusp of yet another collapse, and the market ponzi scheme could collapse at any minute.
The now familiar argument from Government officials about the dire consequences of basic transparency, as advocated by the Federal Reserve in connection with Maiden Lane III once again simply does not withstand scrutiny. Federal Reserve officials initially refused to disclose the identities of the counterparties or the details of the payments, warning that disclosure of the names would undermine AIG's stability, the privacy and business interests of the counterparties, and the stability of the markets. After public and Congressional pressure, AIG disclosed the identities. Notwithstanding the Federal Reserve warnings, the sky did not fall; there is no indication that AIG's disclosure undermined the stability of AIG or the market or damaged legitimate interested of the counterparties. The lesson that should be learned - one that has been made apparent time after time in the Government's response to the financial crisis - is that the default position, whenever Government funds are deployed in a crisis to support markets or institutions, should be that the public is entitled to know what is being done with Government funds. While SIGTARP acknowledges that there might be circumstances in which the public's right to know what its Government is doing should be circumscribed, those instances should be very few and very far between.
Audit the Fed already.
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How is Barofsky not high up on someone's list of people to be somehow "dealt with"? He's got to have some hefty protection. Either that, or great huge cojones of brass.
Barofsky is the straw man in this charade. The Ponzi needs a dog that barks and growls viciously and appears to be doing a real good job guarding the vault. And the powers that be make sure to push a few patsies inside the fence for Barofsky to chew on once in a while.
But the fact remains they would have never let someone this close to the Ponzi without having the ability to hit a built in self destruct switch. Either Barofsky is hanging with expensive hookers or plays with the boys or something along those lines, which was known before he was "placed" in front of the vault.
It's a symbiotic relationship for Barofsky as well. If he plays his cards right, makes a lot of noise, hauls in the trash conveniently placed in front of him and smiles for the camera, he should be able to parlay this gig into a 7 figure salary in corporate America.
Cynical I may be but so far there's been a whole lot of noise but very little blood spilled. And none from the big boys and powers that be. These people are not fools but we are fools if we ever entertain the idea they're stupid. Only the patsies are stupid, which makes them wonderful patsies.
i can see that...i am on board with that cynicism.
I think Barofsky is a straight shooter. Nothing in his past indicates that he is about to be a patsy.
Barofsky gets props from me.
It's Free Sergey Monday. Possible "deferred prosecution" meaning - dropped charges !!! Why is GoldSach allowed to keep the market manipulating software ???
http://www.reuters.com/article/domesticNews/idUSTRE5AF5PF20091116
Here, here! A Sapphire martini (with Jalepino stuffed olives) for you with 2 Pauli Girl chasers! Cynicism, in my experience, is usually well founded in fact(s). You are on the nose on that call. (I'm not sure you're not my twin brother separated at birth, when were you born?...lol).
I sometimes wonder, with how easy it is to fix elections, especially computer-based balloting (I am an IT d00d, trust me, it's incredibly easy), if Ron Paul and Dennis Kucinich (sp) are the "allowed" true reps for the true conservatives and true progressives, just to keep the sheeps happy and believing they have any sort of representation whatsoever.
But then again, Paul Wellstone picked a bad day to fly...
yeah he booked a flight with cia airlines...
those comments are intended towards CD, been reading your comments for quite a while...yes I reply to myself...yes, I have a copy of the DSM-V on the bookshelf...I know...:)
CD,
Have been reading your comments for a while across different subject matters. Your cynicism is a grim reminder of reality! Thank you. It keeps me from getting my hopes up.
I want to know what money is driving in the Maiden lane and how fast it's going and where it parks and I want to see it show up on google maps.
December 4, 2009 - Neil Barofsky, Special Inspector General for the Troubled Asset Relief Plan, has resigned effective immediately, citing concerns over the safety of a desire to spend more time with his family.
Or he will suddenly wake up dead one morning from an apparent "suicide"...
That I'd like to see; waking up dead. Must have worked for GS - a truely devine moment.
Sounds a little like they're trying to say "well the French wouldn't take less than par, so we couldn't very well ask our own people to do that."
Will Maiden Lane become a series and go into syndication?
Will Christy Canyon be the Maiden?
Why are we (AIG) still paying 100% on a buck on these positions? Why hasn't AIG Financial Financial Products been hived off and put into bankruptcy? Why does the NY Fed have a better asset lien position on AIG's assets than the Treasury?
Assuming those are all rhetorical questions.
AIG-FP has not been hived off and put into bankruptcy because the safe harbor provisions of the Bankruptcy Code allow derivatives counterparties to do about the same thing that they can do outside of bankruptcy. There's not much point to bankruptcy for a debtor for which the business is almost entirely derivatives contracts. The minute they declare bankruptcy, it's a clear default and, unlike the garden variety creditor, the derivatives counterparty can terminate the swap, exercise setoff rights, etc.
When asked months back in a Congressional hearing what would happen if "Audit the Fed" bill was passed, Ben Bernanke commented that "higher interest rates" would be an obvious result.
Given how investors (savers) are not benefitting at all from the Fed's current moral hazard, zero interest rate policies, I think an exchange of higher interest rates for increased transparency is not necessarily a bad idea.
What we get instead will be corruptive opacity and a totally worthless dollar.
Please let me know when the peaceful demontrations get going.
you don't get it - bernanke in academic language
was telling congress to fuck off or else - just
like he did with tarp....
but on the other hand there are so many rotting
corpses under his rug that i am sure there
would be interest rate issues pursuant to an
audit....so bring it on...
Did you hear him tell Volker to that he was wrong and to F off?
Theatre of the deranged.
Oh, I certainly get it, anon.
It's really a pretty easy thing for Bernanke to do as well, knowing that there are many representative that had entered the roach motel, commonly known as "Bought and Paid For". In fact the rep who elicited the reponse from Bernanke was none other than Alan Grayson. Otherwise, the question whould have never been breached.
Again, none of this will change until we see millions demostrating in the streets.
As a policy, I ignore (and strongly consider acting on the opposite of) the statements of:
1. statements of federal officials in any sort of financial capacity;
2. statements of international relations policy for any Middle Eastern country (including Afghanistan and Pakistan, which are not Middle Eastern -- come up with your own adjective at your peril);
3. statements of CEOs trying desperately to avert bankruptcy.
isnt maiden lain run by that fine gentleman who helped invent credit derivatives. i think he is the ceo of some small, international money market fun that oversees trillions of dollars. whats his name again?
oh yeah larry fink.
i think he also gets to trade with taxpayers money under the PPIP under blackrock as well.
All True.
What you've got to remember is that the SIGTARP is "doing the Lord's work" (For Lord Blankfein, that is).
Give the guy a break. Once the whole TARP mess blows over or is taken over completely as a Fed TAPP (Troubled Asset Purchase Program, which has already started), Youg Neil will return to Mother Squid, at at least the Senior VP level, with no doubt a "special bonus" for his many sacrifices in the service of his country.
When will the Sheeple ever learn that this is CRONY Capitalism going on here, on a scale that would make Mexico, Indonesia or Pakistan blush?
KptLT laughing swordfish
9er Unterseeboote Flotille
and also for you...Here, here! A Sapphire martini (with Jalepino stuffed olives) for you with 2 Pauli Girl chasers!...Is that Young Neil or Neil Young...:)
It's "Young Neil" (he's a kid yet, 34 or so).
And for what it's worth, the Elixir of the Blue Bottle, that beloved Bombay Sapphire, is the preferred variety of schnapps in the U-96 wardroom.
I like the jalapeno stuffed olives, but I'm partial to a Bombay Gibson (cocktail onion) as well.
And for biere? St. Pauli Girl, Beck's, Tuborg (Danish), and my all-time favorite Dortmunder Union, on tap at the Hofbrauhaus just 500m. from the Pier 6 entrance to the base.
You will usually find most of the Flotille there after we secure ship's work in port.
KptLt. laughing swordfish
9er Unterseeboote Flotille
Onions work for me ('specially when fresh out of the garden and dropped into Sapphire marinade for a few days...:) What WOULD we do without onions?...cant imagine it...(used to be a chef, among many jobs) ...:) All of those are great biere...my fave is Pilsner Urquell tho', but tonight is PWT (Poor White Trash) beer night, as is work week...:) Sind Sie Deutsch, oder was? :)
And for biere?
try Zirndorfer, from a little village near Nuernberg.......Am bestens !
Zirndorfer - sehr gut!
Und GordonBiersch Blonde - unser besten!
But tonight, it's Amerikanischer "Miller High Life"
Bill paying time, y'know
KptLt. laughing swordfish
9er Unterseeboote Flotille
In conclusion, as is the conclusion upon every revelation that the government is asleep at the switch and actually causes many of the disasters in this country, we are recommending that we be given more power and authority to regulate things we can not possibly understand or hope to prevent. We have historical precedent for this, including 9/11, Hurricane Katrina, and now this financial crisis.
How does Geithner still have a job?
No, wait, how did he ever get confirmed in the first place?
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