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A Tax Cheat's Last Stand

Tyler Durden's picture




 

From Tim Geithner's testimony, presumably not prepared on TurboTax. Presented without commentary but with some bolding.


The steps the government took to rescue AIG were motivated solely
by what we believed to be in the best interests of the American people.
We did not act because AIG asked for assistance. We did not act to
protect the financial interests of individual institutions. We did not
act to help foreign banks.
We acted because the consequences of AIG
failing at that time, in those circumstances, would have been
catastrophic for our economy and for American families and businesses.

The government has not yet repaired all the extensive damage caused
by this crisis. For every American out of work, for every family facing
foreclosure, and for every small business facing a credit crunch, this
recession remains acute. But everyone should realize that because of the
actions of the Treasury and the Federal Reserve, the American financial
system is now in a position where it can provide the credit necessary
for economic growth, not stand in its way.
That is an important
achievement necessary to lay the foundation for job growth and long-term
economic stability.

The situation of AIG today is substantially better than it was six
or twelve months ago. AIG's insurance subsidiaries are open for
business and generating positive returns. A number of those
subsidiaries are attracting attention from external investors. We
anticipate that AIG will generate substantial proceeds from the sale of
some of those entities.
Under the terms of the support we have provided,
the first call on the proceeds from any sales of AIG's subsidiaries will
be to repay the support that the U.S. government has provided to AIG.

AIG has made substantial progress in winding down its Financial
Products subsidiary, the division where AIG's problems were
concentrated. The gross value of AIGFP derivatives positions are down by
more than half since September of 2008 and the company actually
generated a profit in the last two quarters for which public information
is available.

Our latest audited financial statements show that, as of September
30, 2009, Treasury had invested $43 billion in AIG under TARP. At that
time, our estimate of the "market value" of that investment was $13
billion. We believe that, depending on market conditions and the future
performance of AIG's businesses, the actual recovery on the Treasury's
investment could be significantly higher.
Moreover, we are confident
that the FRBNY Credit Facility, its loans to Maiden Lane II and Maiden
Lane III, and its preferred interests in certain of AIG's subsidiaries
will be fully repaid.

There are two central lessons from this crisis, both applicable to
AIG, that have guided the President's proposals and the legislation now
working through Congress to reform our financial system.

First, we need the ability to limit risk-taking for institutions
that threaten the overall stability of the system and can cause
extraordinary damage to the American economy. We need this ability not
just for banks, but for institutions that operate like banks. These
non-bank financial institutions have existed alongside banks and yet
were not subject to those constraints in this crisis. We also need to
make sure that regulators have clear accountability and enforce
sensibly-designed constraints on risk.

Second, the federal government must have the ability to resolve
failing major financial institutions in an orderly manner, with losses
absorbed not by taxpayers but by equity holders, unsecured creditors
and, if necessary, other large financial institutions.

Today, we know that when confronting a severe economic crisis the
government must respond with overwhelming force. That is the basic
lesson of the Great Depression. That is the basic insight that informed
every judgment we made. And that is the reason we are now emerging from
a recession and not still in the midst of a second Great Depression.

 


Remember: Do your citizen's duty - burn a Benjamin with overwhelming force, max out your credit card in the midst of America's latest Golden Age (cause the Conference board said so), buy 10 Kindles, quit your unemployed status, garnish Goldman with 80% of your wages (scratch that, you already do), support Team TurboTaxTreason and vote for change!

 

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Wed, 01/27/2010 - 00:16 | 207242 ShankyS
ShankyS's picture

Timmaaahh took the bait hook line and sinker. IMO he was set up for the fall years ago when this sham all started. I'm thinking his personality allowed them to easily pick and place the scapegoat. Remember, these things just "don't happen" in the world of GS where every move is calculated years in advance. Note to Timmaaahh - you were had bro. Sorry.

Wed, 01/27/2010 - 09:07 | 207448 FLETCH
FLETCH's picture

+1 

cheapest political insurance ever

#2 cheapest is bernanke renomination

do i hear a bus coming?

Wed, 01/27/2010 - 00:18 | 207244 Anonymous
Anonymous's picture

Most sales guys in finance especially the wholesalers selling mutual funds with crappy records learn to sell only conceptually. They never get bogged down to the details because if they did hardly anyone would buy their product.

This is exactly what Geithner is trying to do.....pretend the Fed and Treasury saved the word and hey you should buy into my conceptual B.S.

Geithner and Bernanke need to kicked to the curb...

Wed, 01/27/2010 - 00:20 | 207246 Ruth
Ruth's picture

It looks to me you did it so Soc Gen, whom already owes you at such a sweet deal, would shut up and not talk about it anymore.  And I'm sure there's a laundry list your Special Inspector General will figure out..... PLEASE AUDIT THE FED.

Wed, 01/27/2010 - 00:23 | 207252 Cursive
Cursive's picture

Audit it, if you must, but definitely end it.

Wed, 01/27/2010 - 01:25 | 207314 Anonymous
Anonymous's picture

beautifully said....

Wed, 01/27/2010 - 09:56 | 207492 MarketTruth
MarketTruth's picture

+1

Wed, 01/27/2010 - 00:20 | 207247 barnvette
barnvette's picture

Most sales guys in finance especially the wholesalers selling mutual funds with crappy records learn to sell only conceptually. They never get bogged down to the details because if they did hardly anyone would buy their product. This is exactly what Geithner is trying to do.....pretend the Fed and Treasury saved the word and hey you should buy into my conceptual B.S. Geithner and Bernanke need to kicked to the curb.

Wed, 01/27/2010 - 00:34 | 207264 glenlloyd
glenlloyd's picture

Excuse me....emerging from a recession...perhaps in his eyes and wallet we are, but built on a foundation of nothing more than expansive money / credit creation....and none of it is real, the foundation is sand.

And for the AIG rationale, as I have read elsewhere the insurance side of the operation was in no peril at all, so the whole idea that insurance was at risk is a lie.

He's such a liar...tax cheating ass clown. Why isn't he gone yet?

Wed, 01/27/2010 - 00:42 | 207277 Anonymous
Anonymous's picture

"And that is the reason we are now emerging from a recession and not still in the midst of a second Great Depression."

"It aint over till the fat lady sings."
Dick Motta, Washington Bullets basketball coach

I don't know bout you, but I haven't heard any fat ladies singin.

Wed, 01/27/2010 - 00:45 | 207281 straightershooter
straightershooter's picture

A Japanese tourist in the Mall asked a homeless man wandering in the mall: Who is Obama?

The homeless man replied: Oh, that's the president of the United States.

Confused, the Japanese tourist asked again, Who?

Oh, the homeless man replied again: The Boss of Turbo Tax Cheat.

Sowudesenei, the Japanese tourist smiled and thanked the homeless man.

Yes, a Japanese tourist knew who is the turbo tax cheater, and who the Obama really is: The boss of the turbo tax cheat.

Wed, 01/27/2010 - 00:54 | 207286 deadhead
deadhead's picture

Two words for Mr. Geithner:

Straight Jacket

 

i really think this man is losing it, big time.

Wed, 01/27/2010 - 01:45 | 207330 Assetman
Assetman's picture

Second, the federal government must have the ability to resolve failing major financial institutions in an orderly manner, with losses absorbed not by taxpayers but by equity holders, unsecured creditors and, if necessary, other large financial institutions.

 

Oh. My. God.

 

The man has most certainly lost it.

 

You make the unsecured bondholders and equity holders take the hit the FIRST time around, you blubbering putz.  You sure as hell don't shower unconditional capital injections and compel the Fed to buy bad assets.  

 

This "if had had to do again and the stars were aligned just right I'd save the taxpayers and sink the capital holders" garbage is just plain sh*t on a stick.

 

And it will fool absolutely no one.

 

 

 

Wed, 01/27/2010 - 02:53 | 207357 Miles Kendig
Miles Kendig's picture

The killer is that he is admitting he knows what is supposed to happen and that he failed to fulfill his responsibilities while in charge.  Next.

Wed, 01/27/2010 - 00:55 | 207288 Giovanni Zucchetti
Giovanni Zucchetti's picture

The private sector people who were asked to come up with a private-sector solution in mid September, 2008, concluded that AIG's liquidity needs exceeded AIG's assets - SIGTARP.

 

 

Wed, 01/27/2010 - 00:59 | 207293 Hephasteus
Hephasteus's picture

"Today, we know that when confronting a severe economic crisis the government must respond with overwhelming force. That is the basic lesson of the Great Depression. That is the basic insight that informed every judgment we made. And that is the reason we are now emerging from a recession and not still in the midst of a second Great Depression."

 

Boy someones going to wake up screaming WTF!!! at some point in the future.

Wed, 01/27/2010 - 10:48 | 207556 mikla
mikla's picture

+1

So clueless.

Wed, 01/27/2010 - 01:28 | 207316 defender
defender's picture

Timothy Franz Geithner....hmmm, his response to the economy suddenly makes so much more sense...

http://www.nbc.com/saturday-night-live/video/clips/pumping-up-with-hans-...

Wed, 01/27/2010 - 13:15 | 207760 bugs_
bugs_'s picture

listen to me now and believe me later

Wed, 01/27/2010 - 14:22 | 207933 Hephasteus
Hephasteus's picture

LOL. And listen to me later and stare in disbelief that you continue to listen to me or believe me.

Wed, 01/27/2010 - 01:42 | 207327 dark pools of soros
dark pools of soros's picture

and of course they didn't see all these wide open holes in the vault first right?  like the cop that sees the failed security system.. rob first and then they act like the hero later saying how they can prevent future theft!!

Wed, 01/27/2010 - 01:50 | 207334 stealthmouse
stealthmouse's picture

Yes!  Imminent financial collapse was at hand, but Timmy saved us!  That, because AIG Financial Products was a whole ONE THIRD the size of Lehman, with the rest in insurance contracts and insurance premiums that were completely separate (wait, am I mistaken or did Hank "Shell Game" Paulson let Lehman fail?).  Oh, and because we had to funnel $22B+/- to the Squid.  

Wed, 01/27/2010 - 01:52 | 207337 stealthmouse
stealthmouse's picture

AIGFP is not where the problems were concentrated, it's the ONLY place where the problems were.  Timmy saying he had anything to do with investor interest in the insurance subs is just a huge lie.  

Wed, 01/27/2010 - 02:07 | 207341 faustian bargain
faustian bargain's picture

Franz?

Really?

Wed, 01/27/2010 - 02:40 | 207349 Rick64
Rick64's picture

 It is so ironic that this is the guy that was head of the NYF while all this was going on, and now he is in charge of sorting this mess out. On top of that he cheated on his taxes. Good choice Obama.

Wed, 01/27/2010 - 03:19 | 207367 faustian bargain
faustian bargain's picture

His name was on the short list provided by GS.

Strangely, all the other names on the list were his too.

Wed, 01/27/2010 - 03:01 | 207360 Anonymous
Anonymous's picture

I get it, all this massive gifting of taxpayer largesse to a few huge banks, was for our own good. And now that the banksters have mounds of cash, they've decided to pay it to themselves and charge us more for the privelege of having their name on our credit cards. Isn't that special.

Look Timmy, we ain't little children. We have figured out that the banksters aren't our friends. And we believe that as bad as allowing AIG and a handful of too big firms to actually fail (that is, come into federal receivership) would have been, it truly could have choked finance for a while and surely would hurt the markets, enagaging in this astronomical theft of our futures and our childrens futures while leaving the banksters to run another Ponzi is one heck of a lot worse. Why the blazes can't you figure that out. Pompous moron.

Wed, 01/27/2010 - 03:17 | 207365 nikku
nikku's picture

"We believe in a strong dollar policy."

Huh?.....Hahahahahahahahahahahahah! Snort. Ha.

 

Thank goodness the children of China, indeed the children of the whole world, can see the finest the free world has to offer in all sincerity and probity.

Wed, 01/27/2010 - 03:21 | 207368 Kreditanstalt
Kreditanstalt's picture

By criticizing Geithner as an unsuccessful tax evader, you somehow manage to simultaneously grant an entirely unearned legitimacy to the entire banking and financial apparatus, the government and political establishment and, indeed, to the ongoing Ponzi-ness of the system itself.

We should applaud him for trying, as we should anyone doing so, successfully or unsuccessfully.  Don't mistake slavish, patriotic, wrap-yourself-in-the-flag economic envy with true wild-west capitalist behaviour, whose very antithesis is GOVERNMENT...

Wed, 01/27/2010 - 04:29 | 207388 nikku
nikku's picture

Perhaps we will more gladly applaud him when, as head of the IRS, he (and his minions who believe in that great pillar of law--guilty until you can prove yourself innocent) starts applauding our tax evasion! (uh... make that your tax evasion--nervous tick)

Turbo-Tax Cheat: Not the point. 

Point: Hypocrisy... and sheer ass-hatness... on his way to a great post-government career at the Vampire Squid.

Wed, 01/27/2010 - 04:39 | 207391 Anonymous
Anonymous's picture

No Sh*t Kreditanstalt
Calling him a tax cheat,kind of gives some kind of morality
to what congress does to the little guy in the form of tax code,
The complete Internal Revenue Code contains more than 3.4 million words,
It is just that big so as to obfuscate.
What do all of these have in common
1.Banks
2.Cell phone carriers
3.IRS
4.Most politicians
5.A career criminal [con man]
6.etc..........its just business

Obfuscate=Make obscure or unclear

By the way all that code is to make someone else rich at the expense of those who can't defend themselves.

If you are a moral person you know taking money from a baby is wrong.
So how many of us understand the laws.
Let me get this straight I was born so now I have to pay you or I may go to jail and if I resist hard enough, I can get shot.
Wow sounds like freedom to me, NOT

Well here is a little test call IRS with a couple of things that don't quite fit in a simple Turbo Tax set up.
Call 3 times.
When I have tried it I got 3 different answers.
The one thing that they all agreed on was pay more than needed and I wouldn't have to worry about a fine.

How simple minded we must be to have the Ponzi scheme LARGE government scare us in to working for them.[Paying TAXES]

Sorry kind of need to stay Anonymous on this post.

Wed, 01/27/2010 - 09:15 | 207450 waterdog
waterdog's picture

a

Wed, 01/27/2010 - 09:20 | 207463 waterdog
waterdog's picture

Geithner was not an unsuccessful tax cheat. He was very good at it. He turned himself in because he knew he would be audited as a matter of policy before taking control of the Treasury. He spent his life from 1988 through 2008 at the Treasury; before that with Kissinger. It was the last step in his career. If he did not want to be Treasurer, we would not have known he was a tax cheat.

 

Wed, 01/27/2010 - 03:36 | 207374 Anonymous
Anonymous's picture

*yawn* same 'ol song and dance... bullish that it will work again...

Wed, 01/27/2010 - 03:42 | 207377 Anonymous
Anonymous's picture

So what's the over/under on how long before Timmy G. Is a Managing Director over at squid HQ, I give it 9 months.

Wed, 01/27/2010 - 03:51 | 207379 ED
ED's picture

A financial system can collapse; the needs/wants of the population still exist and the factors of production still exist. The world doesnt end. And perhaps a better system is built.

Wed, 01/27/2010 - 04:09 | 207380 Burnbright
Burnbright's picture

ahem (puts on Timmothy Geithner voice)

We believe that by injecting capital into the market and given enough time AIG's capital will be worth what we pretended it was worth when we paid for it.

Wed, 01/27/2010 - 04:15 | 207381 Anonymous
Anonymous's picture

Two at Fed Had Doubts Over Payout by A.I.G.

By GRETCHEN MORGENSON and LOUISE STORY

Published: January 26, 2010

Weeks after rescuing the American International Group with an $85 billion taxpayer loan in late 2008, Federal Reserve Board officials rejected a proposal that would have forced the insurer’s trading partners to return $30 billion in cash that they had received from A.I.G. in the preceding months.

The Fed chose instead to let the banks keep the cash and to receive additional billions from taxpayers. This decision was made, internal documents show, after two Fed governors expressed concern that such a plan might be “a gift” to the company’s trading partners, including Goldman Sachs and Société Générale, a major French bank. The documents were provided to Congressional investigators by the Federal Reserve and were obtained by The New York Times.

http://www.nytimes.com/2010/01/27/business/27aig.html?ref=global

Wed, 01/27/2010 - 08:36 | 207432 Tic tock
Tic tock's picture

Believe what you want to, really that's good. But give testimony to Congress based on facts, yes. ..Don't start off by saying you had a gut feeling and then looked for numbers to support it; at least not without forming an antithetical perspective. Seriously, he used to work at Goldman? Do they have Fat ladies in a cupboard there too?

Wed, 01/27/2010 - 09:01 | 207441 gmak
gmak's picture

<quote>

... We acted because the consequence of AIG failing at that time, in those circumstances, would have been catastrophic for our economy and for American families and businesses....

</quote>

 

Prove it.

Wed, 01/27/2010 - 09:02 | 207444 Anonymous
Anonymous's picture

just hope your "cellmate" doesn't have the nickname "Turbo"

Wed, 01/27/2010 - 09:08 | 207449 HEHEHE
HEHEHE's picture

Man I wish I could be there to cross examine that lame@ss defense

Wed, 01/27/2010 - 09:11 | 207452 waterdog
waterdog's picture

I think it is nice that Bernanke loaned his speechwriter to Geithner.

Wed, 01/27/2010 - 09:20 | 207461 pros
pros's picture

 

Silly statement that flunks any basic logic test.

 

Wed, 01/27/2010 - 09:46 | 207484 Anonymous
Anonymous's picture

Goebbels, Geithner - from the nose up there is a resemblance!
Compare the pics.

Joseph Goebbels
"The Poison Dwarf"

"If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”
-Joseph Goebbels

Wed, 01/27/2010 - 09:58 | 207493 Anonymous
Anonymous's picture

I hope that somebody on the panel asks that if the last two quarters show a profit based on PUBLIC information, then what are the earnings based on the information that is locked away in the SEC vaults and protected for national security purposes show.Hey Timmay?

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