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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 | Link to Comment 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 | Link to Comment 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 | Link to Comment Anonymous
Wed, 01/27/2010 - 00:20 | Link to Comment 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 | Link to Comment Cursive
Cursive's picture

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

Wed, 01/27/2010 - 01:25 | Link to Comment Anonymous
Wed, 01/27/2010 - 09:56 | Link to Comment MarketTruth
MarketTruth's picture

+1

Wed, 01/27/2010 - 00:20 | Link to Comment 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 | Link to Comment 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 | Link to Comment Anonymous
Wed, 01/27/2010 - 00:45 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment mikla
mikla's picture

+1

So clueless.

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

listen to me now and believe me later

Wed, 01/27/2010 - 14:22 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment faustian bargain
faustian bargain's picture

Franz?

Really?

Wed, 01/27/2010 - 02:40 | Link to Comment 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 | Link to Comment 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 | Link to Comment Anonymous
Wed, 01/27/2010 - 03:17 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment Anonymous
Wed, 01/27/2010 - 09:15 | Link to Comment waterdog
waterdog's picture

a

Wed, 01/27/2010 - 09:20 | Link to Comment 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 | Link to Comment Anonymous
Wed, 01/27/2010 - 03:42 | Link to Comment Anonymous
Wed, 01/27/2010 - 03:51 | Link to Comment 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 | Link to Comment 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 | Link to Comment Anonymous
Wed, 01/27/2010 - 08:36 | Link to Comment 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 | Link to Comment 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 | Link to Comment Anonymous
Wed, 01/27/2010 - 09:08 | Link to Comment HEHEHE
HEHEHE's picture

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

Wed, 01/27/2010 - 09:11 | Link to Comment waterdog
waterdog's picture

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

Wed, 01/27/2010 - 09:20 | Link to Comment pros
pros's picture

 

Silly statement that flunks any basic logic test.

 

Wed, 01/27/2010 - 09:46 | Link to Comment Anonymous
Wed, 01/27/2010 - 09:58 | Link to Comment Anonymous
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