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In Dramatic Decision Judge Finds Fed Bailout Of AIG Was "Illegal", Government "Violated Federal Reserve Act"
Earlier today, former AIG head Hank Greenberg's long-running legal battle of the US government came to a dramatic end when in a 75-page ruling, U.S. Court of Claims Judge Thomas Wheeler found that Greenberg was indeed correct in claiming the government overstepped its legal boundaries in its "unduly harsh treatment of AIG in comparison to other institutions" which was "misguided and had no legitimate purpose."
But because “the question is not whether this treatment was inequitable or unfair, but whether the government’s actions created a legal right of recovery for AIG’s shareholders" Wheeler found that Greenberg was not owed any money as AIG would have gone bankrupt without the government's forced intervention. Greenberg was seeking at least $25 billion in damages for shareholders.
The reason for the case is that years after the initial $85 billion bailout which eventually ballooned to $182 billion, AIG - with the government's explicit backstop and thus zero credit risk - managed to repay the government bailout funds and the government with a $22.7 billion profit. Greenberg argued that the pre-bailout equity holders deserved a piece of the pie, very much the same way that Fannie and Freddie stakeholders are also arguing they too deserve a piece of the post-government bailout pie.
However, “in the end, the Achilles’ heel of Starr’s case is that, if not for the Government’s intervention, AIG would have filed for bankruptcy. In a bankruptcy proceeding, AIG’s shareholders would most likely have lost 100 percent of their stock value" the judge found, and admitted that the pre-government bailout equity value of financial companies - since all of them were facing bankruptcy without a bailout - was zero. Whether this opens up the door to a class action lawsuit by all those who were short financials into the bailout and were then squeezed by the Fed's bailout which the court has found to be an "illegal exaction" remains to be seen.
Here are the key sections from the court ruling:
The weight of the evidence demonstrates that the Government treated AIG much more harshly than other institutions in need of financial assistance. In September 2008, AIG’s international insurance subsidiaries were thriving and profitable, but its Financial Products Division experienced a severe liquidity shortage due to the collapse of the housing market. Other major institutions, such as Morgan Stanley, Goldman Sachs, and Bank of America, encountered similar liquidity shortages. Thus, while the Government publicly singled out AIG as the poster child for causing the September 2008 economic crisis (Paulson, Tr. 1254-55), the evidence supports a conclusion that AIG actually was less responsible for the crisis than other major institutions.
Well, there was Lehman too, whose stock most certainly went to zero and which never got a government bailout but that was to be expected: after all Goldman needed to eliminate its biggest fixed income competitor at the time, and what better way than to wipe it out completely.
Wheeler continues:
The notorious credit default swap transactions were very low risk in a thriving housing market, but they quickly became very high risk when the bottom fell out of this market. Many entities engaged in these transactions, not just AIG. The Government’s justification for taking control of AIG’s ownership and running its business operations appears to have been entirely misplaced. The Government did not demand shareholder equity, high interest rates, or voting control of any entity except AIG. Indeed, with the exception of AIG, the Government has never demanded equity ownership from a borrower in the 75-year history of Section 13(3) of the Federal Reserve Act. Paulson, Tr. 1235-36; Bernanke, Tr. 1989-90.
In other words, there has never been a Fed-mediated nationalization of a private corporation prior to 2008. Which is accurate. It is also illegal according to the court, a ruling that may have dramatic repercussions for all future government/Fed bailouts of banks that Goldman deems relevant.
Starr alleges in its own right and on behalf of other AIG shareholders that the Government’s actions in acquiring control of AIG constituted a taking without just compensation and an illegal exaction, both in violation of the Fifth Amendment to the U.S. Constitution.... Having considered the entire record, the Court finds in Starr’s favor on the illegal exaction claim.
It is not quite clear why the Fed is equivalent to the Government in this case but we'll just let that slide.
Here are the details:
With the approval of the Board of Governors, the Federal Reserve Bank of New York had the authority to serve as a lender of last resort under Section 13(3) of the Federal Reserve Act in a time of “unusual and exigent circumstances,” 12 U.S.C. § 343 (2006), and to establish an interest rate “fixed with a view of accommodating commerce and business,” 12 U.S.C. § 357. However, Section 13(3) did not authorize the Federal Reserve Bank to acquire a borrower’s equity as consideration for the loan. Although the Bank may exercise “all powers specifically granted by the provisions of this chapter and such incidental powers as shall be necessary to carry on the business of banking within the limitations prescribed by this chapter,” 12 U.S.C. § 341, this language does not authorize the taking of equity.
So if they Fed is not authorized to "take equity", does that mean that the NY Fed trading desk at Liberty 33 or its backup desk in Chicago, also known as the "Plunge Protection Team" will have to do a firesale of all its stock, E-mini, and ETF holdings obtained as a result of levitating the market ever higher for the past 7 years? Inquiring minds demand to know.
The good news is that while the Fed's bailout of AIG was illegal, at least it was not unconstitutional, as that particular pathway would have likely led to that Constitutional "Expert", the president of the US, to get involved and opine on the "fairness" of a Fed bailout now and in the future.
A ruling in Starr’s favor on the illegal exaction claim, finding that the Government’s takeover of AIG was unauthorized, means that Starr’s Fifth Amendment taking claim necessarily must fail. If the Government’s actions were not authorized, there can be no Fifth Amendment taking claim.... Thus, a claim cannot be both an illegal exaction (based upon unauthorized action), and a taking (based upon authorized action).
Furthermore, the Court found that like in the BofA negotations over the Merrill rescue, the government effectively strongarmed AIG management into accepting the terms of the bailout it proposed:
The Government defends on the basis that AIG voluntarily accepted the terms of the proposed rescue, which it says would defeat Starr’s claim regardless of whether the challenged actions were authorized or unauthorized. While it is true that AIG’s Board of Directors voted to accept the Government’s proposed terms on September 16, 2008 to avoid bankruptcy, the board’s decision resulted from a complete mismatch of negotiating leverage in which the Government could and did force AIG to accept whatever punitive terms were proposed. No matter how rationally AIG’s Board addressed its alternatives that night, and notwithstanding that AIG had a team of outstanding professional advisers, the fact remains that AIG was at the Government’s mercy.
This would be especially accurate if an armed drone was flying outside of AIG HQ's during the "negotiation."
And yet, despite this clearly favorable to Greenberg ruling, the Court did not award him any damages. Why? For the simple reason that AIG was already effectively broke when the government stepped in, and as such there was be no residual equity value going into Lehman weekend and subsequently.
In the end, the Achilles’ heel of Starr’s case is that, if not for the Government’s intervention, AIG would have filed for bankruptcy. In a bankruptcy proceeding, AIG’s shareholders would most likely have lost 100 percent of their stock value. DX 2615 (chart showing that equity claimants typically have recovered zero in large U.S. bankruptcies). Particularly in the case of a corporate conglomerate largely composed of insurance subsidiaries, the assets of such subsidiaries would have been seized by state or national governmental authorities to preserve value for insurance policyholders. Davis Polk’s lawyer, Mr. Huebner, testified that it would have been a “very hard landing” for AIG, like cascading champagne glasses where secured creditors are at the top with their glasses filled first, then spilling over to the glasses of other creditors, and finally to the glasses of equity shareholders where there would be nothing left. Huebner, Tr. 5926, 5930-31; see also Offit, Tr. 7370 (In a bankruptcy filing, the shareholders are “last in line” and in most cases their interests are “wiped out.”).
A popular phrase coined by financial adviser John Studzinski, in counseling AIG’s Board on September 21, 2008 is that “twenty percent of something [is] better than 100 percent of nothing.”
All of this is absolutely correct. It also applies to Goldman, JPM, BofA, Citi, Wells and so on: all of the banks which accepted a government bailout either in equity, loan, discount window access, and so on, primed their stock to the point where the equity was worthless. As such, the entire equity tranches of the US financial system at the moment Lehman failed was worth precisely nothing. It is also why the Goldman controlled Fed did everything in Hank Paulson's power to provide the Fed with a blank check to bail out Goldman Sachs the US financial system at any taxpayer means necessary.
Which is precisely what happened, to the tune of trillions and trillions of liquidity injections, government backstops and loans into what was at that moment a financial system which was operating but whose equity was for all intents and purposes utterly worthless.
* * *
Which takes us to the Court's closing arguments:
the Court finds that the first plaintiff class prevails on liability because of the Government’s illegal exaction, but recovers zero damages.
As the Court noted during closing arguments, a troubling feature of this outcome is that the Government is able to avoid any damages notwithstanding its plain violations of the Federal Reserve Act. Closing Arg., Tr. 69-70. Any time the Government saves a private enterprise from bankruptcy through an emergency loan, as here, it can essentially impose whatever terms it wishes without fear of reprisal. Simply put, the Government often may ignore the conditions and restrictions of Section 13(3) knowing that it will never be ordered to pay damages.
And there you have it in a nutshell: 103 years after the Aldrich Plan to create a National Reserve Association in which private, commercial banks could create money out of thin air, failed to pass and instead an "impartial" Federal Reserve was created, the US Central Bank is nothing more than what its founder on Jekyll Island first envisioned: a private enterprise above the law, which caters entirely to commercial bank, bails them out, or nationalizes them illegally as it sees fit, and generally does whatever it wishes without any public oversight.
As to the Fed's take on just how illegal its actions were, or if - gasp - it learned its lesson and will no longer illegally "bail out" this bank or that, here is the answer.
The Federal Reserve strongly believes that its actions in the AIG rescue during the height of the financial crisis in 2008 were legal, proper and effective.
And judging by the public's response to the events of 2008, where it is clear that not only the Fed but nobody learned anything, the next bailout of US commercial banks will proceed very much like the previo sone. And the next. And the one after that.
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So Bernocchio is going to jail? Paulson and Timmay too?
Send the chairman to jail now! 100 years.
Sweet! Which tree is the hangin' tree?
That is good news that they are revoking the FEDs charter and going to publicly try the entire board with a capital offense.
Wait, what, a FINE?
Can they at least prohibit the FED from paying the fine with freshly conjured joobucks?
No?
Oh well. At least they were told it was wrong. That makes me feel better. I bet you that they will really follow the laws again (cough cough buying F&F MBS which is blatently illegal).
pods
So What? No one will go to jail, and the taxpayers will be screwed out of billions. Meanwhile, carry cash while driving, and the local police will be more than happy to confiscate it to fund their salaries. This is how a crony criminal capitalist system works.
If it meant any thing, it would be important.
Transfer the zero s and one s and it will fade quietly.
I've read the article twice now and I come away convinced there's less here than meets the eye. Declaring the actions illegal has no weight going forward than I can see. Here's what I think DOES have weight: Should similar circumstances be encountered in the future, the legal precedent being set in this case is that the "they would have been put out of business without our assistance" defense has been FULLY upheld.
USC, right there... United States Corporation's Code....
Not law...code...
* Yawn! *
- American Public
So can one conclude that what happened with GM was also an "overstepping of bounds"?
Free John Corzine!!!
Is this an Onion article?
Yup. And it's funny (odd) how the Fed just "doesn't have the tools/rules" to execute other actions that it doesn't want to perform. That would be those actions that don't benefit the ruling financial class.
Right. I see only a negative precedence here. It was illegal, but you can't get damages because it was illegal so getting damages would also be illegal. If it were a legal action, you'd get damages, but then they wouldn't have done it, because theyd have been liable. Catch 22. We are doomed.
Translation of the Judge's ruling for the terminally stupid:
Yes, the defendant was guilty of rape, and yes, it was brutal and repeated however with this guilty plea we can not see any reason for punishment because the defendant was considerate enough to use breath mints before brutalizing the plantiff anally.
Hence, if one wishes to commit financial rape, don't forget the Certs.
My butthole still hurts...
But the new Liberal Illuminati say you're supposed to enjoy buttrape.
They are all going to get 'Corzined', which means nothing at all will happen to these fucking criminals.
Legal proceedings are so 90's, wait 80's, no no 70's, okay ancient
To qoute one of the biggest criminals and liars of our time
“What difference, at this point, does it make?”
This just proves you don't want to be on the wrong side of a Goldsack trade when the SHTF.
http://opinionator.blogs.nytimes.com/2011/02/16/how-goldman-killed-a-i-g...
"Here comes the wrist slap... and it's gonna hurt."
There's the problem with your logic. You believe laws and ruling apply to the Fed.
Its not the Fed at fault, its the Treasury namely Honk Paulson. And its NOT a foregone conclusion that its shareholders would have been wiped out.
Read the very first chapter of David Stockman's book THE GREAT DEFORMATION and you will have all the facts.
Actually, check his blog because I'm sure he will be out with a full commentary as soon as his thesaurus-on-steroids returns the appropriate results...lol.
fum a nigrows veeuw, dey all be hangin' trees bruthah...
The tree doesn't matter just make sure it's a short rope.
That is a serious can of worms that was just opened. Will make for good theater if the Shorts pursue this. And no, nobody will serve a minute in jail.
"So if they Fed is not authorized to "take equity", does that mean that the NY Fed trading desk at Liberty 33 or its backup desk in Chicago, also known as the "Plunge Protection Team" will have to do a firesale of all its stock, E-mini, and ETF holdings obtained as a result of levitating the market ever higher for the past 7 years? Inquiring minds demand to know. "
Confiscation and no-bid sale to political cronies is not Nationalization.
Abuse of Seigniorage by The FED, counterfeiting credit/money to 'buy' privartely held property, is a form of blatant theft.
The Shorts owned the system and were robbed/defrauded by a rouge Central Bank at the behest of it's constituent Private Commercial Banking fiefdoms and rubber-stamped by the Bank Lobby bought CONgress.
How many lives did they destroy? Hell is too good for them.
Why WILL you not accept the truth ??
If AIG had failed then Goldman would have failed. Enough said. We already know who is above the law.
Laws of men yes, but there are laws that governmen every man, willing or not, and at the end of the day, those are the laws that always prevail.
I suspect that, despite secrecy, lies, and manipulation, the game can't go on forever.
(QE will have to end, hyperinflation will ensue, and the people will revolt.)
The only question that remains is, are your pitchforks sharp yet?
… there’s nothing
worse than a dull pitchfork ~
Use a spoon, it's dull and will hurt more...
Too much work. Pointy and/or sharp is the way
AIG's derivative exposure was very large and could have caused the big crash they feared.
Caption from a photo of a donkey's ass with it's balls cut off?
Absolutely not, check out your own state's insurance underwriter's regulations.
You are totally wrong. Read Stockman's book, the first freaking 13 pages.......
I've said since 2009, the Rule of Law is dead in this country. Now a judge confirms it.
Actually...
If you where short on AIG back then.... when the FED stepped in...
doing a illegal action...
YOU CAN SUE THEM FOR LOSS OF PROFIT!!!!!!!
That would be antisemitic.
Jewish lawyer opens a Japanese restaurant and calls it....Sosumi.
No that was the great genius and erstwhile capitalist, Steve Jobs, ripping off the Beatles.
Hope you're in a comfy bed, because you're gonna be asleep a long time.
"Which takes us to the Court's closing arguments:
the Court finds that the first plaintiff class prevails on liability because of the Government’s illegal exaction, but recovers zero damages."
As noted by the author, this makes no sense. If the action was illegal, then the Government is liable for damages. If there are no damages, there is no liability. If there is no corpse, there was no murder.
You are quite correct they seem to have ruled on something they were not asked to rule on. But who could resist.
Absolutely correct. Liability first, then damages. Separate hearing.
We close the book on another lawless farce without any consequences for the perps...
The NSA did not have enough blackmail stuff on this judge? Not to worry, the next higher court will throw out this decision in the finest democracy in the history of this planet.
The stunning implication of this passage is that NSA spying targets not only ordinary American citizens, but also Supreme Court justices, members of Congress and the White House itself. One could hardly ask for a more naked exposure of a police state.
https://www.wsws.org/en/articles/2013/09/13/surv-s13.html
The best democracy that money can buy!
… that wouldn’t be bad --
This democracy just gets rented !
You seem to be missing the part where this worked for the benefit of all parties (Fed, AIG, GS...), at the expense of "the people."
This was just another attempt at rent seeking with the added bonus of giving the Fed even more flexibility (aka "no damages").
I can't wait to see who's going to sue from the damaged short side of this scam.
Cough, cough....General Motors....cough
Yes, GM should have simply become a bank like Goldman, heck, they probably have more loans on the fucking books anyway...
Yes, the government bought up all of the sinking ships, hence Government Motors is still up and running...
When the financial fraud ends, the fire sales will begin, and those with the money get first dibs...
(Read the Ultra Wealthy Elite families who control it all...)
Anyway, the Government is a Family Business, and it's the biggest business of all, you'd think people would have woken up by now...
the government "bought up" you mean printed new $ and took over corporations. What do you think all the corporate buy backs are? Its all centrally "owned" controlled. Google, apple especcialy. With out rules, they can print and buy everything.
Ally?
Penn Central's debt is more than likely still being paid off by a portion of each and every employee's federal income tax payment. I believe they were bailed out in 1971. Of course I have no proof, but I am highly suspicious.
Sweet, can we hang Hank "tanks in the streets" Paulson and every member of congress that voted yes on TARP/TALF now?
tick tock motherfuckers...
Hanging is too good for Hank. Certainly we can do better? Abused corpse goes without saying.
“it's a safe banking system, a sound banking system. Our regulators are on top of it. This is a very manageable situation.”
- Hank the Crank Paulson July 20, 2008
“We are working through a severe financial crisis caused by many factors"
- Hank the Crank Paulson November 20, 2008
Hm, I forget about the dates. Was his second quote before or after he got down on his knees to beg Congress for a bailout?
Those with the guns make the rules - and the rules say that the government and big banks can do what they wants without the need to pay compensation or fear of prosecution. Those rules will not change until someone else is holding the guns.
Pass the nail gun and have the DOJ declare a mistrial.
I'd like to hear what a US judge would say about the Fed's rescue of European banks via gazillions in dollar swaps. Remind me again why it's OK to put me and the rest of the American tax donkeys on the hook for Europe's bad bets?
the courts, the doj, useless as tits on a bull
I dunno, I think the bull kind of enjoys having them. I know I'd enjoy 'em.
I watched that Hank film on Netflix about Paulson. Good actor really makes you believe he wasn't doing it for Goldman.
I'm pretty sure the Bear Stearns, Lehman, Countrywide, Wachovia, WA Mutual, etc... deals were all legitimate too.
What a pile of shit the USA has become.
I am beginning to think words like illegal and fradulent have been redefined recently. Seems to me these sort of words when attached to behavior typically have handcuffs involved.
depends on what the meaning of PRINT is.........
hey Judge the Federal Reserve Act violates the constitution....get to the root of the problem for the love of god
IN FINE PRINT. but the constitution is just a piece of paper of no more value than an frn.
The DoJ needs to prosecute Bernanke !!
my assumption is that if something was found 'illegal', there would be some recourse. since this will undoubtedly not be the case, this is all just farsical bullshit...
Nail gun orders are rising on amazon
Odd that Lehman, Bear and the others that were forced to be acquired are not suing as well.
Sophisticated Investor/Banker Greenberg turns out to be a Whiny Socialist.
Big Surprise. S/
Edit:
Starr, Greenberg & Thomas Wheeler are Socialist.
"....both in violation of the Fifth Amendment to the U.S. Constitution..."
- No Private Property can be taken for Public Use without adequate compensation (5th Amend)
BS Judge Wheeler. In Capitalism if you fail, you lose all your business assets and in various proceedings you are out. Otherwise you are saying Corporate Bailout are the new Process for all US & Transnational Corporations and other Entities.
Corporate Bailouts = Socialism, and all bailouts are corporate bailouts
Edit: Well okay it is also Fascism.
Fed's worst nightmare: The 'ghost of 1937'
Well let's start with clawback of all the Backdoor money to Goldman. And clawback the $500 million tax free to Hank Paluson too. Anyone short during this time frame should be allowed to pick 3 heads of their choice, to be hanged for Treason
I'm too angry to comment!
I'm sure their scared shitless,,,,,They'll get the John Corzine treatment..
MUHAHAHA
As for you my friend don't get cought with a fucking join or it's 15 years in the gray bar hotel..
The "Government" violated the Federal Reserve Act or the Federal Reserve Bank violated the Federal Reserve Bank? Or the Treasury and the Federal Reserve Bank conspired to violate the Federal Reserve Act?
They won't even get the Corzine treatment. There will be a Memorandum of Understanding and the government may have to write and file a few quarterly reports explaining how they have reformed, then in a couple of years the whole thing will be forgotten.
"Simply put, the Government often may ignore the conditions and restrictions of Section 13(3) knowing that it will never be ordered to pay damages."
Probably a simple oversight, a coincidence even, and it will be immediately corrected via appropriate legislation...in fact, given the altrusim of the Fed, I bet it will voluntarily reimburse Mr. Greenberg et al. for every penny they claimed.
"....Shall recover 'ZERO DAMAGES'".......
Indeed.
An excellent decision, and for those here and elsewhere who believe any one group or institution reigns "Supreme" be that the Federal Reserve, and/or others, Proof such is not the case.
The Great Strength of American Jurisprudence isn't that EVERY WRONG is called to Account; but rather that ANY Wrong CAN be called to account, No Matter the Parties.
For many who rail against the Federal Reserve, this Decision demonstrates they are NOT Above the Law, and for those who really understand what is unfolding, a taste of what is to come:
As I have said, TRILLIONS, NOT BILLIONS, will be PERMANENTLY LOST by CURRENT RENTIERS.
Parenthetically, this case is a textbook example of the Vital Legal Principle of "ULTRA VIRES" applied at the Highest Levels; and reflects that that Principle is alive and well in American Jurisprudence.
Right Decision, on the Right Grounds.
The only ones who will be paid here are the Lawyers.
LOL WUT?
There are no such things as "legal principles." There is nothing but power over others and the ability to wield it. Intangibles live only in your mind.
Fancy suits and legal sophistry are but shallow efforts to shiny up the tarnished facade of integrity.
Many years ago I had thousands of books in my Personal Library; now most of that is in Digital form.
But of the appx. 100 Hardcovers that I chose to keep permanently, among them is Mises, Hayek, Rothbard, Rand, etc.
I am a TRUE CAPITALIST and am opposed to ALL FORMS OF SOCIALISM.
If I had the POWER I would freeze ALL GOVERNMENT SPENDING and CUT EVERYTHING by 30-40% Across the Board.
Like "The Gipper", I agree wholeheartedly "Government isn't the Solution; Government is the PROBLEM."
With regard to the FEDERAL RESERVE, if they were abolished today, and ALL of their "POWERS" reverted to "The People", it would eventually amount to DIFFERENT PEOPLE DOING THE SAME THING.
In fact, were that the case, then I would indeed be a "believer" in "Hyperinflation":
For anyone who believes that the Federal Government is going to more FAIR or RESPONSIBLE than the FEDERAL RESERVE, is truly Delusional.
The Difference in the Government and the "FEDERAL RESERVE" comes down to this Old Adage:
"Never Trust a Man Who Doesn't Care about Money".
At least I understand where the FEDERAL RESERVE is coming from, and thus can amply PROTECT MY OWN INTEREST, as the "Individual" that the above Men expound upon.
As for George Carlin and Mark Twain, both were Wise and Talented Men that I have drawn much from.
You Say:
"There is nothing but power over others and the ability to wield it."
Indeed.
And ?
This is HUMAN NATURE as it always has been and always will be.
Well this is where I think we are going with Globalism, Open Borders, Free (Slave) Trade, TAP, TTIP(T-TIP), TISA, TAA, TPA:
Check what the British did to Ceylon.
https://en.wikipedia.org/wiki/Kandy#Colonial_era
"...under British rule for 32 years, in which the British had expropriated the common land of the peasantry and reduced them to extreme poverty. The Kandyan villagers were forced to abandon their traditional way of life and become wage-workers in the abominable conditions that prevailed on these new estates and plantations that had been introduced, despite all the pressure exerted by the colonials the Kandyans refused. This forced the British to bring in hundreds of thousands of Tamil coolies from southern India."
Now that is power.
Like the kind of Power that can use the Chiefs of a Country to establish their power (a kind of Colonialism & a Central Bank).
Another kind of Power is to get a Country like the USA which is far from Europe to enter WWI & WWII.
Thank you for the defence of the legal system that tries to judicate law and order to matters brought to it's attention. With repect to the potential profit the the FED may have derived, the action, thus the profit it taxable as to it not being covered as non-taxable under the law. Now we go to the evasion matter at hand, along with penalties and interest tha the FED should pay up. You could say that this is a set up for a socialistic (communist) takeover of the FED and an examination of its books (perhaps one of those secret courts that NSA used is needed for this one, national security and all that)... LoL
So the FED was "pretending" to be a legal, solvent entity and got caught lying about who it's "Daddy" really is? Just like that NAACP woman?
Hmmmm.
Oh we have a Doubting Thomas, Thomas Wheeler.
"The Government’s justification for taking control of AIG’s ownership and running its business operations appears to have been entirely misplaced."
Never heard of RTC & Receivership, Mr. Wheeler?
"The scandal was followed by a number of attempts to adopt campaign finance reform"
Failures and Assistance Transactions of all Institutions by Resolution Trust Fund (RTC) for the United States and Other Areas
(over 747 Banks taken over by the RTC in the Savings and Loan Crisis 1989-1995, and like 5,000 Executives Prosecuted like Charles Keatings of the Keating Five)
Annual, Not Seasonally Adjusted, BKIRTCA641N,
https://research.stlouisfed.org/fred2/series/BKIRTCA641N
"The savings and loan crisis of the 1980s and 1990s (commonly dubbed the S&L crisis) was the failure of 1,043 out of the 3,234 savings and loan associations in the United States from 1986 to 1995: FSLIC closed or otherwise resolved 296 institutions from 1986 to 1989 and the RTC closed or otherwise resolved 747 institutions from 1989 to 1995.[1] ---- The ultimate cost of the crisis is estimated to have totaled around $160.1 billion, about $124.6 billion of which was directly paid for by the U.S. federal government.[1]"
"The scandal was followed by a number of attempts to adopt campaign finance reform"
https://en.wikipedia.org/wiki/Charles_Keating
https://en.wikipedia.org/wiki/Keating_Five
https://en.wikipedia.org/wiki/William_K._Black
https://en.wikipedia.org/wiki/Savings_and_loan_crisis
https://en.wikipedia.org/wiki/Resolution_Trust_Corporation
"The five senators – Alan Cranston (Democrat of California), Dennis DeConcini (Democrat of Arizona), John Glenn (Democrat of Ohio), John McCain (Republican of Arizona), and Donald W. Riegle, Jr. (Democrat of Michigan) – were accused of improperly intervening in 1987 on behalf of Charles H. Keating, Jr., Chairman of the Lincoln Savings and Loan Association, which was the target of a regulatory investigation by the Federal Home Loan Bank Board (FHLBB). The FHLBB subsequently backed off taking action against Lincoln."
"From 1986 to 1995, the number of federally insured savings and loans in the United States declined from 3,234 to 1,645.[23] This was primarily, but not exclusively, due to unsound real estate lending.[38]" (UNSOUND Real Estate Lending!)
"RTC: It was established in 1989 by the Financial Institutions Reform Recovery and Enforcement Act (FIRREA), and was overhauled in 1991.[2]"
Wikipedia links have all been scrubbed but William K. Black states they prosecuted a huge number of Banking Executives... maybe 5,000 by the End of the 1990s or into the 2000s.
They did, any many actually went to prison. How novel. At this point simply start taking fucking heads...
Ah, Lincoln Savings and Loan scandal. Takes me back. That was when I first learned about the financial term "daisy chain". Lincoln had such political pull they actually forced the first examination team to be transferred to San Francisco and off of Lincoln. Jerks.
Hm... sounds like used for Russel small caps.
Investors who do not look carefully at a stock are the usual prey of a daisy chain. These investors are typically caught owning a stock that continues to depreciate long after the daisy chain sells out their positions for a profit.
Read more: http://www.investopedia.com/terms/d/daisychain.asp#ixzz3dAF9VPID
Silverado Savings and Loan
https://en.wikipedia.org/wiki/Savings_and_loan_crisis#Silverado_Savings_and_Loan
Bush family member.
The forensic evidence that they planned this 2008 Crisis and the Sub-prime Mortgage Accounting Control Fraud is all there. And after the S&L they knew they had to bury the process, procedures, and institutions that prosecuted the Bankers and that included putting the Kabosh on DOJ & FBI & FDIC & SEC & FINRA & FHA & RTC.
It is plain as day for Judge Thomas Wheeler to see and if not he just has to watch Videos by William K. Black.
Everyone is just corrupt. Hell MSM won't even pick up this story since it is business related.
And who was the NaziHMFIC at that time?
the usual suspect.
Well in 1980 Depository Institutions were deregulated under Jimmy Carter. George H.W. Bush was in during the Keating Five Testimony in 1989. Alan Greenspan was Head of the FED. Could be this was developed at the end of Ronald Reagan's Term (Alzheimer Era).
They can still find Bernanke broke federal laws with those loans he made to foreign banks and never notified congress about.
AND ALSO NOT DO A FUCKING THING ABOUT IT.
Given he was a BIS board member at the time, there's not a single law outside of that institution that has any jurisdiction over his actions.
Duh, six years too late assholes.
Will that asshat/criminal Hank Greeberg be paying back all the money AIG recieved? If not, take his fucking head!!!!
a toothless verdict, no penalty for breaking the law..some are more equal than others..how many times do I have to hear ringing in my mind "No controlling legal Authority"? the fed is outside of our laws and even when found guilty of breaking them,. there is no remedy. what is the definition of crime? for some it is "we did it now fuck off."
duplicate
Well it's the wrong Venue.
"U.S. Court of Claims Judge Thomas Wheeler"
This was just a frivolous Lawsuit in Civil Court.
- DOJ Won't touch it after the S&L Crisis exposed Campaign Contributors to scrutiny.
every time we shorted a "walking dead corp" after 2008 we got hair cuts, every time..does the FED owe me?
after this ruling it should, but then the law and judges would have to apply the law, well they are paid to look the other way, "no standing rulings" for me and you, and the crooks around the fed window get fat. Just US.
"Federal Reserve Bank of New York had the authority to serve as a lender of last resort under Section 13(3) of the Federal Reserve Act in a time of “unusual and exigent circumstances,”
So what? It is an Option. It is not mandatory!!
- Hey Judge Wheeler, nice playing Monday morning Quarterback, huh? Why don't you stick to watching TV!!
- Judge, you trying to say the Federal Reserve should be Micro Managing Corporations as a Mandatory Course of Action??!!! Maybe you want the FED to manage Receiverships too??
So what is CONgress going to do about this..............................nothing.
didn't the government take general motors as well? or maybe my old brain has dementia
HARSH?
OMG. Government acquired no equity because there was no positive equity remaining.
FAIR would have been a clawback of all executive salaries for the past ten years, how about ruling on that?
seriously! I can agree w/judge that fed exceeded it's statutory authority (& numerous people pointed this out as it was happening yrs ago) but to imply the aig board/management were "bullied" is beyond laughable. that they have the audacity to suggest they should be benefeciaries of a 100% artificial distortion which was only necessitated b/c of THEIR recklessness is beyond comprehension...
Yes! Edit I Mean Clawback of TBTF is appropriate and likely for all corporate bonuses when there is a bailout.
This is simply...Congress and thier family's had and have stock in AIG...so did/does Geitner, Bernanke, Paulson, Bush, Obama, Boehner, Palosi, Reed, etc....The Lawyers and Bankers got bailed-out...Remember, 50-55% of The House and Senate are Lawyers...Stop electing Lawyers!
How many of those lawyers and former lawyers are former prosecutors?
Prosecutors are a special breed of lawyer trained in burying evidence, misleading the public, playing the press like a fiddle, and running for election.
"the board’s decision resulted from a complete mismatch of negotiating leverage in which the Government could and did force AIG to accept whatever punitive terms were proposed"
I really would not have believed I would live to see the day I defended paulson or geithner but fed/treasury did not create the mismatch of leverage, aig did! is it a "punitive measure" to take cars keys from a frat kid in alcohol poising & make them agree to rehab as you're rushing them to the er?!? I'm no fan of how this mess has been handled (for different reasons) and can agree they (fed) probably didn't technically have legal authority but the arrogance/chutzpah of these people is astonishing...
Hey Judge Wheeler there is nothing in the US Constitution that say the USG can Provide Bailouts to Corporations. It is a Power that has been invented out of thin air.
You should have kept your Pie-Hole shut!
There is no provision for much of the Spending the Federal USG does. Often through Activism, Protesting, Violence we see need for Federal Laws & Legislation to protect people from commerce, corporations, and poverty. But this never included being a Superpower that starts foreign wars with exponential increases in Federal Budgets and Huge Central Government Power over the States and in support of the biggest Corporations in the world.
Judge Thomas Wheeler you are part of the Problem. You have been corrupted by the system.
Hey Liverlips, this is fight club you arrogant piece of trash this federal reserve notes are not money ok fuck wad? Money has to be backed by something worth caring about. No matter how many nbooks you claim to read you will always type something or say something to reveal what a fool you are. i pity the fool
"i pity the fool"
Indeed......
Mr T- ???
Excellent article, &
GREAT SUMMARY:
America has become the victim of a prolonged HOME INVASION, whereby the best organized gang of criminals, the international bankers, aka banksters, were able to move in and take control of the AMERICAN FAMILY. The resulting systems of debt slavery backed by wars based on deceits have become runaways, with the resulting debt insanities headed towards provoking death insanities ...
It is politically impossible to implement any adequate reforms. Rather, the main question is what, if anything, may be able to survive through the social storms caused by the eventually psychotic breakdowns of the systems of enforced frauds which have driven that debt slavery system to become debt insanities. The main question is what, if anything, might survive through the collapses into chaos of globalized systems of electronic frauds, backed by the force of atomic bombs, which have enabled the existing debt insanities to become too many orders of magnitude TOO BIG TO FULLY COMPREHEND.
In my view, the deeper issues were that the debt controls were always backed up by the death controls, and therefore, runaway debt insanities driven by the banksters' HOME INVASION establishing the MAD Money As Debt systems will not be stopped in any other ways than by their own MAD self-destruction. Thus, the issues for the future are primarily whatever might emerge from the death insanities, that may survive through to become some new death control systems, arising from the seeds of the old systems.
To be realistic about the social situation, as SUMMARIZED CORRECTLY IN THE ARTICLE ABOVE, the political economy of the USA, as well as most of the rest of world, is almost totally based upon triumphant organized crime, and therefore, the only genuine resolutions to those kinds of political problems will end up being the emergence of some new systems of organized crime, after the currently established ones drive through their own MAD self-destruction ... However, since there has never been anything before in human history that was remotely close to the current situation of electronic frauds backed by atomic bombs, there are no coherent ways to possibly predict what happens to those established systems of enforced frauds overreaching and overshooting to unprecedented degrees ...
The banksters originally were able to make and maintain systems of paper frauds, backed by gunpowder force. However, globalized electronic frauds, backed by atomic bombs, are trillions of times BIGGER, to the degree that one can not possibly predict how their basic contradictions would work themselves through ... AS ALWAYS, the essential problem is that being able to enforce frauds never stops those frauds from still being false. Therefore, the social successfulness of financial systems based upon enforced frauds constantly becomes more psychotic, the more successful that ability to enforce frauds becomes.
Since the frauds are electronic, and the threat of force that backs those up is atomic, it has been possible for the banksters' triumphant organized crime, manifesting as systems of legalized lies, backed by legalized violence, to jump its guide rails, to the degree that it no longer bothers to even properly legalize that anymore. Thus, the established systems of ENFORCED FRAUDS HAVE BEEN AMPLIFIED TO ASTRONOMICAL SIZES, and so, able to continue to grow at an exponential rate, to the degree that that is now practically impossible to fully imagine.
The whole world is dominated by triumphant organized crime, which has been able to get away with doing that to degrees which have been magnified by many orders of magnitude greater than ever before in human history. On the way there, the established systems, based on ENFORCING FRAUDS, have become PSYCHOTIC and CRIMINALLY INSANE, due to the paradoxical ways that being able to back up lies with violence never stops those from still being lies, but rather, drives civilization controlled in that way to become ever more incomprehensibly and inconceivably corrupt and crazy!
I've noticed that The Federal Reserve, Uncle G.™ and Wall Street all have a peculiar habit of mistaking liabilities for assets. CNBC should be all over this developing story.
The power of “Just Us” and their minions disappears once the FRN USD reaches it's intrinsic value of used toilet paper.
I have often wondered if Ben Bernanke would have demanded Blankfein's resignation during this debacle if they hadn't lived in the same house at Harvard. Lloyd keeping his job and his smirk is one of the great injustices of this immorality play. What was really happening was pretty clear to the insiders after all - Buffett demanded that Lloyd couldn't sell his G-S shares until the loan from Berkshire was repaid, so you know WB didn't believe the NYT version of events. The foundation of a sense fair play that governed the country after WW2 ended with Blankfein's smirk. I also wonder if Bernanke resents the hundreds of millions Lloyd has accumulated since then.
Wow, Judge Wheeler is now a front runner for the SCOTUS.
Way to play your cards.
Liberty is a demand. Tyranny is submission.
Guillotines though, don't play cards.
Who would want to join an organization with immense power, a lifetime appointment, huge salary, no requirement to ever do any work, no responsibility for decisions you make, with staff, pension, office, and media fawning over you? You can make your choices by throwing darts for all they know.
It's an organization that needs to be and will be destroyed at some point. They are as bad as the Federal Reserve.
So? Is anybody going to jail or not?! I am not interested reading 10+ A4 text milking down the public rage, I want to see real oneliner sentence "jailed for 44 years" with actual photo proof!
Law broken and no punishment. Epic Fail. The Bernanke. Timmg G, and the rest of the hoods should be personally liable.
Well, hell, bonuses for everyone then!
Yes they are laughing at us all. The best part is this joke goes right over most heads. Text book chain yank. What like 6/7 years a few million $ chain yank.
As long as we keep bakin pies, they will keep yankin our chain.
PS A kid told me a joke today. How do you make it in the real world? Replace Fuck you asshole! with. Great idea boss! Im all for it!
In Dramatic Decision Judge Finds Fed Bailout Of AIG Was "Illegal", Government "Violated Federal Reserve Act"...then suddenly convulses, milk shooting out of his nose as his judge friends all yell, "Oh no you DIDN'T!"
It's a trap for the FED at this point. The question is at what court is this going to stop? It needs to go to the Supreme Court and if the US Supreme Court confirms this ruling, then the Fed will know that they can't do this again. I submit that on this ruling the FED owes taxes.
.....not unconstitutional?????? The entire fucking fed is unconstitutional.