AIG

It appears the only thing worse in this world than a measly $500,000 salary is getting no salary at all. And that's exactly what is about to happen to AIG General Counsel, Anastasia Kelly, who before joining the bankrupt firm, was a GC at such reputable organizations as MCI/WorldCon (sic) and Fannie Mae. To paraphrase the objections against a very prominent Treasury Secretary recently, the question is not whether or not she will leave the job, the question is how she got it in the first place. Kelly, who recently was protesting the $500k salary cap imposed by Pay Despot Ken Feinberg, yet was in Benmosche's black book, will likely be out of the organization, presumably involuntarily, by year end. We are confident that with the economy rocking she will be able to find a job that pays her much more in line with her true skills... which based on her track record hopefully involves more than leading three sequential companies straight into bankruptcy.

It has been a while since Alan Grayson had a public appearance. Today the man comes back with a bang.

To us, the confirmation hearings last week before the Senate Banking Committee only reaffirm in our minds that Benjamin Shalom Bernanke does not deserve a second term as Chairman of the Board of Governors of the Federal Reserve System.

Senator Jim Bunning (R-KY) conveys to Ben essentially our view, but does it with an absolutely blistering delivery. Ouch.

The battle over corruption inside the Fed and the control of our central bank by the big city banks had been going on for a century and more. That is why the scandal and criminality of the AIG bailout demand the attention of every American. Happy Thanksgiving, BTW

Courtesy of the SIGTARP's latest report, the events on November 6 and 7th, when Wall Street lackey extraordinaire Tim Geithner decided to pay $27.1 billion to make all of AIG's counterparties whole, have attained even more granularity. The main thing disclosed is just how willing Geithner was to extract absolutely no concessions from AIG's counterparties, and how after putting in a token effort, the best he could do was to just get UBS to agree to a contingent 2% haircut, which would only be effective if all the other counterparties agreed to the same. Of course, this approach failed, and the final "make whole" bailout was a foregone conclusion from the beginning. That Tim Geithner approached his duty of "preserving" taxpayer capital with such disdain, would be grounds for immediately termination for cause in any normal, non-banana society. Alas, America has long ceased being representative of one.

Timmy Geithner: loyal servant to the big banks.

"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."

- Neil Barofsky

"I have been a big critic of the systemic risk posed by excessive leverage, problematic CDOs and the credit derivatives written against them. But I did not specifically criticize Goldman’s deals until it became an issue of public interest when AIG blew up. Goldman may not have to answer to sophisticated investors, but it should answer for its role in the systemic risk posed by AIG’s near collapse, its role in the way in which AIG was bailed out, and the fact that the U.S. taxpayer had to bail out the global financial system along with a number of Goldman’s trading partners." - Janet Tavakoli

Technical Profiles of 8 Key Stocks: AIG, BIDU, CAT, CELG, DRYS, IBM, GS, SKF

And another one for the idiot anals of the Obama administration. After taking over the biggest nationalization in history (with the exception of the GSE's but those are a special case), and being paid to run a zombie bankrupt company instead of saving everyone a few dollars and packing it in, Robert Benmosche, who became CEO of AIG a mere three months ago, has threatened to quit in protest to stern governmental compensation oversight. At least Benmosche made some very powerful enemies during his short time in the hot seat, including the NY AG. Perhaps Ken Lewis will consider the corner office position once Mr. Benmosche returns to his palatial Croatian estate. Unless, of course, the lawsuit against the former BofA CEO does not go quite as well as expected. Ironically, running AIG out of jail cell would be the crowning achievement of what the current version of capitalism is all about.

"During AIG’s bailout, Goldman had influence over the decision to use public funds to pay 100 cents on the dollar for these CDOs (the underlying risk of the credit derivatives), but none of the information about the volume of Goldman’s trades with AIG—or the Goldman CDOs hedged by AIG’s other counterparties—was made public. Goldman’s public disclosures in September 2008 obscured its contribution to AIG’s near bankruptcy and the need to bailout Goldman’s trading partners in AIG related transactions. Goldman’s trading activities played a starring role in the near collapse of the global markets." - Janet Tavakoli

Following on previous posts by Janet Tavakoli and Dylan Ratigan, which both reference the need to uncover how and why it is that AIG counterparties received such generous taxpayer funded bailout terms, it is critical to present the letter penned by California Congressman Darrell Issa to New York Fed President Bill Dudley, demanding much more information on the Fed's decision regarding AIG. Issa's quote that "behind closed doors and with no approval from Congress, the FRBNY may have added an additional $13 billion of debt on the backs of taxpayers. These allegations, if true, amount to nothing less than a backdoor bailout of AIG’s creditors, including Goldman Sachs, Merrill Lynch, Société Générale and Deutsche Bank" leaves many open questions as to the true motives of the NY Fed and the Federal Reserve system overall.

Fellow Zerohedge contributor George Washington parrots the lovely Janet Tavakoli and states his (her?) ire that the "Evil Vampire Squids" at Goldman SHOULD NOT have been paid at Par for their CDS trades with AIG.

I, for one, don't necessarily agree.

Janet Tavakoli with some more great quotes ...