Revisiting a Fed Waltz With A.I.G.
We have covered quite a bit of AIG news on BobandScott.com since the bailout (AIG story history). Frankly, I am still stunned at the levels that AIG trades at. The is a public entity with negative book value and a giant mountain of debt to pay down.
In July, there was a growing speculation, that AIG was essentially used as a vehicle to pay down other entities with rather strong ties to the decision makers.
http://www.bobandscott.com/market-news/was-the-aig-bailout-a-goldman-bailout-by-proxy/
As more of the facts come to light, it becomes clear that the AIG bailout was paying out at levels that were unnecessary. The payouts were to people rather close to the Fed and those in power.
On the question of whether this payout was what the report describes as a “backdoor bailout” of A.I.G.’s counterparties, Mr. Barofsky concluded: “The very design of the federal assistance to A.I.G. was that tens of billions of dollars of government money was funneled inexorably and directly to A.I.G.’s counterparties.” The report noted that this was money the banks might not otherwise have received had A.I.G. gone belly-up.
via Fair Game – Revisiting a Fed Waltz With A.I.G. – NYTimes.com.
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