The Real Winners From The AIG Bailout - GoFuckYourself.com

kenny · 03-08-2009, 01:42 AM

The federal reserve refused to give congress the list of AIG counterparties.

http://www.nytimes.com/2009/03/06/bu...insure.html?hp

Now that information seems to have leaked. What do you guys think?

Quote:

Right from the start we've been told that AIG had to be bailed out to stem the systemic risk that would be created by its failure. Supposedly, if AIG went down it would set off a domino like reaction through the financial system.

Strangely, however, the public has never been able to learn who the beneficiaries of the government's bailout of AIG. The company claims the information is private, and so far the government has been going along with that line. But this morning the Wall Street Journal has heroically identified dozens of US and foreign financial insitutions that have been paid $50 billion through the bailout of AIG.

Two of the biggest winners were Goldman Sachs and Deutsche Bank, who each received upwards of $6 billion from AIG after it was bailed out. Here is the list.

Goldman Sachs
Deutsche Bank
Merrill Lynch
Société Générale
Calyon
Barclays
Rabobank
Danske
HSBC
Royal Bank of Scotland
Banco Santander
Morgan Stanley
Wachovia
Bank of America
Lloyds Banking Group

http://www.businessinsider.com/the-r...bailout-2009-3

In response to my other thread entitled "AIG Counterparties"

http://www.gfy.com/showthread.php?t=...counterparties

Splum · 03-08-2009, 01:54 AM

Quote:

Originally Posted by kenny

The federal reserve refused to give congress the list of AIG counterparties.
http://www.nytimes.com/2009/03/06/bu...insure.html?hp

The secrecy of this administration is shocking considering they have run on a platform of "transparency".

Paul Markham · 03-08-2009, 02:32 AM

Are you saying the companies responsible fro getting us into this mess should not get bailed out for fucking up?

Crazy thinking.

I wonder if in 10 years people will not be thinking that it would of been better to have let some of these banks suffer for the mistakes. Is the cure worse than the disease?

teomaxxx · 03-08-2009, 03:01 AM

Quote:

Originally Posted by kenny

The federal reserve refused to give congress the list of AIG counterparties.

http://www.nytimes.com/2009/03/06/bu...insure.html?hp

Now that information seems to have leaked. What do you guys think?

In response to my other thread entitled "AIG Counterparties"

http://www.gfy.com/showthread.php?t=...counterparties

yes, the biggest reason for them is not to save AIG, but their counterparties (banks)- thats where all that bailout money go - into blackhole, which is bankrupted anyway.
all these blackholes didnt forgot to give themselves huge bonuses for their looses in 08

the quote from roubini article i posted here:

Quote:

Originally Posted by teomaxxx

Ditto for AIG (nyse: AIG - news - people ), which lost $62 billion in the fourth quarter and $99 billion in all of 2008 and is already 80% government-owned. With such staggering losses, it should be formally 100% government-owned. And now the Fed and Treasury commitments of public resources to the bailout of the shareholders and creditors of AIG have gone from $80 billion to $162 billion.

Given that common shareholders of AIG are already effectively wiped out (the stock has become a penny stock), the bailout of AIG is a bailout of the creditors of AIG that would now be insolvent without such a bailout. AIG sold over $500 billion of toxic credit default swap protection, and the counter-parties of this toxic insurance are major U.S. broker-dealers and banks.

News and banks analysts' reports suggested that Goldman Sachs (nyse: GS - news - people ) got about $25 billion of the government bailout of AIG and that Merrill Lynch was the second largest benefactor of the government largesse. These are educated guesses, as the government is hiding the counter-party benefactors of the AIG bailout. (Maybe Bloomberg should sue the Fed and Treasury again to have them disclose this information.)

But some things are known: Goldman's Lloyd Blankfein was the only CEO of a Wall Street firm who was present at the New York Fed meeting when the AIG bailout was discussed. So let us not kid each other: The $162 billion bailout of AIG is a nontransparent, opaque and shady bailout of the AIG counter-parties: Goldman Sachs, Merrill Lynch and other domestic and foreign financial institutions.

So for the Treasury to hide behind the "systemic risk" excuse to fork out another $30 billion to AIG is a polite way to say that without such a bailout (and another half-dozen government bailout programs such as TAF, TSLF, PDCF, TARP, TALF and a program that allowed $170 billion of additional debt borrowing by banks and other broker-dealers, with a full government guarantee), Goldman Sachs and every other broker-dealer and major U.S. bank would already be fully insolvent today.

And even with the $2 trillion of government support, most of these financial institutions are insolvent, as delinquency and charge-off rates are now rising at a rate--given the macro outlook--that means expected credit losses for U.S. financial firms will peak at $3.6 trillion. So, in simple words, the U.S. financial system is effectively insolvent.

Nouriel Roubini, a professor at the Stern Business School at New York University and chairman of Roubini Global Economics, is a weekly columnist for Forbes.com.

http://www.forbes.com/2009/03/04/glo...y.html?partner

https://gfy.com/fucking-around-and-business-discussion/892162-roubini-ready-global-shaped-depression.html

you wonder why only GS head was there? then just look who runned the US treasury at that time, Paulson former ex-GS guy head. no surprise they are rumored to be a biggest recipent of AIG bailout.

CDS are the biggest threat for entire banking system, yet its not still addressed, even after two years of crises. the crooks running the show still think that US taxpayer can pay the looses from them. they will be badly surprised sometimes in the future.

quote from biggy

Quote:

Originally Posted by Biggy

I bet Goldman has some exposure, my personal thoughts are they may have a lot. A friend of mine worked as a trader at GS from 2005-2007 or so, right out of college - it was a dream job. He traded Credit-Default Swaps and they were acting as a market maker. He told me at the time it was the most profitable part of the bank, of all of GS in the boom times. It was a dream job because it was at the best bank, in the most profitable part of the best bank. The people there got P.A.I.D.

When all this shit hit, GS had surprisingly low exposure to all this BS (subprime, housing, etc), yet was raking in all the profit in the boom times and was considered the best bank. It doesn't add up and wouldn't surprise me at all if they were holding a ton of CDSes and receiving a portion of that bailout money. It also would go along with why they would want it hidden, because the last thing they would want is more risk/uncertainty around major financial institutions.

That article is good because theyre right, something doesnt add up. In my opinion, if TARP banks are involved, they should be named. For private parties, I agree, not right to disclose them, but fuck it, if theyre already getting gov't money on a different front, it should be duly noted they are also on the receiving end of this :2cents.

$5 submissions · 03-08-2009, 03:08 AM

No Wonder Goldman Sachs CEO was all combative and Mr. Tough Guy during the last hearings. Paulson was spoonfeeding the fuckers. Fuck bailouts. Let the market work.

All this bullshit "management" of the crisis is creating bigger problems down the road. Next stop: hyperinflation and 'veiled' trade wars.

$5 submissions · 03-08-2009, 03:09 AM

It's amazing the amount CDS still in play..... Are we past $3 trillion yet (in potential exposure)?

Shaze · 03-08-2009, 03:32 AM

if you look at that list you'll realize that the American taxpayer and government is now throwing away money to non-US financial institutions. basically if AIG didn't receive the bailout money it would have went bankrupt and wouldn't have been able to pay out the CDS insurance the international banks bought from AIG, and the US would lose face in the financial world. anyway, all this at the cost of the US taxpayer and the people of the US. we are using government/taxpayer money which should be staying in the US at a time when our economy is hurting and giving it to international institutions now. i have a feeling this is one reason they want to keep it secret. they don't want the US public to see that the actual bailout money going into AIG is leaving the US at a time when we need it most to non-US financial institutions.

another thing i see ironic about this whole mess is while the government is at a time taking away our privacy rights, they are saying these institutions who are receiving our money deserve privacy. OK USA!!!!

$5 submissions · 03-08-2009, 03:37 AM

Quote:

Originally Posted by Shaze

if you look at that list you'll realize that the American taxpayer and government is now throwing away money to non-US financial institutions.

Good point. On a related note, notice that many of the bailed out financial institutions outsource quite a bit of their backoffice operations to non-US companies. Will there be a looming "service trade war" if the bailed out companies are called out for taking US taxpayer money but "exporting US jobs overseas"?

kenny · 03-08-2009, 03:56 AM

Those banks are either foreign or are US bailout banks. All are making profits off of CDS bets.

Tax payers are shipping money offshore and paying off insurance claims using AIG as a proxy.

This is the biggest robbery in World History and they are doing it in broad daylight.

Shaze · 03-08-2009, 03:59 AM

Quote:

Originally Posted by kenny

Those banks are either foreign or are US bailout banks. All are making profits off of CDS bets.

Tax payers are shipping money offshore and paying off insurance claims using AIG as a proxy.

This is the biggest robbery in World History and they are doing it in broad daylight.

LOL..exactly what i think. those list of banks are actually the smart ones. like they say there is always money being made by someone even in a recession. AIG is just like one big front to conceal who the robbers are. in actuality though, you can't blame those institutions because they actually did what was best for their business and it was all legal and within the regulations created. it was the government regulations which was broken and allowed this to happen, and of course the creation of CDS. CDS was a step forward in intertwining the world into an even more global economy, but i guess some aspects of a global economy are bad. if one nation goes bust it affects every other nation in the world. again, GO USA!!!! for hiding this from the people that our government is suppose to be serving and whose money they are actually using to make the payoffs.

kenny · 03-08-2009, 04:10 AM

Quote:

Originally Posted by Shaze

LOL..exactly what i think. those list of banks are actually the smart ones. like they say there is always money being made by someone even in a recession. AIG is just like one big front to conceal who the robbers are. again, GO USA!!!! for hiding this from the people that our government is suppose to be serving and whose money they are actually using to make the payoffs.

They created a bunch of contracts guaranteeing insurance on securities.

They never had means to pay this insurance. The CDS contracts are nothing more than a loophole designed to bypass insurance regulations set to prevent this behavior.

Another huge problem is Naked CDS where the firm insuring the security doesn't even own the underlying security. Its just making bets with moral hazard written all over it. These guys could of deliberately fucked up the economy, lets face it the motive is there.

There not tricking us. All the have to do is void all the Credit Default Swaps. What will they lose? The premiums paid to AIG?

Shaze · 03-08-2009, 05:00 AM

I'm not to sure what point your trying to make in your reply, but i'll take a stab at it. I also think you might be confused on who was selling the CDS "insurance" from your post. AIG was selling CDS to banks who owned mortgage backed securities and other type debt related vehicles like bonds so if those debts defaulted the banks wouldn't lose their entire investments because AIG would have to pay up to the banks. When the house market turned for the worse the mortgage backed securities owned by the banks defaulted and AIG had to pay them what was agreed upon in the CDS agreements, so in essence the US government is giving AIG bailout money to be directly given to these banks (which many are non-US institutions from the list provided in the post. In essence our taxpayer money is leaving the US and not helping us in anyway:

Quote:

Originally Posted by kenny

They created a bunch of contracts guaranteeing insurance on securities.

If by "they" you mean AIG then yes.

They never had means to pay this insurance. The CDS contracts are nothing more than a loophole designed to bypass insurance regulations set to prevent this behavior.

Yes, AIG never did have the capital to pay out the CDS insurance on the defaulted debt (I'm assuming most of this debt was from mortgage backed securities which went belly up when the housing market went bust and homeowners couldn't pay the higher ARM rates, or the price on their houses went below the purchase price, etc... and foreclosures increased)

Another huge problem is Naked CDS where the firm insuring the security doesn't even own the underlying security. Its just making bets with moral hazard written all over it. These guys could of deliberately fucked up the economy, lets face it the motive is there.

There not tricking us.
I'm assuming you mean the government when you say "their" in this one. Anyway, I never said anyone was tricking us. I just said the government is covering up whose hands the money is actually ending up in which is being funneled through AIG. By paying out the bailout money to AIG it looks like the taxpayer money is going into a US financial institution, where in actuality it is going to some non-US financial institutions.

All they have to do is void all the Credit Default Swaps.
who is "they"? If you mean AIG, the only way to not pay out the CDS insurance owed to banks is if they go bankrupt.

What will they lose?
By "they" if you mean AIG - they will go bankrupt. But if they are kept alive by the government through bailouts they are legally require to pay the CDS payouts which were bought by the banks/financial institutions

The premiums paid to AIG?
If they (the banks) don't get paid the promised amount by AIG from the CDS insurance they bought from AIG the banks were basically buying CDS insurance and paying premiums to AIG for no reason. If AIG doesn't pay out the amount promised in the CDS insurance the banks will lose all their investment in the debt that defaulted (mortgage backed securities when relating to our conversation).

kenny · 03-08-2009, 05:33 AM

We agree mostly, but I still say they should void the CDS contracts and when I say "they" I mean the government not AIG.

All other references to the wold "they" is pertaining to whoever was involved.

I am not confused. AIG was insuring securities in the form of CDS and they (AIG) did this to bypass insurance regulations. Under insurance regulation they would have to had the means to pay.

And the firms insuring these securities through AIG didn't have to own the underlying security, again thanks to the regulation loopholes created by CDS. Making bets - moral hazard.

For example if everyone in your neighborhood was allowed to take out an insurance policy on your home than alot of people would have alot to gain if your house brunt down. - Moral Hazard.

This makes me wonder exactly what securities these firms are collecting the insurance from and if those firms had any prior transactions underminding those securities.

Quote:

Declare all CDS contracts, worldwide, as null and void. There is precedence for this:

During the Great Depression, many debt contracts were indexed to gold. So when the dollar convertibility into gold was suspended, the value of that debt soared, threatening the survival of many institutions. The Roosevelt Administration declared the clause invalid, de facto forcing debt forgiveness. Furthermore, the Supreme Court maintained this decision.

http://www.moonofalabama.org/2008/09...on-declar.html

DarkJedi · 03-08-2009, 05:49 AM

congrats to the winners

03-08-2009, 02:32 AM	#3
Paul Markham Too old to care Industry Role: Join Date: Jun 2001 Location: On the sofa, watching TV or doing my jigsaws. Posts: 52,943	Are you saying the companies responsible fro getting us into this mess should not get bailed out for fucking up? Crazy thinking. I wonder if in 10 years people will not be thinking that it would of been better to have let some of these banks suffer for the mistakes. Is the cure worse than the disease? __________________ Blowout deal. 880 videos, 2,400 image sets, plus many RAW videos. $500. PM me for a deal. Skype Paulmarkham70

03-08-2009, 03:08 AM	#5
$5 submissions I help you SUCCEED Industry Role: Join Date: Nov 2003 Location: The Pearl of the Orient Seas Posts: 32,195	No Wonder Goldman Sachs CEO was all combative and Mr. Tough Guy during the last hearings. Paulson was spoonfeeding the fuckers. Fuck bailouts. Let the market work. All this bullshit "management" of the crisis is creating bigger problems down the road. Next stop: hyperinflation and 'veiled' trade wars. __________________ Need a NON-ADULT income stream? We build your YOUTUBE CHANNEL for only $20 per video! For Hire: $3/hour or $400 per month Marketing Specialist Virtual Assistants

03-08-2009, 03:09 AM	#6
$5 submissions I help you SUCCEED Industry Role: Join Date: Nov 2003 Location: The Pearl of the Orient Seas Posts: 32,195	It's amazing the amount CDS still in play..... Are we past $3 trillion yet (in potential exposure)? __________________ Need a NON-ADULT income stream? We build your YOUTUBE CHANNEL for only $20 per video! For Hire: $3/hour or $400 per month Marketing Specialist Virtual Assistants

03-08-2009, 03:56 AM	#9
kenny Confirmed User Industry Role: Join Date: Mar 2002 Posts: 7,245	Those banks are either foreign or are US bailout banks. All are making profits off of CDS bets. Tax payers are shipping money offshore and paying off insurance claims using AIG as a proxy. This is the biggest robbery in World History and they are doing it in broad daylight. __________________ 7

03-08-2009, 03:32 AM	#7
Shaze Confirmed User Join Date: Oct 2003 Location: Cyberspace Posts: 2,662	if you look at that list you'll realize that the American taxpayer and government is now throwing away money to non-US financial institutions. basically if AIG didn't receive the bailout money it would have went bankrupt and wouldn't have been able to pay out the CDS insurance the international banks bought from AIG, and the US would lose face in the financial world. anyway, all this at the cost of the US taxpayer and the people of the US. we are using government/taxpayer money which should be staying in the US at a time when our economy is hurting and giving it to international institutions now. i have a feeling this is one reason they want to keep it secret. they don't want the US public to see that the actual bailout money going into AIG is leaving the US at a time when we need it most to non-US financial institutions. another thing i see ironic about this whole mess is while the government is at a time taking away our privacy rights, they are saying these institutions who are receiving our money deserve privacy. OK USA!!!!

03-08-2009, 05:49 AM	#14
DarkJedi No Refunds Issued. Industry Role: Join Date: Feb 2001 Location: GFY Posts: 28,300	congrats to the winners